• Investors are making bad investment decisions

  • Theory: bonds are less risky than stock

    • in theory the bond owners get paid before the stock owners if the company goes out of business

  • Many investors focus on ROR but they really should be focusing on how well does my portfolio perform against inflation

  • Teeter totter affect

    • time value of money

    • the bond will go back down to value as the maturity gets closer

    • as interest rates go down value of bonds go up

  • "I thought our money was safe in bonds"

    • were in a spot where interest rates were going up

  • Historical returns of bonds have been horrible

  • Risks people don’t understand when it comes to bonds:

  • After every correction we've had, the market has gone higher

  • The biggest risk to investors is themselves

November 6, 2019