As short rates rise the tendency for novice bond investors is to believe that the short end of the curve suddenly makes it irrational to hold any long-term bonds. While [ … ]
Category: Investment Strategy
Do Bonds Still Diversify When Rates Rise?
Rates have inched up enough now that if you squint your eyes you can see the change on a 40 year chart. I say that partly in jest, but the [ … ]
Why Does the Rebalancing Bonus Work?
One of the best parts about Twitter is that you can follow super smart people and just read their interactions. For instance, yesterday I was creeping on Jeremiah Lowin, Jake [ … ]
The Best Investment Strategy: DISCIPLINE
I was reading this article in the NY Times about a wide ranging diet study. They performed a meticulously controlled test to study what type of diet works best. Their [ … ]
How to Overcome Your Fear of Bonds
I specialize in building relatively conservative “all weather” style indexing portfolios. They are designed for people who have a reasonably long time horizon (at least 5-10 years), don’t want to [ … ]
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. [ … ]
Why Indexing Works
I am a big advocate of low cost diversified indexing in much the same way that most Vanguard funds work. The reason for this is simple – it’s been proven [ … ]
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 [ … ]