When the market is going gangbusters — as it has been for the last five years or so — we tend to forget some of the most basic rules of portfolio construction and personal finance. Basic concepts (the kind that save our butts and boost returns) tend to get chucked out of the window when the stock market is surging. Things like diversification, proper asset allocation and understanding your risk profile etc. are often forgotten as we load up on rising biotech and momentum shares. A big one we forget: stocks aren’t bond substitutes. Here’s Russ Koesterich at the BlackRock Blog explaining why we’d do well to remember that.
Patrick O’Shaughnessy’s Tumblr (Patrick O’Shaughnessy): Global is the new core. Home town bias is killing your portfolio.
The Irrelevant Investor (Michael Batnick): Have an investing plan as well.
The Australian (Don Stammer): And don’t forget to allocate all your holdings accordingly.
Bloomberg (Eric Balchunas): If you’re into momo stocks, the airlines are killing it. Unfortunately, there’s no broad way to play them.
The New York Times’ Upshot (Justin Wolfers): Sorry Fed haters — stimulus worked to boost the economy.
Beyondbrics (Alan Beattie): What happens when Argentina defaults … because they definitely will.
TechCrunch (John Biggs): Vegas gets Bitcoin fever and an ATM! Put it all on black.