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If you are going to invest in the Bond market whether through funds or indiviudal Bonds you need to read this book. Whatever you want to know about Bonds and then some is in this book.
I thought bonds would be a way to diminsh risk in my portfolio. The average stock broker knows nothing about bonds and will likely give us bad advice. Richelson manages money for the rich, but gives us a strategy of getting into bonds. He leads you to the safe bonds.
This book has alot experience behind it. The book lists great sites for investing in bonds and making sure that you are buying at a competative prices. (I like using Vangard brokerage- you can see the various bond issues that are being offered) The main weakness of the book is how to divide your portfolio into corporate bonds, munis, TIPS, CD's etc. Richelsons did a tremendous job of demystifying an important part of portfolio that is deliberately ignored by brokers. He does give strategies during high inflation or deflationary situations. The book makes a case for an all bond portfolio.
See investinginbonds.com- a great nonprofit site listing the current market in bonds. this is a must read. I think richelson is very conservative. There are serious pitfalls out there.
It is totally readable, with clear explanations of how bond markets operate, concise descriptions of different bonds and the relative merits of each bond for your objectives. Today's markets reinforce their position, but the book is worthwhile at any time, under any market conditions. Read it cover-to-cover, then keep it handy as a reference on every bond you are likely to encounter--or for those moments when you just can't remember how TIPS adjust for inflation. If you expect to earn most of your retirement funds from your work rather than from investing in the stock market, Bonds--The Unbeaten Path to Secure Investment Growth, is for you. Hildy and Stan Richelson have told clients for years that they will earn more from a portfolio of bonds rated A or higher than from equities.
Finally, I found some of the information in the book in need of updating (e.g., the ratings of municipal bond insurers and a discussion of their real significance now for bond investors). Considering the record of bonds versus stocks over the past decade, the markets certainly have confirmed the authors' thesis.Another big take-away message is that a person can learn to assemble and manage his/her own bond portfolio; it don't have to require professional help. And the book does not make a big enough issue of how investing in TIPS entails reinvestment risk, unlike zero-coupon bonds. as alternatives to stock and bond funds; this would have saved people lots of pain in the current market turmoil.
As a seasoned bond investor who has successfully followed many of the principles outlined in this book, I found the book to make a powerful case for avoiding the pitfalls of stock market investing altogether. Overall, this is an incredibly resourceful book once readers can let go of the myth that stocks are the only way to build wealth or to deal with inflation. It would have also been helpful for the book to pay more attention to profiting from positive-sloping yield curves by 'riding down' the short end of the yield curve (e.g., selling Treasury bonds fairly close to their maturity dates, once their yields have dropped, and replacing them with higher-yielding longer-term issues); this is a common strategy used by professionals. The first few chapters, especially, highlight how investors have been lulled into expecting unrealistic long-term stock market returns and how adhering to market myths (e.g., stock market risk decreases over time) can lead to disasterous results, or at least loss of peace of mind.
I would have also liked them to make their case better for investing in TIPS; after all, TIPS are essentially a bet against the Federal Reserve's ability to control inflation rates over at least several years. In a sense, to follow the all-bond approach that the Richelsons suggest requires a strong sense of independence, an ability to see past conventional wisdom, and an ability to ignore much of the promotional chatter that lures people into stock investing. Despite what the financial press would have us believe about the imperatives of stock market investing, the Richelsons successfully refute that supposed requirement for achieving investing 'success.'One of the big take-away messages from this book is that bond investing is not as exciting nor potentially quite as profitable as stock market investing, but the results can be much more predictable and investment losses can be minimized or virtually eliminated when very high quality bonds are held to maturity. The Richelsons do a great job pointing out that investing in bond funds is not the same as buy-and-hold bond investing; the financial industry does a good job of confusing people about this -- to their advantage.I would have liked the book to give more treatment to the valuable role of stable value funds for 401(k)'s, 403(b)'s, etc.
With a nice bond portfolio, you can take the interest payments and reinvest those into stocks, real estate or whatever else you want. By laddering, if inflation goes up, you will invest future redemptions at higher rates. TIPS or I-Bonds can give you inflation protection as well. I wonder what Mr. This is a great book. Bonds can be exciting, if you trade them and dabble in 'at risk' or junk bonds, however, most people buy bonds for steady income and principal preservation. Sczech thinks now. Inflation can hurt you, but so can the market (see last 12 months).
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