The third pillar of my portfolio: Why a long-term bond ETF will soon be part of it

The third pillar of my portfolio: Why a long-term bond ETF will soon be part of it

According to a report by www.aktienwelt360.de,

The article describes an investor's consideration of investing in a bond ETF in addition to stocks and cash. The investor bases this idea on the assumption that interest rates are gradually approaching a possible high and may stagnate or even decline in the near future. He believes investors could be sufficiently rewarded for holding a bond ETF with good credit ratings and plans to put about five percent of his portfolio into this investment.

From an economic perspective, the investor's decision to invest in a bond ETF can have various implications. This type of investment could reduce risk in the portfolio since bonds are often viewed as less volatile than stocks. This could stabilize the overall portfolio performance. Bonds could also provide a regular source of income because they often pay interest.

However, it should be noted that bonds also have their own risks, such as interest rate risk, which could be relevant in the event of a possible future interest rate cut. Selecting the bond ETF and diversification within the ETF are also important factors to consider.

Overall, the investor's decision to invest in bonds could lead to further diversification of his portfolio and offer him the opportunity to benefit from potential developments in the bond market. However, it remains to be seen how interest rates and the bond markets will develop in the future.