Why are bonds seen both as an 'attacker' and 'defender' depending on average per annum returns (as mentioned in Seedly TV Episode 1)?

Hey there friend!

I think you may have seen our old SeedlyTV Season 1 Episode 1 :) And yes it was me who brought up the idea that bonds are seen to be like a midfielder.

A Midfielder: Can attack and they can defend...

Let's take an example of the SSB (Singapore Savings Bond), you can choose to hold this for a period of 10 years.

• Defend: In the short term 1 to 5, the interest rates are lower, between 1% to 1.3% p.a

• Attack: In the longer term between 5 to 10 yeras, the interest rates can become higher, there were instances when it went up to 2 - 2.5% p.a (but now its definitely lower under 2%)

But with this in mind, bonds are often seen to be the balancing factor to stocks.

Where you breakdown your porfolio composition will look something like this:

• Agressive: 80% Stocks, 20% Bonds

• Balanced: 50% Stocks, 50% Bonds

• Defensive: 20% Stocks, 80% Bonds

Usually the two are inversely correlated in a bull or bear market as we are observing now.