Bonds: The Unbeaten Path to Secure Investment Growth

Chapter 3. ADOPTING THE ALL-BOND PORTFOLIO A Case Study

FOR MANY INVESTORS, the unfortunate outcome of following the accepted wisdom of having a diversified portfolio is to realize that they cannot be sure that their investment portfolio will adequately fund their financial objectives and life goals. In addition, they may not realize that they're taking on a great deal of additional risk. A client we'll call Peter is a typical example. He came to us well into his career but early enough for a change in his investments to make a difference.

A Poor-Fitting Portfolio

Peter is forty years old and in the prime of his life. He is married to Jane, and they have two beautiful children ages eight and ten. Jane looks after the children, and Peter works at Bigco, a major international consulting firm. Peter is well regarded at Bigco and was promoted to the position of senior consultant last year. Peter has worked his entire career at Bigco and is well compensated.

Peter and Jane live the American dream. They have a huge house, expensive German cars, a single-engine airplane, and a Harley motorcycle. But all is not well with Peter and Jane despite their lavish lifestyle. Although Peter's work is challenging and exciting, he has become a road warrior and is away from home all week. Peter's absence and out-of-town travel is having an adverse effect on him and on his relationship with Jane and his children. To save his marriage and his relationship with his children, Peter has decided that he must ...