It’s no joke: High-quality bonds deserve respect

The late comedian Rodney Dangerfield used to joke about getting no respect. Fran Kinniry, a principal in Vanguard’s Investment Strategy Group, wonders whether traditional bonds sometimes suffer the same fate.

Fran Kinniry”For a number of years, I’ve talked to investors and financial advisors about portfolio construction and how to increase diversification,” Mr. Kinniry said. “Whether it’s real estate investment trusts, commodities, hedge funds—you name it, I’ve been asked about them. But I always wonder why bonds are so often overlooked.”

Bond prices have generally risen and yields have fallen over the past 30 years, so returns in the future are projected to be less generous. But this doesn’t fundamentally change the valuable role bonds play in a diversified portfolio.


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