Tag Archives | volatility


The Role of Bond Funds in a Portfolio

Bonds tend to have less risk than stocks, but at the cost of less return. However, a proper use of certain kinds of bonds may temper the risk of your overall portfolio using diversification. Most people concentrate on investments only from a focus on returns. Diversification is an important factor to consider too, and bonds […]

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Volatility — One of The Biggest Threats, Yet People Focus on Returns

Most investors focus their attention on investment returns. They understand there’s risk – but … what does risk mean? One meaning of risk is not having the money when it is needed. Another meaning is that the returns change – in others words, returns are variable or volatile. So how does volatility change your focus? First a discussion on volatility through the […]

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What returns give, volatility takes away.

Many people focus on just returns, thinking that the higher the return the better their results. The consequences of such a focus while saving money are not felt as much (buying low) as they are once retired (selling low) and trying to manage the pot of money to give income for the rest of one’s life. Let’s take […]

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Black Swan Portfolio Construction – is it possible?

Black Swan events are events that come as a surprise … like the surprise of seeing a black swan when most swans are white in color. How do you invest in Black Swan markets? Such events are “often inappropriately rationalized after the fact with the benefit of hindsight.” (Wikipedia). Most people then try to rationalize […]

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Time-weighted versus Dollar-weighted returns. Are they different?

Why do I bring this up? Because people often are trying to compare their dollar-weighted computation to what they see reported on statements, etc., and wonder why they have different numbers. Yes, time-weighted returns are different than dollar-weighted returns (sometimes called money returns). It is possible for someone to experience losing money compared to their total […]

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How do you picture retirement?

Most people mentally picture getting to, and then through, retirement as a straightforward and linear path. Of course, that is desirable. But is this a realistic expectation? Some advisers may suggest the top path is possible by emphasizing “safety first.” This comes from Social Security and/or a pension (if you have one like your grandparents had). […]

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When to adjust retirement income? Sooner? Or later?

Market cycles make predictions hard for those who like to make such predictions. I believe predictions are impossible, especially over the rest of your life when it comes to retirement. This doesn’t mean we all throw up our hands though. It means taking a measure of what is prudent based on facts as we know […]

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“Skittles” Charts examined further – what do they say?

Many readers have probably seen charts like the below, that show in many different ways, which asset class was the high return with rankings to the lowest returning asset class during any given year. What is hard to see in any of these charts, is the relative ranking of where those returns are one year […]

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Markets go Up and They go Down | 6 Principles to Cope

People worry when markets are near the top (“Is this a bubble?). People worry when markets are lower than they were (“Is this a crash?”). Here are some guidelines to keep you “on the road” even while the markets are twisting and turning – which they always will! 1) Revisit or develop your Investment Policy […]

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