Dave Explains Why He Doesn't Recommend Bonds



Check out The Rachel Cruze YouTube Channel for life and money tips! http://www.youtube.com/user/RachelCruze?sub_confirmation=1 ________________________________________________________________ Dave explains why bonds aren't the best investment. Find A Financial Peace class near you! http://www.daveramsey.com/fpu/classfinder?ectid=70.11.1146 Check out Chris Hogan’s book “Retire Inspired” http://www.daveramsey.com/store/books/retire-inspired-by-chris-hogan/prodD078.html?ectid=70.11.1145 Do you want to take control of your money? Get “The Total Money Makeover” book here. http://www.daveramsey.com/store/books/dave-s-bestsellers/the-total-money-makeover/prodtmmoclassic.html?ectid=70.11.1144 Download the FREE EveryDollar App and start telling your money where to go. http://www.daveramsey.com/everydollar?ectid=70.11.1143 Do you need help with your taxes? Find an Endorsed Local Provider near you! https://www.daveramsey.com/elp/tax-services?ectid=70.11.1142 Need help selling or buying a home? Click the link to find an Endorsed Local Provider in your area. https://www.daveramsey.com/elp/residential-real-estate?ectid=70.11.1141 Do you have questions about investing? Let one of our Endorsed Local Providers help. https://www.daveramsey.com/elp/investing?ectid=70.11.1140 IN THIS VIDEO: Dave Ramsey, The Dave Ramsey Show, Financial Peace University, FPU, The Total Money Makeover, budget, envelope system, emergency fund, baby steps, radio show, debt freedom, EntreLeadership, mortgage, ELP, daveramsey.com, money, finance, economy, investing, saving, retirement, cash, mutual fund, stock market, business, leadership, credit, drtlgi

Comments

  1. This is ridiculous advice - the 10 year history of the Vanguard Total Stock Market ETF (VTI) and Total Bond Market ETF (BND) are substantially different. Look for yourself: https://personal.vanguard.com/us/faces/JSP/Funds/Compare/CompareEntryContent.jsp
  2. volatility is not risk.
  3. This year, I requested most of my federal tax refund as Series I-Bonds. Series I-Bonds are inflation-proof.
  4. For those who want to know why he is wrong, read the bogleheads response on this video:
    https://www.bogleheads.org/forum/viewtopic.php?t=136186
  5. I use bonds for idle cash in my warchest so when a big recession hits then I got bonds increasing in value to buy bargains.
  6. The problem with this is, people aren't immortal. They invest in a relatively short time frame even if it's 40-50 years. While equity should theoretically outperform debt over time, there will be a lot of years when equity tanks. You have to compensate for that somehow.

    I guess for Dave this makes sense as he has a lot of assets which aren't stocks, but for the normal person whose entire portfolio is in a 401k I don't think this advice holds.

    Also, if the bond market tanks, just hold it until maturity. It's not hard.
  7. I think Dave is completely wrong on gold ans silver, but I agree on bonds completely. I wouldn't touch bonds with a 100 ft pole. Plus, we're in a multi-decade bond bubble which Dave alluded to.
  8. In what situation would Dave think Bonds are a good investment? would interest rates need to be higher? After all why do large institutions invest in bonds?
  9. The key is to hold it to maturity.
  10. Looking at a market over 50-60 years is a false read. We have huuuuuge swings in very short cycles these days. This line of thinking that investment advisers put forth is misleading. You don't have 50 years to experience the long term curve if you are even 30 years old! You have 35 years. You can lose 20-30% of your portfolio in a week in this economy. How long does it take to win that back!!! It might take 3 years to just get back your loss!!!
  11. Dave will look really smart when the bond bubble bursts.
  12. Ramsey is missing an important point here. You can't consider the risks and rewards of an asset by itself. You have to evaluate it in the context of your whole portfolio. Bonds may not be great on their own, but when you pair them with equities, they tend to reduce volatility - hence the conventional wisdom about shifting to bonds over time.
  13. Balanced funds may or may not be more aggressively into stocks at this time. It depends on the fund. They don't all do the same thing at the same time. Some think it's currently worth it to be heavier into stocks. Others are more defensive and keep a higher percentage in bonds.
  14. He's being deceitful about the volatility of bonds. Intermediate term investment grade bonds ARE SUBSTANTIALLY LESS VOLATILE THAN STOCKS. Yes, it's true they don't perform as well over the long run.
  15. Does Dave live in a time warp where it is 1986? What bond pays 5% interest? Can I know so I can sell my house and buy bonds? I don't want to be in real estate but the fed and it's 0% interest for a decade policy is forcing everyone into assets. My rrsp didn't make a dime for a decade so I pulled it and bought a house. At least I get rent every month. My rrsp averaged 1% for a decade! what alternate universe is he talking about?
  16. "If you sell it."

    Uhhh.. that's the whole point of owning a bond. You don't have to sell it. If interest rates go up, you simply let it mature. Obviously 60-year-olds shouldn't be buying a lot of 30-year bonds.
  17. However, When you own a bond.. you are protected from losing all its value.. due to fact its a DEBT. when you own stock the company value could go to 0 (plenty have) and if you own a bond they have an OBLIGATION to pay them. Meaning you have a better chance of recouping your dollars back, However. I dont invest in the market any longer. I keep all my money in whole life dividend paying life insurance with paid up additions. I earn a tax free 4 percent, I can put as much money as i want in it. I can use the money now tax free, and when i pass on I know how much im leaving tax free. I am taking the irs's hand out of my life as much as I can.
  18. I demand a higher return now. Why can't I buy one?
  19. I'll take the guaranteed interest rate, thanks. When do you see banks paying more than 2%? Not for a very long time.


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Visibility: 51500

Duration: 7m 58s

Rating: 215