Bonds should be the least amount of trouble in setting up or managing a portfolio. Here are some essentials to consider before setting your bond allocation. Ok, here we go with the basics for bond investment selection and management: Think About Your Allocation to Bonds Versus Stocks There is a big difference for a portfolio with 20% bonds versus one with 80%. If you have minimal bond exposure, … [Read more...]
12 Investing Concepts – Part 4
This is the fourth and final guest post by Nathan Bush on 12 investing concepts. CONCEPT EIGHT—FIXED INCOME (BONDS) Unlike stocks, which are ownership in a company, bonds are a debt obligation that is owed to you. You can expect a return of the principal as well as Interest on the principal. The word Bonds is used interchangeably with Fixed Income in lots of financial literature because it … [Read more...]
12 Investing Concepts – Part 3
This is the third of several guest posts by Nathan Bush on 12 investing concepts. CONCEPT SIX—FEES It does cost money to buy, sell, and hold securities. If you need advice, that cost also (one-time fee or ongoing percentage of assets under management). The construction of indexes and funds cost money. There are sales commissions. It is your money but everybody wants some of it, and do … [Read more...]
12 Investing Concepts – Part 2
This is the second of several guest posts by Nathan Bush on 12 investing concepts. CONCEPT THREE—EMERGENCY FUND Everybody should have one. This eliminates the necessity of pulling money out of your retirement investment accounts when the stock market may be depressed or in a taxable situation. Size of the emergency fund is debatable. Some say three months; others say up to two years of living … [Read more...]
12 Investing Concepts – Part 1
This is the first of several guest posts by Nathan Bush on 12 investing concepts. CONCEPT ONE—RISK-ASSET ALLOCATION (A/A) An investment in stocks is a risky venture. One would hope for high return but it does not always work out that way. Stock values can (and often do) go down; they are volatile. Historically, they go up more often than they go down but sometime they can stay depressed for … [Read more...]
Clearing Up Four Investing Misconceptions
Warren Buffet says "Investing is simple but it is not easy." There are a lot of misconceptions about investing. Let's look at four big ones. Misconception #1 - Studying the financial statements of individual stocks and learning the techniques of how traders execute will improve my investment returns. This is a surprisingly common idea, that if we just learn enough that we can do better. I … [Read more...]