Investors are making bad investment decisions
Theory: bonds are less risky than stock
in theory the bond owners get paid before the stock owners if the company goes out of business
Many investors focus on ROR but they really should be focusing on how well does my portfolio perform against inflation
Teeter totter affect
time value of money
the bond will go back down to value as the maturity gets closer
as interest rates go down value of bonds go up
"I thought our money was safe in bonds"
were in a spot where interest rates were going up
Historical returns of bonds have been horrible
Risks people don’t understand when it comes to bonds:
After every correction we've had, the market has gone higher
The biggest risk to investors is themselves
November 6, 2019