The great corporate-bond bull market continues unabated with the Dow Jones Corporate Bond Average up 46 percent since 2008. The iShares iBoxx Investment Grade Corp. Bond (LQD) ETF is up 4.5% year-to-date. The below-investment grade has stayed above water, with the SPDR Barclays Capital High Yield Bond (JNK) ETF and iShares iBoxx High Yield Corporate Bond (HYG) up 2.8% and 3.5%, respectively.
If you have decided that the stock market is too volatile and that you want to switch to the historical safety of bonds, you are not alone. The baby boomers are retiring and need investment income, and bonds can provide more certainty of overall investment return during soft economic times.
So, how should you proceed?
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