Government “Help,” Fiduciary 101 and Investing 101.
Bond investing is not for the faint-hearted. Because of the myriad ways one can use – and misuse – bonds, buying them represents one of the most important caveat emptor scenarios in the world of investing.
Would there still be a “Modern Portfolio Theory” if the volatility of bonds today existed 50 years ago?
What does the Fiduciary Standard, upside down mutual fund conventional wisdom and dullard annuities all have in common?
The two conducted simulations and discovered they can fully explain the Equity Premium Puzzle if investors look at their portfolios on an annual basis. Here’s how it works.
Why define bonds? A literary technique known as “foreshadowing” is when the author mentions a seemingly innocuous, indeed, if not out-of-place, fact that will have a major bearing in some future event in the plot.
Again, it comes down to a question of needs, costs and personal preferences. What’s more important: Avoiding bankruptcy and sharing control or increasing long-term profits and retaining control?
The wildness of the equity markets and the uncertainty of our economic environment appears to be opening the eyes of the typical fiduciary to more exotic investments. The practical implication may mean greater potential liability.
Investors have decided to flee two asset classes: stocks, perhaps because of their dramatic gains in the last six months; and cash, perhaps because of historically low interest rates. In either case, investors have signaled their lack of confidence in a near term recovery in the American economy.
Diversification does not protect the investor when the entire asset class sinks. A recent study from Hewitt Associates suggests events may be placing plan fiduciaries in a historically precarious position.