Doesn't matter. At some point bonds MAY take a big hit (and that's enough for me to be weary). I'm in the process of dumping this bond and getting a 2 year CD. Too much volatility for something yielding 2.5%. I don't do stocks - period. I prefer index funds because of superior diversification. And I buy and hold. With dividends its hardly a bad deal that some make it out to be. By the way, total return is not over a single year or two years. Its over the lifetime. You can't keep getting lucky. This is where casino effect will take its toll. Timing anything is impossible (even if you are Warren Buffet), and we don't have a billion dollars to blow. It's worth working with a good money manager who does DFA or Vanguard index funds. You can do all of this yourself, and you'll never have to buy a single stock in your life. Risk is what kills everybody eventually. Return is bunk. Control risk, and you'll get a return that beats 90% of professional money managers. Index funds by themselves are a double-edged sword. Just because somebody doesn't know how to build buy and hold portfolios doesn't make them bad or worse than stocks. Bonds are there for a reason. They are to control the risk. This is a decent example of diversification: www.ifa.com. I have nothing to do with them, but they give you the basics. They are quite wrong about risk, but this should give you something to chew on for a while.