A key conundrum for investors is as follows: On the one hand, the data on tactical trading is clear. It tells us that making frequent changes to a portfolio is a bad idea and can damage returns. But on the other hand, we shouldn’t be so wedded to the status quo that we’re unwilling to ever make a [...]
The long and the short of it
Back in the 1980s, Michael Milken earned celebrity as “the junk bond king.” With his swagger—and his toupee—Milken was an outsized personality in a normally staid industry. But that was 40 years ago, and that may have been the last time that bonds were truly interesting. On most days, bonds are [...]
Suddenly more interesting
In a typical year, the bond market doesn’t attract much interest. That is by design. The role of bonds in a portfolio is to serve as a bulwark against the unpredictability of stocks. They’re supposed to be boring. All that changed this year. Owing to rising interest rates, the most common total [...]
A buyer’s guide to bonds
At the mutual fund company where I once worked, the stock and bond teams liked to poke fun at one another. Bond managers viewed the stock-pickers as overpaid storytellers. Meanwhile, the stock-pickers saw the world of bonds as stultifying. “Playing for nickels and dimes” is how one of them put [...]
Five numbers to beware of
Last week, I described investing as a task that can be maddening. It’s not just investing, though. Many other questions in personal finance can also drive us crazy. Why is that? One reason is that often the stakes are high. Mistakes can be costly. A second reason is that all data, by definition, [...]
