Quote Of The Week: “Don’t Bail On Bonds”

bailing boat vintage

Time to bail? On the contrary. Sticking to your stock/bond allocation will net you better long-term returns.

“Investors who are shying away from bonds because they fear rising rates and inflationary pressure should think twice before writing off bonds completely.

Those calling for higher rates have been wrong for more than six years.”

Robert P. Andres, managing partner of Andres Capital Management, Berwyn, Pennsylvania, “Why Investors Shouldn’t Fear Bonds,”  The Wall Street Journal, March 27, 2016

The Takeaway: Don’t forget that investors have a knack for following the herd. They tend to sell investments when they’re down (“selling low”) and buy them when they are up (“buying high”). That’s exactly what you don’t want to do. When it comes to interest rates and bonds, the so-called “smart money” has been wrong time after time, doing damage to portfolio returns and playing havoc with risk management. So don’t be too smart for your own good. Stick with your stock/bond allocation and ignore what you read in the media. Most of those people are financial entertainers, not investment advisors familiar with your situation.

 

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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