A practical how-to guide for every investor. For ordinary investors who want to build an all-weather portfolio. It is time-proven wisdom, and encourages you to take control of your finances. Learn how to use CDs, bonds, and bond funds to manage risk/reward even during low interest rates. You will learn: How to choose your stocks/bonds allocation How to become immune to changing interest rates When to use CDs and individual bonds How to choose a good bond fund How to hedge against unexpected inflation Contents: Foreword by Larry Swedroe
Introduction
- Who Should Read This Book?
- Start with a Sound Financial Lifestyle
Why Bother With Bonds?
- Stocks are risky in the short-run, and the long run too!
- Bonds Make Risk More Palatable
- Bonds Can Be A Safe Bet
- Bonds Are An Attractive Investment Diversifier
Life Is Complicated. Bonds Are Not.
- What is a Money Market Fund?
- Are CDs Better Than Bonds?
- What Are Bonds?
- What is a Bond Ladder?
- Individual Bonds or a Bond Fund?
Bonds: Risks and Returns
- Yield, Price And Making Comparisons
- How To Compare Individual Bond Returns
- How to Compare Bond Fund Returns
- Total Return: To Measure And Compare Performance
- How To Reduce Risk From Interest Rates Changes
- Duration: The Point of Indifference to Interest Rates
- Duration: The Measure of Sensitivity to Interest Rates
- How To Reduce Risk From Unexpected Inflation
- Real versus Nominal Interest Rates
- Why Include TIPS In Your Portfolio?
- Credit Quality or Default Risk
Build The Bond Portion Of Your Portfolio
- Start With Your Goals.
- How Much Risk Is Right For You?
- Understand How Much Risk You're Taking
- Take Your Risk In Stock Market, Not Bond Market
- How Much in Bonds? How Much in Stocks?
- Your Needs Change Over Time
- The Importance of Low Cost
- How Much To Diversify Bonds?
- The Importance of Low Cost
- Five Low-Cost Strategies You Can Do Yourself
- Taxes Matter
- Example Portfolios (both good and bad)
Common Misconceptions Important to Correct
- Stocks Are Safer In The Long Run
- Holding a Bond (or CD) to Maturity Eliminates Risk
- Stocks Are Safer Than Bonds
- The Best Funds Have The Most Stars
- A One Percent Fee Is Small
- Rising Interest Rates are Bad for Bond Holders
- You Can't Beat the Market Using Index Funds
- Use Multiple Investment Com