There are ways in which you can legally go over the 30 percent limit, such as investing the remaining 70 percent of your domestic content in funds that invest a percentage of their assets overseas, for example. Although the thought of a six percent return on your investment isn't very sexy, bonds should play a part in every well-diversified portfolio. Bonds are great investment vehicles when you need security and predictability from your investments. And if you're like most Canadian investors, a little predictability is just what the doctor ordered after last year's stock market roller-coaster ride. In fact, bonds tend to perform well when stocks fluctuate for the worst.
Bonds can also appreciate in value.
When interest rates decline, the value of a bond increases. Similarly, when interest rates are on the rise, a bond loses value. So with rates currently on their way down, this year is an excellent time to add bonds to your investment mix. If you don't have any bonds in your portfolio, wait no more. The recent stock market downturn and declining interest rates make bonds more attractive than you might think.