Letters to the Editor
To the Editors:
I enjoyed the exchange between Rick Spillane and James Cloonan discussing the use of fixed-income investments in reducing portfolio risk [Letters to the Editor in the February 2007 AAII Journal]. Im skeptical of bonds, believing that the return penalty far exceeds the value of their perceived safety or diversification benefit. Im convinced that the enthusiasm of managers and advisors for bonds in a portfolio has more to do with protecting themselves from criticism than with maximizing return for their clients. Im quite pleased to see James Cloonans comments supporting the idea that a well-constructed portfolio can indeed be all-equity and still maintain a low-risk profile. Of course, if everyone shifts from bonds to equity, presumably returns on the former will climb at the expense of the latter.
...To continue reading this article you must be registered with AAII.
Gain exclusive access to this article and all of the member benefits and investment education AAII offers.
Already registered with AAII? Login to read the rest of this article.
Register for FREE
to read this article and receive access to future AAII.com articles.