I read a few books about asset allocation, e.g. Bernsteins's Asset Allocation states that mixing bonds with stocks lowers the risk significantly but only decreases the profit slightly. So there is a free lunch from diversifying these asset classes. A German book about investing recommends a AAA government bond ladder in the own currency for lowering the portfolio's risk profile. Both describe diff. riks types, risk types which can be diversified (indexing, asset allocation) and have no premium and a market risk which cannot be reduced.
But AAA bonds with low maturity in my home currency (EUR) seem to be a losing bargain. I found similar results here:
Clearly it makes no sense for a private individual to purchase these bonds since they will be better off simply holding cash. CIBC bonds with negative return
The simple answer: Because you believe every other option can yield greater losses... Why would I buy a Bond at a Negative Interest rate?
So does it make sense from an asset allocation/risk-reducing perspective to invest in these negative yielding bonds? Or is the risk-lowering effect lost if the bond has no/a negative yield? Otherwise, I may choose a "100%" equity portfolio and keep a cash reserve.