The All-Bond Portfolio
When the market goes up, risk tolerance is infinite, but when it goes down, risk tolerance is often at zero.
—Harold R. Evensky, Chairman, Evensky & Katz
We believe that investing the bulk of your funds in high-quality bonds is the key to your financial success. This is a controversial position—especially among brokers. Many investors believe that all diversification, including risky assets, results in a reduction of their investment risk. Our concern is that, in the name of diversification, these individual investors place a substantial amount of their nest egg in risky investments that they may not understand and ultimately take on more risk than they can actually sustain. Individual forays into risky investments ...