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Portfolio Allocation and Bonds in a Low-Yield World

August 30, 2017

The investment firm AQR recently produced a paper discussing how to allocate portfolios in a world of zero interest rates. In particular, they asked whether bonds have a role in a portfolio when interest rates are near zero. Their answer is bonds do have a role, but it is a narrower one than in the […]

Re-Evaluating the Traditional Investment Portfolio

June 15, 2016

I’ve long argued that buy-and-hold investors should avoid the traditional portfolio, which is 60% stocks and 40% bonds. Here’s an article making the same argument but using different reasoning. He says investors can’t expect anything like the returns the traditional portfolio’s delivered over the last 30 years. They need to look elsewhere for decent returns. […]

More on the Global Asset Portfolio

December 8, 2014

Last Friday I linked to an article from Cullen Roche arguing that investors shouldn’t be focused on the S&P 500 as a benchmark. Instead, they should focus on the global financial portfolio of assets. Now here’s someone else arguing much in the same vein. The Philosophical Economics blog takes a look at all the media […]

Investing’s Free Lunch – Investment Portfolio Rebalancing

May 2, 2014

Rebalancing an investment portfolio increases long-term returns while reducing risk. It’s sometimes called Investing’s Free Lunch. You get something positive in return for doing almost nothing. Recently a study was published disagreeing with that. Or it seemed to. But on complete examination, it really doesn’t. You see, rebalancing doesn’t produce an automatic positive result each […]

The Desert Island Investment Portfolio

October 28, 2013

Most investors trade too often. One reason they don’t buy and hold is that their portfolios aren’t properly diversified. Another reason is that they pay too much attention to the headlines and short-term trends instead of putting those aside and focusing on the longer term. Here’s a good discussion of that process, including research indicating […]

End of the Traditional Balanced Portfolio

April 25, 2013

Longtime readers know I’ve never been a fan of the traditional balanced portfolio, which generally is 60% stocks, 40% bonds. People have some variations, but there isn’t much practical difference. Among the problems with the traditional portfolio is that it really isn’t diversified. About 90% of the portfolio’s risk, volatility, and returns are tied to […]

Most People Too Passive with Portfolios

January 6, 2012

People adopted a number of bad investment practices in the 1990s, and they continue to follow them. One simple strategy that will boost returns is to rebalance a portfolio periodically. Sell what’s done well and buy more of what’s declined until your portfolio is back to your planned allocation. That’s a way to sell high […]


How to Make Your Portfolio Last Forever

May 1, 2006

Managing your assets as you roll into retirement is a lot different than it used to be. Or at least it should be. The days of rolling all your assets into bonds or CDs are over. Traditional retirement or financial plans make a number of simple assumptions. At retirement, the plans assume the retiree will […]

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