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.
Relative to their categories, Fidelity's stock funds generally fared better than its fixed-income portfolios last year, but several funds in both camps have good long-term prospects.
Inflows to fixed-income products continued in November on account of market-volatility worries, while equity outflows this year could surpass 2008 levels.
Morningstar's Christine Benz demonstrates how our Tax-Equivalent Yield Calculator can help you determine whether you're better off investing in taxable or municipal bonds after adjusting for munis' tax-exempt status.