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How to Diversify Your Portfolio With Short Term Bonds
Short term bonds are basically talking about something that you are holding for stability and has essentially a zero correlation with whatever else is in your portfolio. You can switch in and out of these things as times change or your tax rate changes. Now getting to diversification, there is a big difference here between your short bonds and your long bonds. The purpose of long term bonds is diversification and in particular diversification from stock funds.