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70 Don’t Make Me Say I Told You So

vary over time. The following chart shows the returns on
different types of bonds over the past three decades.

Bond Market Performance
1986 - 2019

$20 Compound annual return
High Yield Corporate Bonds 8.4% $15.54
Corporate Bonds 8.4 $15.39
Government Bonds 8.2 $14.42
Municipal Bonds 7.1
Treasury bills 3.2 $10.33
8

$2.88

1

1986 1991 1996 2001 2006 2011 2016
Source: Morningstar, 2020

Bonds also can be called bills, notes, debt securities, or debt
obligations. To simplify matters, we will refer to all of these as

“bonds.” Here are some of the reasons that people invest in
bonds:

Diversification – Bonds are typically less volatile than stocks

and may stabilize the value of your portfolio when the stock
market drops. Diversifying your portfolio between stocks and

Chapter 3: You Must Have Growth In Your Portfolio