Why You Shouldn’t Substitute Stocks for Bonds

A friend sent me the following article from the USA Today insert of his local paper. The article proclaimed “The 60/40 stock-and-bond portfolio mix is dead in 2016” and went on to explain that with bond interest rates near historical lows, one should reach for higher returns by taking more risk with stocks. The article quoted one adviser who suggested investors in their 60s invest 70 to 80 percent of their portfolio in stocks. I couldn’t disagree more, and here …

Jack Bogle’s 5 Simple Rules for Investing in Stocks

Last week, 200 “Bogleheads” met for an annual gathering near Philadelphia, PA to hear the legendary founder of Vanguard, the world’s largest fund company, talk about investing. The Bogleheads is a not-for-profit organization in which anyone can post financial questions (at bogleheads.org) and then hundreds of volunteer members (Bogleheads) who are seasoned investors respond with advice — generally without a profit motive. To ask a question, you must join, but you can probably find the answer to your question by …

The Stock Market Plunge: What You Should Do, or Not Do

The headlines are brutal: Wall Street’s Rout Market Meltdown Global Financial Markets Going Crazy It’s enough to get anyone to panic and sell. And that, in my opinion, would be exactly the wrong thing to do. It’s not that I have a clue whether the current market plunge is a minor setback for stocks or the beginning of the third half-off sale this century. Rather, I know that it’s our fair weather human nature to embrace risk in boom markets …

Stocks for the Long Run? Really?

Most of us have heard that stocks have outperformed bonds in the long run. But what is the definition of long run? So far this century, have stocks really outperformed? To answer that question, I decided to look at how three different asset classes have performed in the new millennium. I examined the performance of stocks vs. bonds from Dec. 31, 1999 through June 30, 2015. I compared the total returns of U.S. stocks, international stocks and investment grade U.S. …

Gold Investing — Learning the Hard Way

Gold is now down 43 percent since its peak in 2011. If you think that’s bad, gold-mining stocks are down more than 70 percent in the past five years. As tends to happen, people have been dumping gold. Many owned gold in the form of an exchange traded fund (ETF) called SPDR Gold Shares (GLD), which was the largest ETF on the planet back in 2011. As also tends to happen, investors bought the fund as it went up only …

Investing — It’s OK to Have Some Fun

In a recent column I exposed my own portfolio and its daring dullness. It is that very dullness which, I believe, is the key to its success. Still, beneath this dull exterior beats the heart of “The Gambler.” Even yours truly gets the occasional urge to buy that risky stock, offering the possibility of a 1,000 percent return, and sometimes I just can’t resist acting on that thrill-seeking urge. That’s why I carve out a small piece of my portfolio …