We have written in the past about how to address an upcoming dismal period for bond investors. See here and here . In this blog, I address advice I often hear and read in the financial press and from market pundits. After lamenting low yields, the pundit suggests something like the following: “Since yields on bonds are so low, why not just buy stocks with high dividend yields?” At first blush... READ MORE

Over the years I have run into people that have multiple leaves but separate piles for each leaf. In other words, they have multiple advisors to help them manage their assets. The reasoning they explain in having multiple advisors is that they are trying to "diversify" their risk. For some, that risk is the potential "bad egg" advisors that are out there (Madoff's a prime example of why people... READ MORE

As a fan and student of the game, I'm excited that baseball season is upon us. Bottom of the 9th, 2 outs, full count, bases loaded, down by 3. As a kid, we constantly played out this scenario in the yard, pretending we were one of the MLB greats at bat hitting the game winning grand slam. These are the moments we love to see as fans and players dream to be a part of. In reality, those great... READ MORE

Although most of the focus has been on stocks lately, it is bonds that have arguably had the more interesting year. Interest rates (which we will use the 10-year treasury yield to represent) have been climbing rapidly, starting the year from about 0.9% to 1.52% today. This often neglected number is extremely important. It represents the cost of money. Where the 10-year rate sits influences the... READ MORE

In almost any portfolio, for investors large and small, there are two primary parts. There is the side that should grow (almost always stocks), and there is the counterbalance that should give the portfolio safety (almost always bonds). This has been a fantastic strategy, especially for the last 40 years or so. So much so that any advice to stray from this balanced approach is often thought to be... READ MORE

I ran across an interesting article last week written by Larry Swedroe. Mr. Swedroe is a prolific writer having written eight books and numerous articles explaining, in layman's terms, how to be a successful investor. The article is titled, "The Importance of Diversification in Achieving Long-Term Goals." The beginning of the article describes a hypothetical investor who inherited $1 million in... READ MORE

In case you have not heard, we have an important election coming up. According to politicians it is the most consequential election in American history. That is a pretty bold claim when considering past election surrounding events like the Civil War, WWI, WWII and many other seminal moments in American history. Of course, this is the election happening now, so in this moment it is the most... READ MORE

The spread of Coronavirus and its impact on our health and the economy are increasingly becoming a more serious concern. We’ve reached more than 82,000 confirmed cases and the virus is continuing to spread globally, including in the U.S. Predicting what the next several months look like is impossible, but it's clear that the market is pricing in some serious economic concerns. As of 2/27, the... READ MORE

Timing the market is the holy grail of investing. On one hand, traders try to time the market opportunistically to achieve higher returns. On the other, many portfolio managers try to sidestep bad market conditions to lower the risk of the portfolio. The effect of compounding can make this a worthwhile practice, as seen in the table below: When you lose 50% on an investment, you need 100% gain to... READ MORE

Another decade came to a close last year. I thought it would be interesting to compare the last decade to the previous four decades. The table below shows returns for 5 primary asset classes and a globally balanced 60% stock/40% bond portfolio. For each decade the highest returning asset class is at the top while the lowest returning is at the bottom. A few observations: Stock returns across... READ MORE