This question was asked by a member regarding USA Bonds and Bond ETFs. However I felt it would be of interest to Canadian investors as well, as there is a lot to like about Canadian Bonds as well as Canadian Bond ETFs. I have adjusted the article somewhat to reflect on Canadian specific material.
The same article is available focusing on USA Bonds and Bond ETFs. It can be reviewed through this link.
30% of my entire portfolio is always in and out of Bonds. Bonds can provide good returns if they are traded although many analysts believe the many years of good returns from bonds is coming to an end thanks to 6 years of interest rates at pretty well zero. I am not so sure about that. Perhaps for those who buy bonds and then simply hold them far into the future, returns may be smaller but for those who trade in bonds I believe there are still good profits but investors have to also be realistic about the amount of returns they can earn.
The Canadian Edition of this question is 2500 words in length as I look at other aspects of creating Canadian laddered bond portfolios and then delved into how I trade the XBB ETF.
Bond ETFs Versus Buying Bonds Directly – Canadian Bonds
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Bond ETFs Versus Buying Bonds Directly – USA Bonds