News

Law

Asset Management

Investment Banking

Wealth

Hedge Funds

People

Newsletters

Events

Lists

View

Do not be fooled, bonds are riskier than you think

Relying on long-term government bonds to manage risk at today’s prices looks imprudent — at best

Do not be fooled, bonds are riskier than you think
Photo: Fotoatelier Berlin / Image Broker / Getty Images

Bonds have been an exceptionally rewarding asset class for nearly four decades.

They have also proven to be a reliable diversification tool — particularly when deployed with stocks in a portfolio. But expecting a repeat performance in the decades to come reminds us of the late financial historian Peter L. Bernstein’s comment that “there is a difference between an optimist and a believer in the tooth fairy”.

WSJ Logo