At a financial planning conference in the mid- 1990s, I saw a top asset-allocation expert announce that her firm had recently made the decision to ignore bond-market returns before 1971, which is when President Nixon took the United States off the gold standard.
To her firm’s reasoning, that change inaugurated a new era of bond volatility, and the stable returns of the 1950s and 1960s could no longer be expected. The new reality for bond investors would be more like the tremendous volatility witnessed in the 1970s and 1980s.
Don Phillips does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.