(I come across this topic quite a bit and I think it’s hard for some people to understand so I am going to get a little nerdy here and see [ … ]
Category: How Things Work
5 Questions and Answers on “Passive” Investing, Part Deux
Here’s part two of the Q&A on passive investing. If you haven’t read part 1 it will be helpful to do that first since I laid out the necessary definitions [ … ]
5 Questions and Answers on “Passive” Investing
If you have read my 2012 essay on “The Myth of Passive Investing” then you probably don’t need or want to read what’s below. If there’s a consistent theme on [ … ]
The Difference Between Asset Price Inflation & Consumer Price Inflation
One of the more common responses to the fact that inflation is low is the idea that the inflation is all in asset prices. So, for instance, if someone were [ … ]
What Will Happen to Bonds if Interest Rates “Normalize”?
There’s a lot of chatter out there about rising interest rates and “normalizing” rates. As I’ve written about before, I think most of these fears are a case of short-termism [ … ]
Why Does Momentum Investing Work?
When you’re choosing an equity market allocation I generally prefer to keep things simple – just buy a low fee global market cap weighted portfolio and call it a day. [ … ]
Are Individual Bonds Safer than Bond Funds?
The WSJ was out with a piece discussing outflows from DoubleLine’s Total Return Bond fund this week. One of the reasons for the outflows was cited as the lack of [ … ]
Repeat After me: “Bonds Don’t Necessarily Lose Value When Rates Rise”
If you take a basic finance course the first thing you learn about bonds is that bond prices are inversely correlated to interest rates. So, when rates rise bonds prices [ … ]
Why I Prefer to Think of Stocks as Bonds
Bonds have always struck me as fairly simple instruments. In general, you know what a (high quality) bond’s return will be and you know what its time horizon is. That [ … ]