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Comes back to what we both have argued for years. Personality, combined with experience, is often more important than any pure system or methodology. That is not to say any method works, only that we are often best adapted to succeed using one method over another.


Jake Bernstein makes this argument, as does Van Tharp. "We don't trade markets. We trade our beliefs about those markets." Others might put it this way. "A trader doesn't trade a system. He is the system being traded. He trades himself." And there's another bon mot that needs to be added. "No man can trade another man's system."

The sum of those insights is that bond-investing cannot be taught. It has to be learned by doing. Some people never do catch on to even the basics. Others excel, seemingly without effort. So "native talent" matters, and, as you say, in time, each of us tends to gravitate toward where we are most comfortable in the investing world and toward what we can do best. Eleven years ago, nearly to the month, I stumbled into something that suits me to a "T". Out of sheer, dumb luck, it has also been one of the best places to be in terms of genuinely appreciating capital.(1) So, obviously, I'm happy. I've found a niche that offers better money than the average stock investor has obtained and with far less risk.



Take a look at their file on "Efficient Frontiers". For the years 1970-1979, a 100% allocation to bonds was maximally efficient in terms of both absolute and risk-adjusted returns. For the years 2001-2010, a 80%-20% weight of bonds to equity was maximally risk efficient, and a 100% weighting of bonds was maximal on an absolute-returns basis. In other decades, other weightings were what proved best. But I wasn't investing then, and "past performance....". So it's what I'm doing now that matters to me and what might lie ahead. Given boomer demographics, bond should continue to be profitable to those already in the game who play it well.
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