Category Archives: Asset Allocation

The Art of Extracting Large Commissions From Investors

The dirty truth is that some investments in this life are sold, and not bought.  The prime reason for this is that many people are not willing to learn enough to save and invest on their own.  Instead, they rely on others to corral them and say, “You ought to be saving and investing.  Hey, […]

The Victors Write the History Books, Even in Finance

    “It ain’t what you don’t know that hurts you, it’s what you know that ain’t so.” (Attributed to Mark Twain, Will Rogers, Satchel Paige, Charles Farrar Browne, Josh Billings, and a number of others) A lot of what passes for investment knowledge is history-dependent, and may not serve us well in the future.  Further, a certain […]

On the Recent Anxiety in High Yield Bonds

Quoting the beginning of a recent article at Bloomberg.com: As junk bonds plunge in value, many investors are wondering why. There’s no obvious explanation for the 1.5 percent decline in U.S. high-yield securities in the past month, or the $9.9 billion of cash pulled from mutual funds that buy the debt. The most likely reason is that […]

Can the “Permanent Portfolio” Work Today?

Another letter from a reader: Dear Mr. Merkel: I just discovered your blog through Valuewalk, which I read most days. I haven’t read much yet on your blog, but from what I’ve seen, I really like your insights and comments. I’ve been thinking for a long time about the idea of a permanent portfolio concept, […]

Book Review: Reducing the Risk of Black Swans

This is a very short book. I read the whole thing in 40 minutes.  It has one main idea: what if you could create a less variable portfolio that returns as much as the traditional 60% S&P 500, 40% Barclays Aggregate blend?  Wouldn’t you want that? Most of us would want that.  I would want earning more […]

Asset Value Illusion

Are some Baby Boomers retiring because the current value of their assets is high?  This article from Bloomberg gives an ambivalent answer to the question.  Personally, I don’t know the answer to that question, but I can answer a related question: In the current market environment, where interest rates are low and stock valuations are high, should […]