An article yesterday by David Lancaster detailing his bond fund investments going pear-shaped during the 2022/23 bond market crash got me thinking about what I have actually learned from this costly experience that took many of us by surprise.
Like David, I perceived bond funds as a “safe” or “stable” investment, assuming they behaved like individual bonds held to maturity. The recent downturn, however, exposed my lack of understanding. When rates rose rapidly, the market value of the bonds within the funds dropped.

As I shared a few weeks ago, I’m in the process of moving the money from my workplace retirement accounts at Fidelity to my rollover IRA at Schwab.
This, like other aspects of my retirement transition, has had its bumps in the road. Fidelity will only mail a check to your home, no electronic or direct transfers, so I called them a couple of days before we left San Diego last week to begin the process.

In January 2020, I invested 150K I had inherited from my parents from the sale of their house. I knew it would be years before I would tap this money, so I invested in Vanguard’s intermediate bond fund in my brokerage account. I had learned that bonds were a safer investment than stocks and I could earn a somewhat higher return than in CDs that were paying next to nothing in interest. By September of ‘21 I was looking like a genius as I had earned 10K.

Trying to guide some “30 somethings” on appropriate holdings for a taxable account. I’m a little out of my element as almost all my personal investment experience has been in some type of qualified account where taxes don’t matter. Christine Benz recently did a piece that suggested 3 exhange-traded funds – Vanguard Total US Stock (VTI), the Total International (VXUS) and a Tax Free Municipal Bond (VTEB) in varying asset allocations depending on risk.  I’m just wondering if this is “too simple”

I have a confession to make: Over the past year, I’ve been moving money out of U.S. Treasuries and into international stocks. For someone who’s long preferred safety over risk, this marks a major shift.
The catalyst, somewhat surprisingly, was a 2024 memo: Howard Marks’ “Sea Change.” Marks—a legend in the investment world—made the case that we’re living through only the third true inflection point in markets since the 1970s. He highlighted structural shifts: the end of a four-decade era of declining interest rates,

In recent years, I’ve regularly heard from readers who have faced service snafus at Vanguard Group. Many of these folks have stuck with Vanguard’s exchange-traded funds, but moved their accounts to Charles Schwab or Fidelity Investments, with an eye to getting better service.
Over the past 12 months, however,  I’ve heard far fewer complaints from readers. Does that mean service has improved—or does that just reflect the fact that the disgruntled have moved on and those who remain are willing to live with occasional poor service?

There are an ever increasing number of ETFs available to investors.  There is also the “tokenization” of stocks, but that is for another post.
Jason Zweig addresses the proliferation of ETFs over at the Wall Street Journal:
“deworsification: cluttering a portfolio with too many investments.
I think many investors should worry instead about deversification…..That’s the opposite of diversification. Rather than spreading your bets, you concentrate them—and that can be dangerous.”
Over at another forum there has been a running debate about how many stocks to own to achieve diversification.

We welcomed guests to stay over at our holiday home yesterday. It was a lovely sunny day in the low 80’s and we spent our time at the beach. They’re a young couple we’re very close to who are getting married next week. We are looking forward to attending their wedding. They are a very sensible duo in their late twenties with good jobs, they also managed to get on the property ladder through their own hard work.

OVER THE JULY FOURTH weekend, a friend asked me what I thought about the new financial instrument known as a “stock token.” Developed by the online broker Robinhood, a stock token is designed for investors to buy stakes in private companies such as OpenAI, creator of ChatGPT. It’s a novel concept because private company investments are typically inaccessible to individual investors.
Despite the appeal, I urged caution. Why? These tokens may not perform as expected because they aren’t the same as actual equity in a company.

While I am satisfied with my current investments and have not made any significant changes in several years I do occasionally evaluate alternatives.  I recently read a Morningstar article titled “Top-Performing Stock ETFs of the Quarter”.  Most had higher expenses than I would be comfortable with.  But several were low-cost, including Invesco S&P 500 Momentum ETF SPMO at 0.13% expense.  This ETF tracks the S&P 500 Momentum Index.  This got me looking into what “momentum” investing was all about. 

With passage of the most recent Federal legislation the Congressional Budget Office projects another 3.5 trillion dollars added to the US debt over the next 10 years. The inevitable result of this will be the Federal Reserve having to increase interest rates.
In 2022 this scenario resulted in a bloodbath in my intermediate bond fund. I don’t remember in my copious reading any advanced warnings of prices dropping precipitously as interest rates increased (in fairness I had read about the inverse relationship between prices and yields,

Crab Fishing, cold beer and your portfolio 101
While I was enjoying the simple sight of kids crab fishing at Portballintrae harbour, pondering the wisdom of a cold beer at the boat club, a sailing boat came into the harbour entrance. And just like that, I thought to myself:
A sailing boat is a tiny bit like a financial portfolio. The boat itself acts as the wrapper – your 401(k) or IRA – providing a protective structure.

ON DEC. 31, 1759, Arthur Guinness signed a lease to take over a defunct brewery in Dublin. What was unusual was the lease’s term: 9,000 years.
It didn’t take long before Guinness and his landlord both realized they’d made a mistake and agreed to end the lease. Guinness needed more space, and the landlord realized he’d neglected to account for inflation. The rent was fixed at £45 annually for the entire 9,000 years.
The Guinness case is notable because it’s so extreme,

Most of the arguments against investing in individual stocks boil down to investors not being able to beat the market, therefore shouldn’t even try, and instead buy low-cost index funds. The fact that “you (or any money manager) can’t consistently beat the market” was even confirmed by the world’s greatest money manager, Ken Fisher, in a recent article of mine.
At this point, it will usually be mentioned that buying and selling individual stocks results in increased (and earlier) taxes due to having to pay tax on your capital gains when you sell the stock.

I fear rebalancing has been oversold—and that I was one of the overeager salespeople.
Rebalancing is primarily a risk-control strategy. As financial markets rise and fall, we may find we have more than our target portfolio percentage in large-cap growth shares, or emerging markets, or stocks generally. Rebalancing back to our portfolio targets trims our exposure, reducing the risk of a big financial hit if there’s a reversal in the market’s recent rise.
But rebalancing is also pitched as a way to boost returns.