Capital for Living a More Practical Life
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 safety in a bond fund: Among those bailing are individual investors, who helped fuel the fund’s growth but can be quicker than institutions to pull… Read More
* Sorry for the brief hiatus. Life got in the way and I had to take some time off. All is better now in case anyone cares. Here’s a good interview in Barrons with James Montier of GMO. But a few things really irked me about the interview. This is unusual for me since… Read More
The following ten posts include some of the biggest myths in the investing world. I hope you find them educational and informative.
This is the ninth instalment of a ten part series similar to what I did with “The Biggest Myths in Economics”. Many of these will be familiar to regular readers, but I hope to consolidate them when I am done to make for easier reading. I hope you enjoy and please don’t forget to use the… Read More
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 fall and vice versa. This idea is so ingrained into people’s heads that it seems to have become the only thing that anyone can remember… Read More
With a change in the US Treasury Secretary soon taking place I get to play fantasy world and imagine how I would handle the transition if I were nominated.¹ One of the common ideas these days is that we should be “refinancing” government debt and “locking in” low rates. Soon to be Treasury Secretary Steven… Read More
One of the more common investing myths is the idea that indexing is necessarily “average”.¹ It makes sense at first. If you bought all of the stocks in the market then you’d generate the average return. It would be like playing fantasy football and picking all of the players in the NFL. You would lose… Read More
As indexing strategies gain in popularity I am seeing a common selling point from active stock picking fund managers – the idea that more indexing creates more opportunity for active managers. This appears correct on the surface. After all, if everyone started using index funds then this would create a homogeneous set of product wrappers that cannot… Read More
Donald Trump made some controversial comments the other day regarding the national debt. First, he said: “We’re paying a very low interest rate — what happens if that interest rate goes up 2, 3, 4 points?” he said. “We don’t have a country. We have tremendous debt, tremendous.” Second, he said: “I’ve borrowed knowing that… Read More