It would be nice if there was an investment that could offer retirees growth potential, principal protection and complete liquidity. However, it doesn’t exist. There’s no such thing as a perfect investment, product or strategy. Nothing does everything well.
Traditionally, many investors have allocated a portion of their portfolio to bond funds in an effort to lower their overall risk while maintaining liquidity. The problem is bonds and bond funds are different. Bonds are guaranteed by and only as good as the entity that backs them, while bond funds are actively traded funds focused on the bond market bonds and can lose principal.
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