Holding Your Bond Fund for the Duration
Bond index funds have a place in almost all portfolios, even in a low-rate environment. However, it’s important to match the right bond fund to your investment goals. To do that you need to know two i [...]
Will Rising Rates Really Clobber Bonds?
Investors are worrying about a lot of things these days, but the fear of rising interest rates remains near the top of the list. Not only are savings accounts and GICs yielding peanuts, but bond inves [...]
Fundamental Indexing for Corporate Bonds
On Monday, I took issue with the argument that cap-weighted bond indexes are fatally flawed. Rob Arnott, the creator of fundamental indexing, has argued that the classic model is “patently ridiculous. [...]
Are Bond Index Funds Stupid?
When Rob Arnott, the creator of fundamental indexing, spoke in Toronto last week, his presentation focused exclusively on equities. When he took questions at the end of his presentation, I asked him a [...]
How Often Should You Rebalance?
In my previous post, I looked at the reasons why investors should occasionally rebalance their portfolios. When a portfolio contains both fixed-income and equities, rebalancing is mostly about risk ma [...]
Why Rebalance Your Portfolio?
An important part of the indexing strategy is that you occasionally rebalance your portfolio back to its target asset allocation. I get a lot of questions about rebalancing, so I felt it was time to p [...]
Ready, Willing and Able to Take Risk
Asset allocation is more art than science. There are no immutable laws to tell you what proportion of stocks and bonds should be in your portfolio. The best you can do is adopt rules of thumb. “Make y [...]
Rick Ferri’s Take on Gold
I recently had the privilege of interviewing Rick Ferri, founder of Portfolio Solutions, an investment management firm in Troy, Michigan. Rick is the author of several excellent books on ETFs, index f [...]
The 50-Percent Solution
Investing can seem so complicated. Building a portfolio can involve dozens of decisions, each of which seems terribly important. Here are a few that readers have mulled over recently, according to ema [...]
Parking Cash in Your Portfolio
[Note: This post was updated in October 2020.] Many investors like to keep at least a small part of their portfolio in cash. If you want to keep this cash in your online brokerage account (alongside y [...]
