One thing lost in the bull market that preceded the credit crisis was the role that fixed income plays in a portfolio.Investors became accustomed to the starring role of equities as they delivered seemingly “risk free” double digit returns. The relatively low single digit returns from bonds became increasingly unappealing, causing some investors to reduce or eliminate fixed income altogether from their investment portfolio. What was overlooked during this period was that bonds have lower long term returns than equities because of the much greater certainty of both the amount, and the timing, of returns. As a result, bonds outperform riskier assets in times of economic or financial stress as recent experience has shown. For example, despite the recent rebound in equity markets, bonds have still managed to outperform equities by a large margin over both the last one and two year time periods. This is a stark reminder of the role that bonds play in a portfolio and the importance of keeping a portfolio in line with its appropriate long term asset mix.