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Investing

Why You Need To Be Careful With Bond Funds

Not all investors understand the inverse relationship that exits between bonds and interest rates; the fact is when interest rates rise, bond values go down.  To understand this concept let’s break this down to see how a bond works.  Bonds have a stated maturity and a stated interest rate that they declare when they are issued.  The most common types of bonds today are government and co...
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The Math of Gains and Losses

  Here’s an interesting part of investing that most investors get wrong. In fact, if most investors understood this they probably would fire their broker. It has to do with how much it takes in percentage terms for a portfolio to recoup losses after a market correction. So let’s look at this.  If you claim to be a conservative investor, and can handle a 10% loss, then I would agree ...
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The Case For Absolute Return Investing…

The case for absolute return investing is rooted in the following: ▪ People’s decisions to buy and sell move stock and bond prices. People might buy or sell in response to external events; however, it is an individual’s decision to buy/sell, and not the actual event, that contributes to the price of a security. ▪ We cannot know what will happen in the future; we cannot know the ...
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Relative VS. Absolute Return Investing

Relative return strategies measure performance relative to the movement of an unmanaged index of securities,  the S&P 500, the Russell 2000, etc... In the world of relative returns, you “succeed” if you meet or beat your benchmark index; you “fail” if you trail your benchmark index. The consequences of failure – i.e., being fired – are quite drastic. To avoid that fate, a relative return mana...
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