Diversifying between stocks and bonds
Author
Edward Jones - Chad Choate, AAMS
Posted on
Apr 23, 2021
Book/Edition
Florida - Sarasota, Bradenton & Charlotte Counties
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Bonds can help provide balance
The key to riding out market fluctuations lies in owning a balanced mix of quality investments. Although studies show that stocks have historically provided better long-term returns, its your asset allocation the overall mix of stocks, bonds and cash that ultimately can determine how well
your portfolio performs.
Bonds can provide a steady stream of fixed-income payments that can help you weather stormy markets. Bond prices and interest rates may change, but you can expect to receive regular interest payments and the bonds original principal value at maturity, provided the bond doesn't default. Even if you don't need the income, bonds can help reduce risk through better price stability if you hold them until maturity. If a bond is sold prior to maturity, however, it may lose principal value.
Through good times and bad
Stock and bond prices generally don't move in tandem. In other words, when stock prices decline, bond prices may rise, and vice versa. This relation-ship helps a well-balanced mix of investments potentially achieve more stable returns. So if you own bonds when the stock market drops, they
may help reduce your losses.
The chart below shows that since 1975, bonds have provided positive returns during the eight years when stocks declined. Of course, past performance is not a guarantee of future results, but during those eight years, stock returns fell by an average of 12.5% while bond returns rose by an average of 6.7% a difference of 19.2%.
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Edward Jones - Chad Choate, AAMS
Financial Advisor 828 3rd Ave. W., Bradenton, Florida, 34205
Experience and Background I am a financial advisor in Bradenton, FL, and began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.
