Some new analysis by Deutsche Bank Research seems to show that this was perhaps a good (or at least, lucky) decision.
The following table is quoted by ShortSideOfLong (signposted by Monevator) and shows the total US dollar return performance of a range of asset classes since mid-December 2008. Of the top three asset classes, high yield bonds, took first and third place - Euro and US High Yield Bonds respectively. (The other asset class was copper - who would have guessed that?)
The returns on these high yield bonds since 2008 were in excess of 120%.
The FTSE 100 (which contains many of the dividend shares I hold) didn't do too badly either, coming in at 7th but trailing the S&P 500, which put on a terrific bull run and came 4th in the asset class rankings. By comparison, the overall total return of the DIY Income Investor portfolio over a similar period is around 86% - at a par with the FTSE 100. Good but no cigar, as they say - despite the holding of high-yield bonds.
|Source Deutsche Bank Research
I have not located the original research document yet - but further interesting DB musings on asset classes can be found here and here.
Unfortunately the DIY Income Portfolio approach is effectively based on 'reversion to the mean' - and the unwinding of QE is likely to be harsh on fixed-income prices. So long-dated bonds are perhaps not the best place to be in the future but perhaps short- and medium-dated bonds with good redemption yields will continue to be important in reducing portfolio volatility.
I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.