Reaching for Yield

Merriam-Webster defines chimera as “an unrealizable dream.” Such is the case for any bond that purports to offer safety, high yield and liquidity. Short-sighted yield chasing is the eternal chimera of higher yield without higher risk. Investors say they want safety and income; what they really want is all the income they can get and the illusion of safety. Reach for yield at your own peril.

Responding to a Recession

What tactical changes should you make to your portfolio in response to the prospect of a recession? None. No one can consistently predict the economy, nor can anyone consistently time the markets. Therefore, the only way to be sure of capturing all of equities’ permanent return is to ride out all of equities’ temporary volatility.

Radical Simplicity

Thanks to the virtues of equity index funds, which are broadly diversified, low-cost and tax-efficient, it only takes two funds to form a complete equity portfolio. Compounding over the long term takes care of the rest. That’s radical simplicity.