From: www.morningstar.com
Should you have short-term bonds in your portfolio? Yes. I’d argue that short-term bonds are one of the key asset classes that most investors should own, in addition to cash and large-cap stocks.
In this series on portfolio basics, I’ll explain some of the fundamentals of putting together sound portfolios. I’ll start with some of the most widely used types of investments…
From: www.investopedia.com
Investing attracts different kinds of investors for different reasons. The two major types of investors are the institutional investor and the retail investor.
An institutional investor is a company or organization with employees who invest on behalf of others (typically, other companies and organizations). The manner in which an institutional investor allocates capital that’s to be invested…
From: www.indeed.com
Institutional and retail investors have many similarities in their roles. Aside from those commonalities, there are numerous areas of distinction between them. If you’re interested in a career in finance, understanding the differences between institutional and retail investors can help you choose the right investing career for you. In this article, we define institutional and retail investors, examine the key differences between them…
From: linkedin.com
11.6% per year over the past 40 years — you’re free to have your own feelings about investing in the stock market, but you can’t have your own facts.
This 40 year period has included recessions, wars, Y2K, 9/11, the tech bubble, the real estate meltdown, political turmoil, etc.
When you stay scared and keep your money uninvested, you miss out on a…
U.S. large cap stocks, as measured by the S&P 500, delivered a solid performance in the first half of 2024. In January, the index eclipsed an all-time high, and in the five months that followed, it reached 31 more. Volatility has also been relatively subdued. In the first six months, there was only one instance when the index rose or fell by more than 2%…
From: Amundi Asset Management
Short-term bonds may dominate cash in the next phase of monetary policy
• With yields on cash currently elevated, we appreciate why cash allocations have swelled.
• However, as the US Federal Reserve considers pivoting its stance, so too should investors.
• Against the interest rate risk inherent in most fixed income securities, investors should consider the reinvestment risk inherent in cash.
• Shifting exposure from cash to short-term bonds…
From: www.morningstar.com
Investment caution can be dangerous, too.
In total, 169 mutual funds and exchange-traded funds registered in the US officially list a Treasury bill index as their prospectus benchmark. That selection is indefensible. Every investment has a higher expected return than Treasury bills because every investment is riskier. Thus, the test is rigged. (Insert election joke of your choice.)
Those 169 funds are a…
From: www.morningstar.com
Here’s how some key asset classes fare as portfolio diversifiers and what that means for building your portfolio.
Diversification is a core principle of sound investing. A portfolio that includes assets with different performance characteristics often leads to better risk-adjusted returns than one that relies on a single asset class. But building a diversified portfolio can be easier in theory…
Dustin Murdoff from Mundorf Wealth Management takes a deep dive with Mark DiOrio, Chief Investment Officer at Brookstone Capital Management, on what a Risk-Managed Investment Approach looks like. Here they discuss how Advanced Strategy Diversification is central to that approach.
From: www.morningstar.com
While bonds disappointed as diversifiers in 2022, they’ve historically performed well during economic downturns.
The Federal Reserve’s campaign to stamp out inflation by lifting interest rates caused pain for both stocks and bonds last year, prompting correlations between the two assets to increase sharply. But surging interest rates have given rise to another worry: Could the Fed overshoot on interest rates, pushing…
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