THE RECENT CARNAGE in bonds has been unusually fierce. The Bloomberg Aggregate Bond Index is down more than 7% year-to-date. Unfortunately, this may be the tip of a very large iceberg. I believe we may be standing on the precipice of a multi-decade bear market for bonds.
The reason for my concern can be summed up in one word: inflation. It’s the great enemy of bond investors—and yet, despite an inflation rate that’s at four-decade highs,

JERRY SEINFELD tells a story about visiting the post office and noticing a wanted poster on the wall. He looks at the poster and checks the guy standing behind him. “If it’s not him,” he says, “I feel I’ve done my part.”
I own some individual stocks, so it’s that time of the year when I vote my proxies. I do the best I can at trying to understand the issues. Sometimes, I wonder whether I’ve really accomplished anything.

WHEN I TAUGHT AT the University of North Florida, I always sought to arm my finance students with the best tools of the trade. College textbooks are notoriously expensive, so I aimed to provide some great free resources. Few things get me more pumped than when I come across an impressive financial website—one that doesn’t charge.
One of the most frequent questions from students: What sites do I visit every day? I would often share stories in class about various writing assignments and investment projects I was working on,

AS YOU MIGHT GUESS, my favorite Seinfeld episode is “The Stock Tip.” It starts with a conversation between George and Jerry.

“My friend Simons knows this guy Wilkenson,” George says. “He made a fortune in the stock market. Now he’s got this new thing.” George goes on to explain that Wilkenson has millions invested in a company called Centrax.

He urges Jerry to invest along with him, though the details are thin.

AS INTEREST RATES head higher, where should bond investors turn?
A lot of ink has been devoted to Series I savings bonds—for good reason. The initial yield, which applies to bonds bought through April, is north of 7%. Come May 1, it might go even higher if the inflation rate continues to climb. The recent energy price surge wasn’t fully reflected in February’s Consumer Price Index, so the coming months’ reports could be even more alarming.

ARISTOTLE WROTE THAT, “It is a part of probability that many improbable things will happen.” Investors certainly understand this. For better or worse, we know that the market has frequent ups and downs. On average, the S&P 500 has dropped 10% or more approximately every 18 months, and it’s dropped more than 20% about every four years.
Unfortunately for investors, another fundamental truism also applies: We dislike losses disproportionately more than we like gains.

“MARGIN OF SAFETY” is a concept with deep roots in finance, going back at least as far as Benjamin Graham’s Security Analysis, first published in 1934. The idea: Investors should never be too confident in any analysis and should leave the door open to the possibility that their analysis might be right but not precisely right.
Suppose you’re interested in buying Microsoft stock. And suppose that, after analyzing it,

I’VE BEEN IN LOVE with index funds for a long time, especially for a reason that doesn’t get enough attention. Lots of financial writers correctly praise index funds for their low costs, low turnover, low drama, massive and easy diversification, and numerous other good attributes.
But the No. 1 reason you should love index funds is they will keep you out of the hands of pushy, unethical financial salespeople. If Wall Street knows you’re committed to index funds,

I WROTE ABOUT the perils of timing the market last Sunday. This week, I’ll address its close cousin: stock-picking.
These days, many people accept that stock-picking isn’t a great idea. Evidence shows that both professional and individual investors fare poorly, on average, when they choose individual stocks. But why exactly is that? How is it that indexes—which are simply lists of stocks—so frequently outpace the results of professional portfolio managers?
There’s more than one answer to this question.

THERE’S A SCENE in Three Days of the Condor, that very ’70s, America-in-decline movie, where the CIA is the bad guy and Robert Redford’s character is in danger of imminent extinction.
Max von Sydow’s character Joubert—the Alsatian assassin—warns him that he has “not much future.” Then he calmly describes how the CIA will come for him.
“It will happen this way,” Joubert says. “You may be walking. Maybe the first sunny day of the spring.

SOMEONE ASKED ME last week about a popular and frequently cited market statistic. It goes like this: The U.S. stock market has historically delivered an average annual return of 10%. But if an investor had missed just the five best days over the past 30 years, that return would have been cut to 8.6%. If the investor had missed the 15 best days, the return would have been reduced even further, to 6.5%. Missing the best 25 days out of that 30-year period would have chopped an investor’s return in half—to just 4.9%.

CATHIE WOOD’S ARK Innovation ETF was the toast of the investing town in 2020 and early 2021. The star portfolio manager picked one winning stock after another—stocks that benefited as much of the world shifted to work-from-anywhere.
Like so many other hot funds, her time in the sun didn’t last. After Wood’s flagship ARK fund returned more than 150% in 2020, plus another 25% to start 2021, the bubble finally popped last February. The peak-to-trough decline was 57.6% through Jan.

I RECENTLY RETIRED and have a lump sum from my former employer to invest. For months now, I’ve presumed that I would just add it to our existing investments in the same proportions, easy-peasy. In practice, however, one consideration has led to another, so I’ve made no firm decisions.
Within our 70% stock-30% bond portfolio, I’ve long had a soft rule of keeping well over a third of our stocks in broad market index funds.

LET’S SAY YOU BOUGHT a few stocks on the advice of your financial advisor for $300,000. One year later, that same advisor says you’ve done really well on the stocks—which are now worth $400,000—and you should sell. After the sale, you net a $100,000 profit. Would you be willing to pay your advisor a 6% fee on the $400,000, equal to $24,000, for the advice he gave you?
If so, I’d think you were crazy.

I’D LIKE TO START with a seemingly simple question: If you purchased an investment for $19,000 and later sold it for $287,000, would there be a gain or a loss? If you answered that there would be a gain, I’d agree with you. Specifically, it appears the gain would be $268,000. But what if there was no gain and the investment was actually sold at a loss? Could that be the case?