How to Use Taxable Bonds in a Portfolio

And make sure you protect them from the ravages of inflation while you're at it. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=47376&elqTrackId=0b491dc88cf545e28794be564a9a64c3&elq=7439ef549ea340caa5b2a2f4fb5616c4&elqaid=47376&elqat=1&elqCampaignId=23369) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] "Terribly useful." That's the phrase that crossed my mind as I digested [Amy Arnott's recent discussion of all you need to know about taxable bonds]( their historical risk/reward profile, their performance during rising-rate environments, the recommended holding period for various types of bond funds, and the best funds across Morningstar Categories. It's part of Amy's [Portfolio Basics series]( but it's not just for newbies; my bet is that even seasoned bond investors will learn a thing or two from reading it. I talked about [the role of bonds for retirees in a webinar earlier this year](. It's true that many retirees gravitate to all-equity portfolios because they're battle-tested: They've lived through big stock-market swoons and know that equities not only recover but usually go on to gain ground from there. And bonds didn't make an especially compelling case for themselves in 2022 as rising interest rates crimped bond prices. But [the 2022 retirement income research]( that John Rekenthaler, Jeff Ptak, and I worked on pointed to the value of balance for in-retirement portfolios, not swinging for the fences. Of course, inflation is the natural enemy of anything with a fixed payout attached to it, which is why I'd argue that investors shouldn't go overboard with bonds or cash, even when taking into account the decent yields on offer today. John Rekenthaler delved into the difficulty of predicting inflation in [this article]( and [in this one]( I discussed how retirees can inflation-protect their portfolios. Finally, if you're interested in how a topnotch value-minded stock-picker sees the market today, check out [the conversation that Jeff Ptak and I recently had with Bill Nygren]( longtime manager of the Oakmark and Oakmark Select funds. Bill has long been one of our analysts' favorite managers, and Oakmark Select has had a home in Morningstar's 401(k) plan—and in my portfolio—for many years. As always, I appreciated his perspective on the market and the state of value investing. With warm regards, Christine Benz [How to Use Taxable Bonds in a Portfolio]( This edition of our Portfolio Basics series covers the value of taxable bonds in reducing risk and generating income. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [How to Protect Your Retirement Assets from Inflation]( Why inflation can be a big deal in retirement—especially for new retirees. [Watch Now]( [How Do I Use Large-Cap Stocks in a Portfolio?]( A look at the benefits and risks of these investments, plus our favorite options. [Read More]( [Backdoor Roth IRA? Avoid These 5 Mistakes]( These errors can jack up tax—and opportunity—costs. [Read More]( [Bill Nygren: The State of Value Investing Today]( The Oakmark fund manager on the limits of macro, why financials look cheap, indexing’s pitfalls, and more. [Listen Now]( [Why Retirees Need a Balanced Portfolio]( The right retirement asset allocation can help enlarge your lifetime withdrawals. [Watch Now]( [How Inflation Befuddled Everyone]( Economic predictions would be greatly useful—if they were consistently correct. [Read More]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602