Re: How safe is the stock market?
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ETF's are like a bond fund, the interest is reflected in the total tield?
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Let's take IEF, the iShares 7-10 yr Treasuries. A simplified version of what it does is to buy a 10 yr Treasury, hold it for a 3 yrs and sell. (Of course, in reality there is going to be a mix of maturities, holding times, etc.) Any interest and gains are then passed to the shareholders as dividends. Obv, you don't have much control over things compared to buying and selling bonds, but you also have minimal transactions costs, which is definitely not true if you actually were going to buy & sell bonds.
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I'm not saying nobody should have bonds either, but you were asking why there seems to be little interest in them. I gave you one reason - too much additional risk for too little additional value.
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[img]/images/graemlins/confused.gif[/img] The purpose of adding bonds to an equity allocation is to sacrifice some expected returns for a reduction in volatility (both of these from the perspective of your entire portfolio).
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