Ep. 2000: Bonds Are Doing Their Job

Bond prices are falling as yields rise—and that does not mean diversification has failed. Don and Tom explain why high-quality bonds can decline when stocks and the economy are strong, why that behavior is normal, and why chasing high-yield or “alternative” bond funds can quietly turn the conservative side of a portfolio into more stock-market risk.They also answer questions about Roth conversions after required minimum distributions have begun, whether conversion taxes should ever come from retirement assets, and whether buying an annuity for a child makes sense compared with a Roth IRA or 529 plan.00:00 Nashville-style intro02:16 Why bond prices are falling04:02 Comparing BND, municipal, Treasury, and high-yield funds05:40 What a balanced portfolio is supposed to do07:17 The hidden risk in “better-performing” bond funds11:47 Stocks for growth, bonds for cushion14:19 Roth conversions after RMDs begin22:28 Listener questions24:16 Paying Roth-conversion taxes26:46 An annuity for a child?31:46 Wrap-up32:37 DisclosuresQuestions? Comments? Click the microphone at TalkingRealMoney.com.

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