Since the start of 2007, for instance, investors of all types have pulled $607.4 billion out of funds that invest in domestic stocks, according to the Investment Company Institute. In the same time, they've added $1.2 trillion to the coffers of bond
Bonds are a better option than cash and less volatile than stocks , but investors should be mindful of headwinds and possibly rethink their fixed-income allocations, says Morningstar's Christine Benz.
Morningstar's Eric Jacobson outlines three short-term bondfunds that can protect against rate sensitivity, but mind the risks as such funds aren't cash substitutes.
Portfolio Solutions' Rick Ferri expects stocks to return 7% and bonds to yield 2% during the next decade, and he also offers tips on how investors should handle their fixed-income positions.