Bonds

  • 26 Apr
    Here’s How A Defensive Investor Should Think About Stocks

    Here’s How A Defensive Investor Should Think About Stocks

    We all like common stocks, but in this stage of the economic cycle we should also be defensive. Therefore, it’s a perfect time to discuss Chapter 5 of Benjamin Graham’s book The Intelligent Investor – The Defensive Investor and Common Stocks.



    The topics we’ll discuss today are:

    • Four rules to follow when buying stocks.
    • Growth stocks.
    • Dollar cost averaging.
    • Investor’s personal situation.

    More →

  • 16 Apr
    Have Everything In Stocks Now? Here’s Why You’ll Want To Rethink That

    Have Everything In Stocks Now? Here’s Why You’ll Want To Rethink That

    • As crazy as it sounds, one shouldn’t have everything in stocks.
    • Perhaps the best counter option right now is short term bonds.
    • We’ll discuss Graham’s take and apply a contemporary perspective on it.



    Introduction

    Today, we’re going to continue our review of Benjamin Graham’s The Intelligent Investor with a discussion on the fourth chapter, General Portfolio Policy: The Defensive Investor.

    Graham clearly differentiates between aggressive and defensive investors where an aggressive investor spends a lot of time on research while a defensive one enjoys life. No matter whether you’re aggressive or defensive, this chapter is crucial for this environment as being defensive might be the most aggressive thing one can do. More →

  • 29 Jan
    At Davos, Dalio’s Message Tells You Everything You Need To Know

    At Davos, Dalio’s Message Tells You Everything You Need To Know

    • Dalio didn’t say that cash is trash or that it is stupid to hold cash.
    • I’ll explain in more detail what Dalio said.
    • Is the biggest risk nobody is seeing—with the exception of Dalio—political in nature?



    Introduction

    I love Davos because there is always a Bloomberg interview with beautiful mountain scenery and a freezing Ray Dalio.

    Perhaps because of the cold, Dalio always wants to keep the interview as short as possible and spits out all his thoughts on the economy, markets, etc. Some of it will be misinterpreted by the market, but the key message is always extremely important to hear. More →

  • 15 Jan
    The “Sleep Well At Night” Investing Strategy

    The “Sleep Well At Night” Investing Strategy

    • Investing is personal and should be more about sleeping well at night than returns.
    • I hope you sleep well at night because you are well prepared for what might happen and not because you don’t know the risks.
    • Unfortunately, sleeping well will always come at a short term cost but I think it’s well worth it.



    Introduction

    Two and a half years ago, I took out a mortgage with a fixed interest rate (3.55%) even though my friend from the Dutch National Bank was telling me to take the lower variable interest rate (2.5%) because the probability that interest rates would rise was very small and I could always change the variable rate to a fixed rate if necessary. More →

  • 10 Jan
    Why The Current Financial Environment Is Crazy

    Why The Current Financial Environment Is Crazy

    • It has never before been so easy to get money. The consequence is bubbles.
    • Some bubbles are innocuous and even funny, other bubbles are extremely dangerous.
    • The most important thing is to know how to behave in this environment, and we’ll discuss that today.



    Introduction

    Financial bubbles are always repeating. Sometimes they are small, just like the meal delivery businesses (like Blue Apron) craze of the last two years. Sometimes they are a bit bigger, like cryptocurrencies have been lately. Sometimes they are huge, just like the current stock or debt markets. More →

  • 08 Nov
    Is Everything Now Too Big To Fail?

    Is Everything Now Too Big To Fail?

    • Today, we’ll discuss how the “too big to fail” concept has evolved since it was first used back in 1984.
    • The U.S. stock market to pension funds relation shows that even the stock market is simply too big to fail.
    • In Europe, the situation is even worse. Everything there is too big to fail, from countries to corporations to junk bonds.



    Introduction

    “Too big to fail” is a concept that you probably recognize from the 2009 financial crisis when many corporations, particularly financial institutions, were considered too big to fail due to the negative impact their demise would have on the whole economic system.

    In order to prevent massive negative effects on the economy, and also to prevent a 1930s depression-style situation, governments intervened and bailed out the distressed assets. More →

  • 23 Oct
    This Is How You Get Returns Over 1,000%

    This Is How You Get Returns Over 1,000%

    • There are many examples of simple investments that returned more than 1,000%, some even 10,000%, over the last few decades.
    • In order to take advantage of such investments, you have to look at the extremes of what could happen in the next few years that aren’t included in the current economic models that use statistical averages.
    • Statistical averages are what you have to look for to protect you from negative surprises and open your portfolio to extremely positive surprises.



    Introduction

    A friend of mine just sold his home in Central London for 2.4 million pounds which is an average price in London. However, what’s interesting is that he bought the property in 1996 for just 160,000 pounds. In just 20 years, the value of his London property increased 15 times.

    Another example I have is from a recent WSJ article where a Park Avenue penthouse is selling for about $18 million. The funny thing is that the property was empty for 27 years as it was owned by the Former Republic of Yugoslavia which also allows us to know what the purchase price was in 1975. The purchase price was $100,000. In 40 years, the value of this property in New York increased 180 times. More →

  • 19 Oct
    What Should You Know About Investing In Bonds? Run Like Hell.

    What Should You Know About Investing In Bonds? Run Like Hell.

    • The recommended portfolio split is still 60% stocks and 40% bonds, which is a terrible split if you ask me.
    • I’ll show you the current risk reward bonds have and what you can expect from them in the future (treasuries and junk bonds).
    • There are two situations with owning bonds that aren’t such a bad idea.



    The Current Bond Environment

    Bonds, as stocks, have been in a bull market for the last 35 years because interest rates have been on a constant decline.

    Since 1981, a 10-year Treasury bond portfolio has returned 14.6 times its initial capital. More →

    By Sven Carlin Bonds Investiv Daily
  • 26 Sep
    The Best Strategies For Investing Late In The Economic Cycle

    The Best Strategies For Investing Late In The Economic Cycle

    • What has to be done in the late part of the economic cycle isn’t a secret. I’ll describe the how and what.
    • However, as always in investing, the question is why we aren’t doing the rational thing.
    • I’ll ask you a question that will help you answer how much and whether you should rebalance.

    Introduction

    Yesterday, we discussed how the economy is in the late part of the economic cycle and everything is leading toward a recession.

    No one knows exactly when the next recession will start or what the trigger will be. So the only thing to do is to be prepared. More →

  • 08 Sep
    Why You Should Be Paying Attention To Bond Yields

    Why You Should Be Paying Attention To Bond Yields

    • It’s extremely important to watch bond yields as they define the health of the economy and financial markets.
    • I was correct last year when I said to short bonds, but now things are changing and shorting bonds is no longer a low risk thing to do.
    • I’ll discuss what to look for to protect your portfolio from what bond yields are saying.

    Introduction

    Last year, I was a bond bear and wrote about how investors should avoid bonds, especially as the FED was announcing a tightening policy. I was right on with my forecasts as bond yields have almost doubled since June 2016 which lowered bond values. More →

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