“When most people in our space talk about risk, what they really mean is volatility. And if you've got half a brain in your head, then volatility is not risk. It's volatility. These are very, very different things. Risk is the permanent loss of capital, which is exactly what you've experienced. In bonds… Shares have been really, really volatile, but they've made you a fortune.”
Motley Fool Money · October 2026
A listener in his late twenties asked whether he should give up some return and hold bonds alongside his share ETFs. The host's answer is a flat no: he argues government bonds have lost money in real terms over the past decade, so the "safe" asset was the one that actually cost investors.
Transcript
how it's done. That's how it's done.
…investor with a relatively long, I'm going to keep talking, with a relatively long time horizon. Although, Jackie, you probably guess what Andrew's thought will be. Or is the volatility of equity something I should simply accept at my age? Here's an answer I prepared earlier around. Go for it.
…bro, from someone who's a profligate spender and who cannot manage their finances. Please, like, we can't give advice, but if I could, Jack, I would strongly advise you not to get into bonds. And if you had followed that advice over the last 10 years, you would have, you would have been much, much, much better off. You know, it's just, it's, and the other thing, too, is you've got to understand when most people in our space talk about risk, what they really mean is volatility. And if you've got half a brain in your head, then volatility is not risk. It's volatility. These are very, very different things. Risk is the permanent loss of capital, which is exactly what you've experienced. In bonds, shares have been really, really volatile, but they've made you a fortune. Now, ask yourself which one you prefer. So, when people say, oh, risk and this and that, they're just repeating tropes that sort of sound good in a certain, you know, on a certain angle, there is some reasonableness to it, but just not in the man in the street, average, common sense, pub test kind of way. Does it pass…
Or they see complex financial advice where you need to combine your portfolio in strange and complex ways that only you could use a financial advisor or a portfolio manager to help you with.
Absolutely. Now, at the same time, it is absolutely true to say that ETFs have risk. Of course, they do. Now, again, let's not try and predict the future and we'll just look at the past. ETFs didn't exist in the 70s, but you could have bought some late 60s, early 70s, and lost a massive amount of…
So I'm going to contextualize your answer. I'm going to end up at the same place. We're going to textualize your answer. There's a couple things we should say. Firstly, is it. I'll say safer in quotes. I don't want to say safer. Is there a world in which shares drop and permanently lose value? Yes…
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