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Charles Patton  

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  • Avoid Fixed Income Risk In Your Retirement Portfolio [View article]
    Exactly right. The point of my article was that you can't look for similar returns in fixed income to happen again. The potential just isn't there.
    Jun 20, 2014. 10:31 AM | Likes Like |Link to Comment
  • Avoid Fixed Income Risk In Your Retirement Portfolio [View article]
    Well said! Good advice for all.
    Jun 19, 2014. 11:56 PM | Likes Like |Link to Comment
  • Avoid Fixed Income Risk In Your Retirement Portfolio [View article]
    That's an interesting point. Benjamin Graham died in 1976. It is possible that his advice is outdated given the vastly different level of federal reserve involvement in today's rates. He could not have foreseen this type of special situation. However, to your point, bond yields did get to very low (sub 2%) levels during his career. If he were alive today he might have the same opinion as back then.

    My thoughts center around the likely outcome that the unwinding of the fed's asset buying program will be a headwind to fixed income returns for the next several years.
    Jun 19, 2014. 11:55 PM | Likes Like |Link to Comment
  • Avoid Fixed Income Risk In Your Retirement Portfolio [View article]
    Hi varan,

    Options and futures are nothing more than tools for your investing toolbox. There is nothing inherently good or bad about them. These tools can be used in many different ways and strategies - from aggressive to defensive and everything in between. My article shows how they can be used to reduce risk in a stock portfolio. This is just one of several ways in which derivatives can be utilized. Any investor, retired or not, needs to have a good understanding of how these products work before using them. When needed, an outside adviser can help implement these strategies. Thanks for the comment.

    Charles Patton
    Jun 18, 2014. 03:36 PM | Likes Like |Link to Comment
  • In Search Of... Stocks With Attractive Absolute Value [View article]
    Nice article Eric. I would agree that low P/E stocks are scarce. However, this is partially due to a rotation out of growth into value. Growth is actually cheaper than value at the moment if you ask me.
    Jun 13, 2014. 03:08 AM | 1 Like Like |Link to Comment
  • 5 Tips For Managing Your Own Retirement Portfolio [View article]
    Gary747,

    Sounds Great! I'm glad you found an approach that works for you.

    There's no place where it is "written in stone" that you must have an allocation to bonds. What if long terms bonds yielded 0.0001% per year (just for fun). The point of #5 was, own bonds if the price is right - Don't blindly have an allocation without a perspective on the risk vs reward.
    Jun 8, 2014. 01:01 AM | 1 Like Like |Link to Comment
  • 5 Tips For Managing Your Own Retirement Portfolio [View article]
    You've reminded me of a very important point which I believe we have all ignored on this thread so far: Inflation.

    While inflation has been subdued over the last couple years, even modest GDP growth may lead to slightly higher level of inflation that will render REAL bond returns to be negligible.

    The ten year yield is about 2.6%:
    http://yhoo.it/1nRVj6N;range=1y

    The latest annual inflation rate for the United States is 2.0%:

    http://bit.ly/QtDuMF

    This does not leave much room for error when investing in long term bonds; given that the after inflation return is less than one percent.
    Jun 8, 2014. 12:42 AM | Likes Like |Link to Comment
  • 5 Tips For Managing Your Own Retirement Portfolio [View article]
    Me: "5. Limit exposure to bonds"

    You: "Charles I like many must disagree with regard to bonds."

    You: "By keeping it short and investment grade we mitigate default risk."

    Seems like you've done exactly what I've recommended - which is limiting risk. I think you've shown (rather well) how to own bonds in a low risk way. Nice Job!
    Jun 7, 2014. 03:25 PM | 2 Likes Like |Link to Comment
  • 5 Tips For Managing Your Own Retirement Portfolio [View article]
    Hi MEbunn,

    You make some good points in your (numerous) posts. My intent was not to propose that bonds are to be avoided in all situations. I am simply pointing out that, at today's prices, this probably isn't the best time in history to be long bonds. I would actually be giving very different advise if the ten year yield got back up to 3%. But for now, as we sit around 2.5%, I think bond prices move lower over the next 3 to 6 months.

    To your question, about what to do... It seems that you are mostly concerned about the risk of your stock position. One strategy that I use often is the covered call (an options hedging strategy). This dramatically reduces risk, and may actually increase your return:

    http://bit.ly/SgMZly

    Hope this helps!
    Jun 6, 2014. 02:33 PM | 2 Likes Like |Link to Comment
  • 5 Tips For Managing Your Own Retirement Portfolio [View article]
    Hi "be here now",

    Thanks for the comment. I like your analysis of the fixed income stream vs bond issue. You are very insightful.

    Charles Patton
    Jun 6, 2014. 02:04 PM | 2 Likes Like |Link to Comment
  • Kinder Morgan: Huge New $6.7 Million Insider Buy - And It's Not Kinder [View article]
    good article DAC!
    Jun 5, 2014. 12:56 AM | 4 Likes Like |Link to Comment
  • Calm Before The Storm [View article]
    Enjoyed the article. Small point of fact: It is not really a 7 year low. Back on March 11th of 2013, vix got as low as 11.05. so its more like a 14 month low. minor point really. great article otherwise. thanks for it!
    May 30, 2014. 01:21 AM | 3 Likes Like |Link to Comment
  • Trading Strategies To Protect Wealth In A Market Correction [View article]
    exactly right.
    May 28, 2014. 03:17 PM | Likes Like |Link to Comment
  • Trading Strategies To Protect Wealth In A Market Correction [View article]
    Have a look at the VIX futures curve. (Available for free on the CBOE website). This is what TVIX and the other vix etfs hold in their respective funds. I tend not to look at the ETF prices...rather I look at the futures prices themselves to decide when to buy and sell the ETFs. Hope that helps you in your research.
    May 28, 2014. 03:15 PM | Likes Like |Link to Comment
  • Trading Strategies To Protect Wealth In A Market Correction [View article]
    Its very risky to short VXX or similar products outright. These ETFs have the potential to double, triple, or more if volatility spikes. However, shorting these products does tend to produce profits over extended periods. There is actually extensive articles about shorting these products as well. I suggest keeping your position size small relative to other assets in your portfolio to limit risk in dollar terms.
    May 28, 2014. 03:12 PM | Likes Like |Link to Comment
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36 Comments
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