This makes good sense to me. Thank you

Quote Originally Posted by peat View Post
the point of bonds is to smooth your returns and reduce volatility as they (supposedly) perform opposite to equities - though this isnt the case in more recent times when EVERYTHING is going up.
At the very small portfolio level you could as macduffy suggests avoid bonds and if you can accept the bad years that equities that may have just run with that.
However I personally think fixed interest investments are useful. I tend to use T/D's instead of bonds although these don't have capital gains/losses as bonds do. One of the problems with buying and selling bonds is that transaction fees are quite high especially for small investors. You may b e able to avoid these in funds but fees there will tend to destroy returns.
An amount of cash (possibly as you save towards further equity investments ) could act as a smoother of portfolio returns in that it wont go down when the equity market does during these early stages of wealth generation.