Cash & Bonds Do Australian Investors Need International Bonds?

Discussion in 'Other Asset Classes' started by Nodrog, 28th Feb, 2019.

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  1. Nodrog

    Nodrog Well-Known Member

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    I suppose the risk free side of our portfolio is exactly that or as close as I can get. So safe, low return but no nasty surprises (even Bond correlation is not guaranteed). Adding risk to chase higher returns is reserved solely for our allocation to equities.

    Bit old fashioned and simple minded no doubt in that I like to keep a clear division between Risk vs Risk Free. I’ve never felt comfortable with anything in the middle trying to be a bit of both whether through the product itself or “active” management both of which can introduce unexpected nasty surprises. Hence can no longer be considered Risk Free!

    As mentioned in the past we’re very fortunate in that our equity portfolio already provides beyond what’s needed to fund lifestyle. So there’s never the urge to take unnecessary risk with the defensive side of the portfolio. So I suppose Cash is still King for our defensive allocation given the stage of both our investing lifecycle and market cycle. In both cases at this current time whether right or wrong the Optionality of Cash is worth more to us given our circumstances than its lowly returns!
     
  2. The Falcon

    The Falcon Well-Known Member

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    Sure, I wouldnt use either. In some circumstances might have a value.
     
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  3. Nodrog

    Nodrog Well-Known Member

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    It certainly does for PIMCO fee revenue:D.

    Cash & TDs have no fees and come with a sort of Gov’t guarantee:cool:.
     
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