Bogleheads

[knarf]

I am much indebted to this trio and try to read everything they write.

I was quite interested to see on two issues of much contention between Swedroe and Ferri on this site, junk bonds and commodities futures, William Bernstein, in his new book "The Investor's Manifesto," takes Ferri's side.

After mentioning that commodities futures fell off the cliff in late 2008, he writes:

"Two things are wrong with this asset class. First, its future returns will likley to be low--certainly much lower than they have been in the past; commodites are what I call an 'asset class du jour,' on everyone's financial lips. This is a real warning sign, since when everyone owns something, few buyers may be left to push up the price. Second, I just do not trust any of the commodities funds, or the companies offering them. I will explain exactly why in chapter 5, which covers the brokerage and mutual fund industries."

Also, among his recommended funds is Vanguard's high yield corporate bond fund (VWEHX).

[TJAJ9]

I wouldn't recommend holding Vanguard High-Yield Corporate to anyone. There isn't any reason to take the added risk of "junk bonds." Take your added risk with your equities, not your bonds.

They are too volatile and their returns are poor for such a risky fund. They have under-performed most of Vanguard's other bond funds over the past 10 years.

[schwarm]

[AzRunner]

I don't understand commodities well enough to own them. What I have read leads me more to Rick Ferri's view that commodities are not like stocks, where there are businesses growing to back up the stock price.

Wrt high yield bonds, I don't own them since I do not have room in my tax deferred account for them. On this one I go with Larry Swedroe since it seems like you are taking equity risk mixed with your fixed income and you are going to place one or the other in the wrong place in your taxable or tax deferred account.

The great thing about Bogleheads is that you can have knowledgeable people debate the topics and then you can make your own decision.

Norm

[grok87]

[TJAJ9]

[bikeguyken]

I use the learnings from all three gentlemen. I use Vanguard's High Yield fund for 10% of fixed income (Ferri) but treat High Yield as 25/75% Equity/FI (Swedroe) and am somewhat of a Portfolio Junkie (Bernstein-Four Pillars) with ownership of about 12 different Vanguard funds which include my casino/sector funds of Precious Metals, Energy and Health. Like another gentleman on this forum has frequently said: "There are many roads to Dublin". Note that as a retiree approaching 70, we are conservatively invested at 28/72% Equity/FI based on need/willingness/ability to take risk (Swedroe).

Ken the Trek bikeguy

[grok87]

[gadfly888]

For years my investment knowledge regimen has been reading and
re-reading the collective books of Berrnstein, Swedroe, Ferrie, and
for an acute appreciation for the darkness of a black swan, Mr. Taleb.


Gad-

[Wabbit]

[Taylor Larimore]

Bogleheads:

This is what we wrote in our "Bogleheads Guide to Investing":