The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  http://boards.fool.com/when-the-sand-hits-the-fan-diversification-as-30263649.aspx

Subject:  Re: Your Best Pal, Ben? Date:  9/14/2012  8:46 PM
Author:  howardgt Number:  34377 of 35346

When the sand hits the fan, diversification (as it's conventionally understood, i.e., spreading assets among things that have low correlations with each other) isn't going to offer protection

Charlie,

There are many ways to diversify that can offer protection if you want or need it... One way is to do it the way Taleb does it (many small highly leveraged bets).

I personally think that betting with the Fed (instead of against the Fed) will be much more rewarding in the next few years, and once you have made a good profit, then one can use the profit as insurance for whatever economic calamities one worries about.

I doubt anything worse than 2008/2009 is going to happen. As long as everyone worries about it, it ain’t going to happen! The really bad surprises occur “out of the blue” when nobody expects them (Black Swans).

On the bond topic, I’m still adding junk but it’s getting harder and harder and I’m taking greater risks for lower rewards (yields). I’m counting on Bennie & the Jets to keep the music playing!

Howard
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us