Using Cash and Short-Term Bonds to Avoid Taking Losses
This week’s AAII Weekly Digest highlights these
“must-read” AAII articles:
One theory of valuation is that a stock is worth the cash distributable to shareholders. An advantage to methodologies based on this concept is that cash distributions are not influenced by accounting adjustments. Cash is either returned to shareholders or it’s not. Both dividends and stock buybacks can be used to assess a stock’s attractiveness; higher relative shareholder yields have historically led to better stock returns.
In a falling interest rate environment or in one where interest rates have fallen in the not-too-distant past, it is especially important for investors to understand bond calls if they own individual bonds, bond funds, annuities or life insurance.
Jane Bryant Quinn is a nationally known personal finance writer and commentator. Her latest book is “How to Make Your Money Last: The Indispensable Retirement Guide” (Simon & Schuster, 2016). In this conversation with AAII Journal editor Charles Rotblut, the two discuss why retirees should have the equivalent of up to five years of expenses allocated to cash and short-term bond funds.
The term “yield” is used often by the financial press and others. The trouble is that yield has many different meanings and implications for investors. This workshop will try to sort out some of the major differences. It will not, however, attempt to present mathematically all of the possible yield calculations created by institutions and financial instruments.
Our Member Question for this week is:
Have you made any changes to your portfolio in anticipation of an all-out trade war between the U.S. and China?
Vote to answer this week’s Special Question: What changes, if any, have you made to your investment portfolio or strategy in anticipation of the U.S.-China trade war?
Poll results are as of 9 a.m. (Central) on Monday. 2,000 respondents.
Alternative investments have been touted as a way for investors to diversify their portfolios and boost return. However, the track record of some alternative investments, such as hedge funds, contradicts this. We asked our readers how much of their portfolio is invested in alternative investments and the main reason for investing in or avoiding alternative investments.
Think of the bond market as a mystery wrapped in an enigma? You are not alone. But this AAII classroom—a member exclusive—pulls back the curtain so that you can analyze individual bonds with confidence.