ARE JUNK BONDS RISKY? That was the question from a friend in his late 20s, whom I’ll call Josh. I answered that they were probably risky for him, but quite safe for me. Josh looked puzzled—until I explained that risk is in the eye of the beholder.
Josh has a stable career that pays well, but he doesn’t plan to stick with it forever. Instead, he wants a job that relates to his passion for outdoor activities.

I MADE A SMART financial decision last year that netted me thousands of dollars. What’s so fantastic about this decision is that I didn’t have to do anything. I just sat back and let my investment portfolio do all the work.
If you did what I did and ignored the talking heads, and just bought and held a diversified mix of stocks and bonds, your investment portfolio performed well in 2020. Those who warned about investing in overvalued domestic stocks and low-yielding bonds might be right one day,

MONEY MARKET FUNDS and other cash investments are paying interest rates close to zero. This is at a time of turmoil in society and in the economy. This is at a time when both stock and bond markets are at high prices. It seems like we have to choose between collecting very low yields on cash or buying investments with far greater risk.
An alternative to these extremes: How about a “short-term barbell” to hold money you don’t currently want to invest or don’t yet need to spend?

IF YOU OWN AN actively managed mutual fund, you expect the fund’s managers to buy and sell stocks and bonds as they see fit—and yet all that trading isn’t necessarily driven by their investment decisions.
Why not? Imagine the fund has had a few years of underperformance. That might prompt impatient investors to take their money elsewhere. This exodus can create headaches for the shareholders who still have faith in the fund. How so?

DEAR FAMILY, YOU KNOW I don’t typically give unsolicited investment advice. But today, I’m breaking that rule, because I don’t want you to get hurt financially.
I can’t promise that, by following my advice, you’ll be better off in the short run. But I firmly believe that you’ll be better off in the long run, by which I mean in the next five to 10 years. Please take this letter for what it is,

AS YOU STRIVE TO DO well, should you also strive to do good?
We’re seeing a boom in environmental, social and governance (ESG) investing. For instance, according to a recent Morningstar report, there are now 534 index mutual funds and exchange-traded funds (ETFs) around the world that screen their holdings using ESG criteria. Together, these funds have almost $250 billion in assets—more than twice the sum they had three years earlier.
ESG investing offers a way to invest in funds that consider issues such as the use of natural resources,

MUCH OF THE MEDIA commentary about investing positions the individual as a heroic figure. We are, it seems, all supposed to deploy our expertise in a battle to beat the market, with bragging rights going to the winners.
Problem is, this framing is based on three myths.
Myth No. 1: Your job is to outwit the financial markets.
Underlying this is the notion that the key to investment success is to have rare insights and expertise not shared by anyone else,

WHY DO I AVOID individual stocks today? I’ve previously written about the big loss on a broker-recommended stock that led me to manage my own investments.
That loss, however, didn’t deter me. In my early days as a do-it-yourself investor, I mainly bought mutual funds, albeit too many of the high-fee actively managed variety. But I still had an interest in picking individual stocks.
In fact, it was part of my investing heritage. My father had always invested in individual stocks.

WELL, IT SOUNDED good. Academic theory and nearly a century of investment experience supported the argument that small-cap value is the most promising market segment over the long term, since it offers the superior risk-adjusted return that comes with owning both neglected small-cap shares and shunned value stocks.
But as legendary economist John Maynard Keynes observed, in the long run, we are all dead. In my 36-year investment career, both small- and large-cap value have lagged large-cap growth.

TESLA JUST REPORTED financial results for its most recent quarter. For the fifth time in a row, it announced a profit. This was notable for a few reasons. Among them: Tesla’s increasingly strong performance again raises the question of why it’s been excluded from the S&P 500-stock index.
By way of background, the S&P 500 includes almost all of the 500 most valuable publicly traded companies in the U.S. But Tesla’s stock isn’t included,

THEY WERE GURUS and gunslingers. Market mavens. Stock pickers and sector bettors. Over in the bond market, there was even a king. They were star fund managers—but most were shooting stars, destined to crash.
Yes, we’ve had managers like Peter Lynch, Will Danoff and Bill Gross, whose long-term returns did indeed beat the indexes. But for every winner like them, there have been—statistically speaking—seven who failed. Between 74% and 93% of funds in a variety of broad categories—small-cap,

WHEN I WAS GROWING up, I don’t remember my parents talking about the stock market. In fact, I’m not sure when they started buying stocks. It could have been sometime after I graduated from high school in 1969.
When I was a junior in high school, however, I do remember a conversation about stocks between two of my classmates. Brandon was telling Brian that he could buy a motorcycle if he sold some of his shares.

LET’S START WITH the obvious: If you buy high-quality bonds today, you’ll collect very little yield—and there’s an excellent chance you’ll lose money once inflation and taxes are figured in.
Take Vanguard Total Bond Market ETF, which aims to track U.S. high-quality taxable bonds. It yields some 1.2%, which is below the 1.7% expected annual inflation rate for the next 10 years, and the amount you pocket will be even less after deducting taxes.

MY HUSBAND AND I have been investors for a long time. For us, it’s an interesting hobby and we’ve learned a lot along the way, plus we’ve made some money.
Friends and family sometimes ask what we’re doing and whether we can help them. Neither of us has any sort of certification as a financial advisor or any sort of formal training in investments. We can just imagine what a wrong suggestion would do to a friendship or family relationship.

WITH THE ELECTION just a month away, many investors are worried about what lies ahead. Does it make sense to lighten up on stocks now, in advance of the election? I see at least four reasons not to sell:

Despite the polls, we can’t be sure what the result will be.
As we saw in 2016, nobody knows how the market will react to that result.
Even if the market reacts negatively, the effect may be temporary.