What happens when you combine a six year bull market in stocks with low interest rates and a persistent view the Fed will raise rates soon? You get a lot of speculation that stocks and bonds might both fall in value. The big concern lately is how will investors react if stocks fall and see the bond portion of their portfolio fall too.
The idea that stocks and bonds act as a counterweight of sorts is the basis of diversification. Having that balance disappear, could cause investors to overreact and change their allocation to stem off further losses.
To that end I thought I’d dig into just how often stocks and bonds fall in the same year and what happened the rest of the time. Continue Reading…
It’s safe to say Buffett and Munger came through, as usual, with a wealth of information in this year’s Berkshire letter. Before I break down the letter into the many select quotes and lessons, there is a greater lesson throughout.
Dividend investing seemed to get more popular after the financial crisis. Not that investors didn’t want dividends before then, but a good crisis can make investors rethink and change their strategy. In hindsight, the trend toward dividends makes sense. But why?