When is the right time to invest in a bond index fund
I really appreciate the simple and minimalistic approach of JL Collins. He defines two investing phases:
- Wealth Building,
- Wealth Preservation.
In the first while you’re in the most productive part (from a financial standpoint) of your life, you invest only in stocks. Because that will give you a bigger return. In the wealth preservation phase you differentiate a bit more. In particular JL Collins suggests to invest 25% of your savings in a bond index funds. This way when you become more dependent of your savings you’ll have a deflation hedge.