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I think the first thing to ask yourself is how many years until retirment, how much do you need to retire comfortably, how much you will be earning in retirement (through social security, etc) and from there, calculate the return that you will need to achieve. If you are going to own bonds, and you have a long time until retirement, I would make sure and look at I-Bonds or TIPS (Treasury Inflation Protected Securities.) Obviously, your goal with bonds is not to get rich, it is to protect your money against inflation and earn a decent rate of return. Both I Bonds and TIPS are inflation indexed securities and pay a fixed rate above the rate of inflation (determined by changes in the consumer price index CPI). If you are going to own bonds, I think that owning some inflation indexed securities are essential. A couple of books on the subject of I Bonds and TIPS are: Worry Free Investing by Bodie and The Coming Generational Storm by Kotlikoff. The later is more an explanation of why owning inflation indexed securities is a good idea.

Best,

Cameron
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