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Join us for an insightful episode on the role of bonds in retirement investing. Welcome to another episode of our podcast! Today's focus is on unraveling the world of bonds – their mechanics, diverse types, the choice between bond funds and individual bonds, and which bonds are best suited for retirees.

Segment 1: Unpacking Bonds and Their Types
Think of bonds as loans you provide to companies or governments. They borrow money from you and promise to pay interest over a specific time frame. When you invest in a bond, you're essentially the lender. You hand them money, and they assure you a return of your original investment ('principal') and regular interest payments.

Bonds are issued at a Par Value, usually $1,000. The bond's market price can vary during its lifespan based on interest rates and issuer credibility. Upon maturity, you receive your original investment plus earned interest. Bonds offer stability in the short term compared to volatile stocks, but historical data suggests that, over the long run, US bonds don't perform as well as stocks.

Segment 2: Bond Funds and ETFs – Which Route to Take?
When diving into bond investing, you're faced with choices: Bond funds, Bond ETFs, or individual bonds. Each option has its pros and cons. Bond funds pool your money with other investors to diversify your bond portfolio, though fees can vary. Individual bonds assure your principal upon maturity but require more effort to purchase and research.

Market stress might cause bond fund managers to sell at a loss, impacting shareholders. Similarly, Bond ETFs could temporarily sell below their Net Asset Value during market turmoil. Your choice depends on your preferences, risk tolerance, and goals. Bond funds can offer broader exposure, while individual bonds provide security.

Segment 3: Tailoring Bonds to Your Retirement Strategy
Choosing the right bonds or bond funds for retirees hinges on your objectives and circumstances. For those with a significant stock component, government bonds can provide diversification and reduce volatility. Dr. Pfau's study suggests intermediate government bonds as a replacement for corporate bonds in the 4% rule.

If you're ultra-conservative with mostly bond assets, a mix of bond types might be

Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.

Thank you for tuning in to this episode of The Retirement Guide. If you enjoyed this episode, please subscribe & leave a review. If you'd like a free 30-minute retirement review, visit our website at www.capitalwealthplan.com to schedule.
This is for education only.It is not tax, legal, or investment advice. Before acting on any information consult your tax, legal, or investment advisor.

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