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A CNNMoney analysis of new Census Bureau data shows that if you strip out the effects of the housing collapse, median household net worth still fell by 25% between 2005 and 2010. The decline was driven largely by the plummeting stock market, which devastated Americans' portfolios and retirement accounts. Overall, median household net worth declined 35% to $66,740 in 2010.

Let’s assume their data is correct. Of that $67k, how much would be available for investing? The household needs an emergency fund, and $17k ought to handle most emergencies, leaving $50k to invest. Let’s assume the household does Ben Graham’s 50/50 split of stocks to bonds (+/- 25%, as conditions warrant). At this late date in the bond-market cycle, could anything meaningful be achieved with tiny money like that?

I hate to tell you this, but there’s still a ton of opportunities that will offer a real rate of return. They aren’t obvious or safe. In other words, they do not fall into Ben Grahams' category of 'defensive investing'. But on a risk-adjusted basis (i.e., accepting no more than equity-like risk), an odd-lotter could still do quite well for her or himself in corporates or munis.

Risks would have to aggressively managed. (Betting the money on the equivalent “Red One”, i.e., the bonds of issuers with weak financials and outlier high yields, wouldn’t be smart.) But if the buying were done shrewdly in accordance with classic, value-investing principals, and if the holdings were diversified widely by issuer and industry, my bet is that acceptable money could be achieved by anyone willing to do the work that proper due-diligence requires, namely, the three simple and easy steps of Inspect, and then accept or reject, and move on.

In short, the task isn't to be right, but to make money. It's the process that matters, not individual results. You've gotta accept the fact that mistakes are going to get made. Positions have to be sized so that no single one, and no group of them, will ever get you thrown out of the game. With just $25,0o0 to work with, at least 30 different bonds could be bought. Even if some of them had to be bought at a premium to par, there are ways to get more favorable entries, not the least of which is patience and waiting for prices to come to you instead of chasing them.
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