Is it time to search for bond alternatives for your balanced portfolio? Oct 18th

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I was recently warned by someone in the financial sector that it’s not a great time to invest in bond ETFs. My current asset allocation is 60% equities and 40% bonds, so I’m wondering what alternatives would you suggest for that 40% portion of my balanced portfolio?

At first I considered real estate income trust (REIT) ETFs, but read they should be considered equity investments. Then I thought about mortgage-backed security (MBS) ETFs. but there seems to be only one in Canada (ZMBS) and its performance doesn’t seem all that impressive.

I’m kind of at a standstill as I decide how to invest that 40%. Thanks for any advice you can share.

—Fred

I’d love to know why you were advised against investing in bonds right now, Fred. If I had to guess, I suspect you were told one or both of the following:

Interest rates are so low that you’re not going to make any money on bonds, especially after inflation is taken into account;Interest rates are going to rise and, when they do, bonds will drop in value…

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