Bonds could provide better diversification than cash in down markets
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Investors who are overallocating to cash today may miss out on the benefits of bonds when markets decline.
![Bar chart showing that over the past 15 years, when equities fall, cash returned 0.07%, intermediate-term bonds returned 0.40% and long-term bonds returned 1.31%.]](/binaries/content/gallery/cti-blog/07_fal_09.26.23-adv-cotg-diversification_insights_chart.png)
- Over the past 15 years, when equities have declined, bonds have posted higher returns than cash equivalents.
- Investors who are overallocating to cash may be benefiting from relatively high yields and lower volatility today. However, a diversified portfolio that includes bonds could mitigate losses in down markets. This could provide investors with a smoother path to meeting their long-term investment goals.
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