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Passing Shots

The Fifth Set Blog

Topics: Asset Allocation, Bonds, Efficient Market Hypothesis, Evidence-Based Investing, Fiduciary, Fixed Income, Index Investing, Investor Behavior, Long-term investing, Portfolio Management, Uncategorized

What is Wrong with Selling Now and Getting Back in When Things are Calmer: Nothing! But Not for the Reason You Think.

Why not sell out and get back in when things are calmer?  That is the question many investors are asking as the Coronavirus-provoked market volatility continues.  At first glance, it may seem obvious why that is a bad idea.  The wisdom of holding on and  …read more »

Buy Low and Sell High: Simple but Not Easy

Buy low, sell high…maybe the most obvious axiom in investing.  It seems so obvious, yet in practice, most investors have difficulty buying the worst-performing assets or selling the best-performing assets.  “Wait…you want to sell this thing that’s been going straight up so we can buy  …read more »

Why an Allocation to Bonds Always Makes Sense

A decline in stock prices during a bout of market volatility often elicits the comment that “this is a buying opportunity because markets always bounce back”.  From a historical perspective, that’s generally been true but is it possible for a stock drop to be something  …read more »

The Key to Successful Investing

Responding to an email, I came up with this and thought it was worth sharing… The fundamental problem with bond guys is they are programmed to focus on what could go wrong.  Equity guys are programmed to ignore everything that could go wrong.  Strategic asset  …read more »

How Difficult is it to be a Superstar Bond Fund Manager?

A recent Wall Street Journal article, “New Fund Stars Ride Junk Bonds to the Top”, profiles several bond funds which have drawn in large sums of investor assets since the financial crisis, in part, by delivering higher than expected returns from safe fixed income investments.  …read more »

Broker Conflicts of Interest and Municipal Bond Investments

Is it a coincidence that seemingly every prospective client’s taxable account currently managed by a brokerage firm includes the same two security types; expensive actively-managed equity mutual funds and individual municipal bonds? Viewed through the lens of massive conflicts of interest, it’s easy to see  …read more »

Why Your Bond Allocation Matters

On May 2nd, 2013, the yield on the 10 year Treasury bond closed at 1.63%.  By June 4th, the yield had risen to 2.14%, a 31% increase in rates over a little more than a month.  Basic bond math shows that as yields rise, bond  …read more »