Bonds: The Unbeaten Path to Secure Investment Growth

PREFACE

In Bonds: The Unbeaten Path to Secure Investment Growth, we take the complex world of financial investing and simplify it for you. The ancient Greek poet Archilochus said, "The fox knows many things, but the hedgehog knows one big thing." Jim Collins, author of the best-selling Good to Great, believes that hedgehogs, such as Freud, Darwin, Einstein, and Adam Smith, made a powerful impact because "they took a complex world and simplified it."

Like the hedgehog, we know one big thing that seems to remain undiscovered by the financial establishment: bonds are a better investment than stocks for individual investors. Viewed through objective eyes, stocks historically didn't outperform bonds when an individual investor's taxes, transaction fees, and bad timing are taken into consideration. Moreover, when stocks and bonds are viewed on a risk-adjusted basis (meaning how much of your principal is at risk), the case is clear that for individual investors, bonds were historically a better investment than stocks.

If stocks haven't outperformed bonds in the past, what is the basis for the argument that they are likely to outperform bonds in the future? Should you bet your financial future on the hope that stocks will rack up superior returns and that you will be able to realize those returns? We take the contrarian view and believe it's past time to trash the myth of stocks' superior investment returns. We propose instead an all-bond portfolio as a sure-footed strategy that will ensure ...