A Better Life, High Yield Bonds And Diversification

If you’d like a better life… and who wouldn’t, then this is the one practice you’ll want to add to it.

And the best part, it’s free, fast and simple.

The following link shows you how doing this one thing can change your brain [for the better] and greatly improve your mental health.

And Harvard has its opinion on this topic too, saying this may be one of the simplest ways to feel better, even when the market is falling (the “market is falling” is my editorialness to this research).

And… if you are one of those that just wants to know the listed reasons why this one behavior can help your life, here’s Forbes providing the top seven scientifically proven benefits.

Okay… now the markets.

High Yield Bonds might be telling the investment world there’s more downside to come.

Below is a price chart showing high yield bonds breaking down hard (unadjusted for dividends). The yellow section is simply showing a resistance zone that the price of high yield bonds couldn’t break below for two years (read: this was the floor in price).

But something has changed as of late.

Not only have high yield bond prices broken below that yellow resistance (the floor in price), but when the price attempted to break back above the resistance zone, it bounced off it and started falling even faster.  

What this could mean is the old floor in price has now become the new ceiling in price. Of course this is one piece of data in a sea of data, so if you do anything this year, build a great noise filter.

High Yield Bonds

Well, at least I’m diversified…

Right now, there are investors thinking they are safe (or at least safer) because they own a well diversified portfolio of stocks. Below is a price chart showing you the following:

  • US Stock Market (red line)
  • International Market ex-US (blue line)
  • European Market (green line)
  • Emerging Markets (magenta line)

Now… most financial advisers and money managers have their clients in a well diversified stock portfolio. And you know why? They don’t know any better.

Most financial advisers don’t even know best practices when it comes to creating long term stability in their client’s portfolios. And it’s because most have their “research department” making these decisions like it’s the 1980s or 1990s for them (and you).

SPY, VEU, FEZ, EEM

So with Thanksgiving happening in the US this week, I’d like to thank you for being in my world and reading my thoughts about the markets, human behavior and being a dad to an eleven and seven year old.

 

In Your Corner,

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RC Peck, CFP

P.S. My challenge to you. This video is not even four minutes long and what it asks of you will take maybe five to ten seconds. What do you think? Are you willing to take this challenge? Thank you for spending your most precious commodity in the world (your attention) on my weekly blog.

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