Recommend this page to a friend. Our panel of experts answers your mutual fund questions. So far, though, investors have not chosen en masse to shift money into bonds - traditionally considered a stable, if considerably less rewarding, investment alternative to corporate stocks. Investors were likely climbing on the fast-moving equity train.
Bonds are a good hedge for investors.
Rising stock prices may have pushed the equity portion of an investor's portfolio up to 90 percent. But he or she may prefer a more cautious 60 percent, with 40 percent in fixed-income investments. It may be time, he adds, to take notice of some high-yield bonds. A good quality corporate bond is yielding nearly 8 percent. With inflation running at 3 to 3.2 percent, that means an after-inflation return of about 5 percent.