For your consideration ...
What is there purpose im 60/40 while retired its doing good but I just dont understand the bonds do they make big money? While working I was putting 23% of my check going to my money company at 100% stock made me big money they suggested a 50/50 mix when I retired and I told them 60/40 Im thinking of 80/20 but I dont understand the bond part/I know I risk losing more money at that rate but I will make more money at that rate?
Bonds are another name for loans given to governments. Repayment of which is backed up by outrageous taxation and property taxes; and rarely default. Then there are corporate bonds; which can default. Repayment of which is business revenue based, which can then turn into junk bond status when the business isn't bringing in what was expected. But with the higher risk of default, comes a higher premium in the form of a much higher interest rate charged.
Government/municipal bonds also have tax advantages where in some states the interest income is not taxed.
