Are Bond Funds Stalling Your Investment Progress?

Hosted by Bob Simpson, today we shift the focus to answering the question "Are Bond Funds Stalling Your Investment Progress?".

Bob Simpson, the host of My Private Network podcast, discusses his concerns with bond funds. He highlights the general issues investors have faced over the past 10 to 15 years, noting that there is a significant problem with their performance. He emphasizes that his critique isn't aimed at any particular bond fund but rather the category as a whole.

Through his analysis, he identifies 339 Canadian bond funds with five-year track records, which collectively manage nearly 422 billion CAD. Despite these significant assets under management, the returns have been disappointingly low.

He highlights the importance of understanding fees and their impact on returns, pointing out that paying fees to both bond managers and advisors can reduce returns to around 3%, making it crucial for investors to scrutinize their investments. 

Bob also delves into private lending markets, suggesting that investors consider private lending or mortgage funds as alternatives to bond funds. He explains the benefits of diversifying into these areas to achieve higher returns after fees while managing risks. He advises investors to thoroughly understand the types of loans private lenders make and the importance of diversification.

He encourages listeners to re-evaluate their investment portfolios and consider alternative strategies. He stresses the importance of proactive financial planning and staying informed about investment options. 

Points of Interest:
0:00 - Intro
0:58 Bonds made nearly 422 billion CAD in a 5-year track record.
1:37 3, 5 and 10 year disappointing return rate.
2:11 Bonds vs. GICs - stagger or ladder maturities?
3:08 Would you lend money to the province of Ontario, for example, for 10 years at 4.5%?
3:38 20 years ago, bond yields were in the 8 to 10 percent range.
4:11 Current bond and GIC landscape.
6:41 Should you still consider the 60/40 or 40/60 diversification in an investment portfolio?
7:01 We recommend you stop lending banks money and "be the bank" yourself.
8:25 Important investment terms you should know.
8:48 Following podcast release plan.
9:59 If you want to learn more, please get in touch with us!
10:45 Final thoughts toward your best financial health.

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