3 reasons debt funds aren't just for retired & boring people

The idea that your portfolio should only focus on high returns is...erm...a bit flawed. Yes, earning high returns is important - maybe even the most important - but it is not the only thing that matters. Protecting your portfolio is important, too, especially when the market is depressed. While putting all your money in equity funds may deliver high returns when the going is good, this strategy may not do so in a bear market. Which is why you need to invest in debt funds. Think of them as the shock absorbers of your portfolio. Debt instruments often perform better when equity markets are under stress. While debt funds don't generate the sizzling returns we all crave, they add much-needed stability and help protect your money when the market is down and investors run out of nails to bite on. So no, these funds aren't just for retirees and boring folks - they are for every smart investor. Ready to see why debt is important? Let's break it down. Reason 1: Debt cushions your portfolio during market crashes Consider how a 70-30 equity-debt portfolio performed compared to a 100 per cent equity portfolio during past market crashes. During the steep fall in October 2008, a 100 per cent equity