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Why do bonds belong in almost every serious investment portfolio, and how can an ordinary investor without a finance degree begin building one today? In the debut episode of the Bondfish Human Finance Podcast, host Anatoly Shkareda, Chief Marketing Officer at Bondfish, sits down with the platform's co-founders, Stanislav Polezhaev and Renat Dovidenko, CFA, to tackle the most frequently asked questions received from Bondfish users across Europe and the United States. The conversation covers the core role of fixed income in a diversified portfolio, why the current moment in the business cycle makes bonds particularly relevant, how retail investors can navigate bond selection without professional help, and what currency diversification should actually look like in practice.
The Core Case
Stanislav Polezhaev opened the discussion by framing bonds as one of the simplest asset classes available to retail investors, a point he was careful to qualify. The concept itself is straightforward: an investor lends capital, receives a fixed schedule of coupon payments, and recovers the principal at maturity. What makes bonds compelling, he argued, is not complexity but certainty. Unlike equities, which can fall sharply and offer no guarantee of recovery within any defined timeframe, a bond held to maturity delivers a predetermined return regardless of what happens to its market price in the interim.
Beyond return predictability, Polezhaev pointed to yield advantage as a consistent feature of the asset class. In most markets, and particularly in the United States, bonds have historically offered meaningfully higher interest rates than bank deposits or savings accounts. That spread compensates investors for modestly higher complexity, while preserving the core characteristic of fixed income: knowing, from the moment of purchase, what a position will ultimately pay.
Renat Dovidenko extended the argument by focusing on what bonds do to a portfolio as a whole rather than in isolation. Drawing on long-run academic research comparing all-equity portfolios against balanced ones with a meaningful bond allocation, he noted that the blended portfolios produced returns not dramatically lower than their all-equity counterparts but with substantially reduced volatility across full market cycles. For non-professional investors, he observed, that stability is not merely a financial preference but a psychological necessity: portfolios that fall sharply push investors to sell at exactly the wrong moment, crystallising losses that a more conservative allocation would have avoided.
“The injection of bonds into the portfolio always, always gives you a better result — in terms of the total return in the end, and also in terms of risk.
— Renat Dovidenko, CFA, Co-founder, Bondfish
A further advantage raised by Polezhaev, and one that receives less attention in retail discourse, is currency access. In much of Europe, investors wishing to hold assets denominated in US dollars, British pounds, or Japanese yen cannot easily do so via bank deposits, which are almost universally offered in local currency. The bond market, by contrast, allows investors to hold foreign-currency positions directly while also earning a yield on them, making fixed income one of the few accessible channels for genuine currency diversification at the retail level.
Market Context
The discussion turned to a question prompted by a Wall Street Journal survey finding: roughly 10% of American 401(k) participants expressed dissatisfaction with the conservative options available in their plans, with many expressing a preference for cryptocurrency or other alternative assets. The co-founders used the observation as a starting point for a broader examination of where the economy sits in its cycle and what that implies for asset allocation.
Dovidenko was candid about his view. The remarkable 15-year bull run in US equities has made caution feel counterintuitive, he acknowledged, but that is precisely the condition under which historically informed investors have tended to reduce risk. He described the current environment as one consistent with the late phase of a growth cycle, a moment when bonds tend to demonstrate their relative merits most clearly. The recession phase of the business cycle, he noted, is typically the shortest, yet it can erase a substantial portion of the wealth held by investors concentrated in higher-risk assets.
Polezhaev introduced an important nuance: neither co-founder was advocating for market timing, a strategy they characterised as almost impossible to execute successfully. He recalled the well-known episode from the dot-com era in which a prominent fund manager, convinced the technology bubble would burst, built a large short position and was forced into bankruptcy just before the crash materialised. Being correct about the direction of a market, he observed, is entirely separate from being correct about the timing, and most investors who attempt the latter are eventually punished by it.
“What bonds actually do is make you not care about market timing. You may invest at low rates and rates may go up — but if you hold to maturity, you know exactly what you get.
— Stanislav Polezhaev, Co-founder, Bondfish
The practical implication, both guests agreed, is that investors who sense a shift in the risk environment should consider gradually moving a larger share of their portfolio toward fixed income, not in a single decisive bet against equities, but as a measured, structural adjustment toward quality. Both co-founders stressed that the selection of high-quality credits within fixed income matters considerably; the shift toward bonds is only as sound as the bonds chosen.
Practical Application
Anatoly Shkareda posed one of the most practically significant questions of the episode: whether an educated professional without a finance background, using only a platform like Bondfish, can responsibly select and manage a bond portfolio without engaging a financial adviser. The co-founders were direct in their response: yes, with the right framework, it is achievable.
Polezhaev outlined the three core questions any self-directed fixed income investor should answer before selecting instruments. First is tenor: how long is the investor genuinely willing to lock funds away, and does that timeframe match anticipated spending needs such as a home purchase or planned expenditure within a defined horizon? Second is target return: what yield level is the investor seeking, and is that expectation realistic given current market conditions? Third is credit risk tolerance: what level of issuer risk corresponds to the target yield, and does the investor understand what kind of business or government they are effectively lending to?
To support investors working through these questions, Bondfish has introduced a simplified five-tier credit risk scale running from very low to very high, accompanied by short, plain-language summaries of each bond's issuer, their business model, their financial position, and the key risks attached to the position. The intent, Polezhaev noted, is to compress the analytical work that would otherwise require a Bloomberg terminal and professional training into a format accessible to a motivated individual investor.
On the question of financial advisers, Dovidenko drew a distinction between trusted personal contacts with genuine expertise, whom he described as valuable, and fee-based independent advisers whose independence is often compromised by distribution arrangements with financial institutions. The latter, he argued, may present a narrower universe of instruments than the full market offers, because their recommendation set is shaped partly by commercial relationships rather than solely by client suitability.
A Framework for Selection
Define your tenor. Identify how long you can realistically commit your capital. Map this against known future spending needs — a property purchase, an education payment, a planned life event — so that bond maturities align with actual outflows rather than abstract preferences.
Establish a target yield. Decide what return you are seeking and verify that it is consistent with current market conditions. A yield significantly above the prevailing rate environment signals elevated credit or duration risk, which should be acknowledged rather than ignored.
Assess credit risk honestly. Use the issuer's simplified credit tier to understand what probability of default you are accepting. For higher-yielding names, read the bond's highlights summary and, where possible, review publicly available financial data and news on the issuer.
Prioritise domestic currency for the core allocation. Because most investors spend their wealth in their home currency, the majority of a bond portfolio should match that currency. Foreign-currency exposure adds a layer of diversification, but it also introduces exchange rate risk that can offset yield gains entirely in adverse scenarios.
Diversify across issuers, not just asset classes. Within the bond allocation itself, spread exposure across three to five names at minimum. Concentration in a single issuer, however highly rated, introduces unnecessary idiosyncratic risk; the cost of diversification within fixed income is low and the benefit is substantial.
Case Studies
Case 1: Italian investor, 35, 150k total wealth, 50/50 bonds and equities. A 35-year-old professional based in Italy, with approximately 150,000 euros in total invested wealth split evenly between bonds and equities, described a focus on euro-denominated returns and an explicit goal of avoiding the panic-selling behaviour that equity drawdowns typically trigger. Dovidenko and Polezhaev both affirmed the 50/50 allocation as a sound starting point, but noted a common psychological bias among European investors toward domestic assets. Both advised widening the geographic and currency lens modestly: Dovidenko suggested looking at USD-denominated bonds and a small allocation to commodity-related instruments, while Polezhaev argued that the domestic-currency preference is not simply a bias but also a financially rational choice for investors who spend their wealth in euros. A small additional position in non-euro currencies, both agreed, can provide useful counter-cyclical movement without materially disrupting the core allocation.
Case 2: UK-based investor, 47, targeting 40% bond allocation ahead of retirement. A 47-year-old investor in the United Kingdom, currently holding 20% of his portfolio in bonds with an ambition to reach 40% over the following decade, described dissatisfaction with bond ETFs based on past experience with unpredictable returns. He holds gilts and a small number of UK corporate bonds, with primary exposure in sterling and US dollars, and was considering Swiss franc bonds for additional stability. Polezhaev encouraged the direction of travel toward higher bond allocation, noting that as investors age, the capacity to recover from a severe portfolio drawdown through future earnings diminishes substantially. On currency, he advised against treating CHF exposure as a meaningful yield source, given the scarcity of Swiss franc bonds and their consistently low yields, and suggested the euro zone as a more liquid and better-yielding alternative. Dovidenko highlighted the statistical benefit of modest allocations across a broader range of currencies, including emerging market and Asian currencies where a broker's platform permits it, noting that even a 5% exposure to an uncorrelated currency can reduce portfolio-level volatility in a measurable way.
Key Takeaways