People often buy bonds to increase their returns. With so many bond-buying strategies available it’s critical for you to know what types of bonds you should buy.
When you should pay more for bonds
A premium bond costs more than its par (face) value, which means, for example, that you might pay $1100 for a bond that will only pay you back $1000 when it matures…. Read more
Many financial planners advise having a well-diversified portfolio, meaning that you should spread your assets between various types of investments rather than putting all of your eggs into one basket. The definition of “diversification” is important, since your portfolios may not be as diversified as you think.
Why diversify?
The purpose of diversification is to decrease the portfolio’s level of risk while still accruing a healthy return…. Read more
Are you careful or impulsive?
If you make a spur-of-the-moment decision instead of carefully planning your next move, you may end up someplace that you wish you weren’t. This is true in many aspects of life, including investing.
It’s easy to make a decision based on fear of losing money rather than looking at all the facts…. Read more
As a financial advisor handling U.S. brokerage accounts, I’m often asked the following question:
“I just received some cash that I’d like to use within the next 6 to 12 months. I’ve deposited it in the bank, but it’s barely earning interest. What should I do with this money?”
What are the options?… Read more
Some readers were surprised by my piece published in The Jerusalem Post and on Profile Perspectives called, “The Most Important Thing to Do Before You Retire.” In it, I argued that you should try to eliminate all debt, including mortgages, before quitting work.
One reader wrote: “Doug,… Read more
Some investors’ fear of losing money compels them to completely avoid the stock market and other volatile investments. This phenomenon is often called “loss aversion.”
People suffering from loss aversion will sometimes wait until they see the market has gone up a lot, and then they invest. They forget about history and just believe that the economy will continue strengthening…. Read more
Many readers have recently contacted me because they received a letter from their U.S. brokerage firm informing them that either “You can no longer purchase additional shares of mutual funds in your account,” or “We will no longer provide investment advisory services to you and/or you may only enter liquidating orders or non-solicited orders in your account.”
This letter is not a result of new American legislation;… Read more
When I started my career as a financial planner, my mother, who was also a licensed stock broker, gave me this important piece of advice: “Just listen to what the clients are saying and let them talk. Then, it will become obvious what investment is appropriate for them.”
The importance of listening to what others have to say is vital in so many fields and professions,… Read more
One of the easiest ways to diversify your portfolio is to invest in a mutual fund. A mutual fund is like a basket in which lots of investors place their money and then that single large account is managed by a team of professionals. There are mutual funds that specialize in stocks,… Read more
While it’s important to divide your assets between stocks and bonds, cash plays an important role in your asset allocation.
Cash as an investment vehicle is not the same as any cash in your emergency fund, which should be the equivalent of three to six months’ living expenses. Successful investment portfolios sometimes have a slice of their pie invested specifically in liquid (cash) investments…. Read more
