Read(s) of the Day – Your Time, Bonds, and 10 Default Portfolio Settings

Here’s some of the best stuff I read over the weekend from all over the place:

“Given that equities have historically outperformed bonds, I wonder why anyone in their 20s or 30s would hold any bonds whatsoever?

Or am I missing something?”

You know your time is valuable, but how much is it really worth? As you fume about a delayed plane, a late doctor, a long line, is it possible to quantify—to put a concrete number on—the time being wasted? To say not just, “My time is valuable!” but “That’s $123 of my time down the drain!”

“I pay a lot of attention to the investment process.  In that regard, every investor — personal or professional — ought to have a clear investment plan based upon appropriate personal considerations, goals and outlooks and every investor ought to stick to that plan unless and until something significant changes. But there is a crucial component of the investment process that gets surprisingly little attention:  our investment default settings.  We can use them when we aren’t sure what to do, when we’re deciding what to do, when our circumstances have changed but our plan hasn’t (yet), or when we’re just starting out.”

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Boston Larry

    It argues for a “default” portfolio setting of 60% stock index and 40% aggregate bond index. “A simple portfolio invested 60 percent in the Standard & Poor’s 500-stock index and 40 percent in the Barclays Aggregate bond index would have gained 12.6 percent annually over the last three years and 2.8 percent over the last five years, compared with 10.2 percent and 1.1 percent, respectively, for the college endowments.” Since the majority of traders are not that good at it, ir seems most would be better off with a passive allocation of some sort. Unkess you are disciplined and follow a system that has an edge. Do many of those exist?