A Risky Ride

I’m working from home today and was watching Power Lunch on CNBC while I ran on the treadmill.  They mentioned how the bond yield has come down recently.  It made me think about the post I wrote two and a half months ago, What is Risk Worth. My theory then and now is that it’s better to stay invested than worry about jumping into bonds for a “safe-haven” when yields turn north a little bit.

I checked my returns since that posting on 6.14.07 and see I’m down 1.57% (annualized).  More interesting is that before August I was up over 16% (annualized) from that same date.  That means I did the right thing to stay fully invested after the bond yields rose.  The losses I’ve taken in August are unrelated as the bond yields are now lower.  I’m staying invested and continuing to try to pick the right stocks, just as I’ve always attempted to do.

I laugh when I hear someone describe this as a stock-picker’s market.  Every market is.  An investor still needs to pick the best investments, even in a bull market.  Look at the difference between a lot of the tech companies versus the big pharma companies over the past year and you’ll see an investor better have been a “picker” of the better industry and individual stock within to have maximized gains.

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