What This Year Reminds Us About Fixed Income
This year has reminded us of the many important roles that fixed income can play in portfolios.
This year has reminded us of the many important roles that fixed income can play in portfolios.
A common question among nonprofit associations is how much they should hold in reserve assets. There is a “rule of thumb” that associations should hold six months of operating expenses in reserve. Is this common rule of thumb common practice?
Right after, “What will the stock market do next?” the positioning question may be the most asked and re-asked question by investors of all types.
Barbells work great at the gym because they put weight on a bar in such a way that it’s balanced, leaving room in the middle for someone to use it to workout. We often see portfolios that are designed like a barbell at the gym: lots of risk in one account and lots of cash or very short-term securities in another. In aggregate, it might produce some balance, but the reality is that it can create some real challenges.
Right after, “What will the stock market do next?” the positioning question may be the most asked and re-asked question by investors of all types.
Barbells work great at the gym because they put weight on a bar in such a way that it’s balanced, leaving room in the middle for someone to use it to workout. We often see portfolios that are designed like a barbell at the gym: lots of risk in one account and lots of cash or very short-term securities in another. In aggregate, it might produce some balance, but the reality is that it can create some real challenges.
When the going is good, we’re not all that concerned with asking or answering the question. It is when the going gets tough, like right now, that we find ourselves more interested in asking. So, “What should we do?”
We had completed our hike successfully, and the challenges made it more memorable and satisfying. The same is true for all of us as investors.