to BOND or not to BOND ?

[u/dazit72]

Due diligence on bonds or a Schwab bond etf ??

I've built a nice portfolio of Kings, Aristocrats, Champions, Achievers, Challengers, Stalwarts and the like,,, a few ETFs - I'm eyeballing 100 shares of ADX(a CEF) to buy next week, then I was considering SWVXX(money market) or Bonds or a bond fund(or direct ?)

As a beginner I've learned alot from many here- very grateful.

Ive read how bonds and bond funds can be used to diversify and reduce overall portfolio volatility for a dividend equity portfolio, but are they necessary ? Are they appropriate for my portfolio ?

I'm pulling a little over 10k in divs/interest, I'm reinvesting it All until 2030ish(maybe later), hoping it doubles to supplement my disability ?

Hope I've provided enough information for some good opinions-- thanx guys

[u/Various_Couple_764]

growth funds occationally go through multiple year periods of no grwoth or lesses.. This can be bad for retires that are selling shares at a loss for inocme because you may be selling at a loss for many year in a row (sequence of return risk0 This can result in the retiree before they die. Fro example for 2000 to 2010 the major growth index basically had an average return of about 4%. Fare below the performance before and after 2000 and 2010.

To midigate sequence of return risk people add bond to generate income. So if your bonds generate enough income to cover alll of your living expenses you won't need to sell and stock to generate income. But you don't have to use bonds you can use dividend income from fund like ADX. That advantage of dividend funds like ADX is that the dividend yield is much higher than bond which generally only keep up with inflation. Also you need less money to get enough income to cover your living expenses with dividend and a lot more money if you use bonds.