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Category: Bonds

For the fifth consecutive year, responsible financial advisors all across the country are apologizing to their clients. Why? Because the diversified portfolios they have built are lagging the S&P 500 … for the fifth consecutive year. Any way you slice it (from conservative to aggressive), diversification has failed to keep pace with the S&P 500, […]

The Single Best Predictor of Bond Returns

What are you expecting from the bond portion of your portfolio over the next five years? 5%? 6%? 7%? These would all have been reasonable expectations in the past, but past is not prologue, especially when it comes to investing. Whatever number you were thinking of, it is likely too high. Why? The largest Bond […]

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7-Year Forecasts

“We really can’t forecast all that well, and yet we pretend that we can, but we really can’t.” – Alan Greenspan Seven years ago, one of the largest and most respected investment managers, GMO, presented their widely-followed 7-year asset class return forecasts. A summary of the commentary accompanying these forecasts: “The consumer is as badly […]

The Passive Investor Test

Passive investing is all the rage. Active has become a four-letter word. Are you a passive investor? Let’s find out… 1) Do you own a higher percentage of stocks in your portfolio than bonds? 2) Does your house make up the largest component of your net worth? 3) Do you ever rebalance or sell/change the […]

Canceling Signals

“This is a big, big gamble to be manipulating the most important price in free markets, interest rates. These purchases are canceling market signals. The bond market and the stock market have provided wonderful signals for many years as to potential problems. And when you cancel those signals, you could run into a problem. I […]