Your Weekly Update - The Role Of Bonds In Your Portfolio

	Weekly Market Recap The US economy appears to remain on track. At a high level, US unemployment at 5.3% is significantly down from its 10% peak in 2009 and the US has delivered a stronger performance in recent years than many developed nations. The first quarter in the US was weak due to what are believed to be transitory factors, and more recent data points to improvement. The Fed also sees Europe on a "firming footing", more-so than in recent history and, over the past week, Greece has approved measures for a new bailout. This week we want to discuss the role of bonds in your portfolio. The returns for bonds have historically been more stable than returns for stocks on a year-to-year basis. We focus your portfolio on high credit quality bonds, with a general bias to those issued by governments in developed markets. Based on our research, these bonds are generally considered less risky than bonds issued by corporations. Finally we diversify bond exposure by including TIPS which we expect to help protect your portfolio from unexpected inflation. In our view, bonds help bring balance and add stability to a portfolio. You may have noticed this in recent weeks as your bond holdings rose in value at times when concerns for the broader market grew. This is what we expect. Bonds have the potential to deliver relatively stable income over time, but given their high credit quality, can also protect your portfolio at times when stocks are weak. For example, in both the 1930s and 2000s, decades which contained multiple recessions, US government bonds outperformed US stocks. This is unusual, but can happen when growth is weak. This speaks to the value of diversified portfolio construction. Historically stocks and bonds in combination have delivered a smoother return than stocks in isolation. And with smoother returns, investors are more likely to stick with their long-term plan. Bonds can be particularly helpful to returns when stock markets are weak. We also note that some investors have concerns about holding bonds in a rising rate environment. Historical analysis suggests that bonds can perform better than expected when rates rise. In addition our fixed income portfolio is globally diversified and the US is one of few countries expected to raise rates, other nations are currently reducing rates. Our recent Forbes piece on the value of bonds is here: http://www.forbes.com/sites/simonmoore/2015/06/19/why-you-still-need-bonds-in-your-portfolio/ Disclaimer: The views expressed herein are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Past performance is not indicative of future results. The tax loss harvesting strategy discussed should not be interpreted as tax advice and it does not represent in any manner that the tax consequences detailed will be obtained or that its tax loss harvesting strategy will result in any particular tax consequence. Clients should consult with their personal tax advisors regarding the tax consequences of investing. Your Portfolio Summary $9,746.91 Your Total Assets Ways To Improve Your Portfolio 0 Accounts with Actions Your portfolio has no recommended actions right now. We'll watch over your investments and alert you with an email when there are actions for you to complete. Sign in to see detailed steps Sign in to see your full dashboard If you wish to change your email settings, visit your Settings.
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