Re: How safe is the stock market?
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The whole point of fixed income, since the return absolutely sucks, is return OF principal, not return ON principal.
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No, the main point of having bonds in your portfolio is the low or negative correlation w/ stocks (aka diversification).
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Are you serious? What the hell then, just buy a box full of baseball cards.
If I'm going to invest (which I don't) I want some return. I don't want to sink money in something just because it's "not stocks". Besides, there are over 7,000 different stock. Since I've been trading in the 70's I've never seen them all move together.
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they may not all move together, but they have an extremely high correlation.
i've now posted the best portfolio i can construct and it can't hurt to go over it. it wouldn't be possible without bonds and commodities in addition to treasury inflation protected securities as well as emerging market debt funds.
just because you've never invested in bonds, doesn't mean nobody should. further, i bet your portfolio has had significantly larger historical volatility than what many investors would want. and i bet it swung viciously during various recessions/market turbulance/economic volatility.
Barron
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