Although they may have a reputation for being the domain of stodgy, well-heeled investors browsing over their portfolios by the fireplace with a cigar in one hand and a fountain pen in the other, bonds have a place in everyone’s portfolio. In addition to allowing you to set aside “reserve” capital for emergencies or stock market crashes, intelligent bond selections can take advantage of changes in interest rates, the underlying issuer’s credit profile, and more.

50-Year Maturity Sovereign Bonds in Euros

The Folly of Investing in 50-and-100-Year Bonds

Benjamin Graham once wisely observed that more money has been lost by investors “reaching for yield” than stolen at the barrel-end of a gun.  During periods of anemic interest rates on fixed-income securities, bank deposits, and cash equivalents, a combination of impatience, action bias, and desperation causes savers to do what they would otherwise consider extraordinarily foolish.  

Kansas City Power and Light Bond for Bond Duration

Bond Duration and Your Bond Portfolio

Bond duration is one of the biggest and most important things to understand when managing a portfolio that includes bonds or other fixed income assets.  Managed well, bond duration can give the chance for huge capital gains profits.  Managed poorly, bond duration can wipe out a supposedly conservative bond portfolio in no time, leaving nothing…