We pick the mix of investments that maximizes the expected returns while not exceeding a fixed maximum risk. In the past month, we have continued to make money in bonds and the money market.

In the last newsletter, I wrote that I still did not believe that stocks were in a true rally. This was at a time when stocks were really booming. (They’ve come down a little since then.) I’ve received a few emails about this. Someone asked me what a “true rally” was. Stocks had made a lot of money, and that was that. How could a rally be true or false?

A true rally means that I am fairly confident that after I move my money into a fund, the price of that fund will continue to increase. The relevant question is not whether stocks have made money, but what is the optimal investment decision at this point? I am still not confident that the stock rally will continue, and so I am still not advising moving money into stocks.

On the other hand, it’s very clear that bonds are continuing to earn money. The trend is so clear, that I am advising going all in the F Fund (“Total Bond”), even in our Conservative allocation.

Related posts:

1. Still not time for stocks
2. Bonds strengthen, stock “rally” not proven
3. Bonds slightly weaker
4. Stocks still in a definite downtrend
5. Both bonds and stocks too risky

One Response to “Bonds continuing to earn money”

1. pingback from “Wise investing during interesting and trying times” | Peaceful Gains Newsletters
   June 1st, 2009 at 7:52 pm

   [...] agreed on the F fund move last time. Will spread the word. Take [...]

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