Bonds are DEAD money!‏

After you watch my video, please take a moment to read the background of its making right below.


I just spent the past 3 days traveling to and attending an investment conference in Denver focused on “Alternative Investments”. There were some 300+ participants who ranged from wirehouse stockbrokers, independent Registered Investment Advisors, portfolio managers, hedge fund and private placement managers, etc.

Alternative investments have a very broad definition, but most agree that they are “intended to protect capital in most economic conditions and market environments”. Many folks think of Hedge Funds (which are generally only available to the wealthy), long/short funds, private placements and limited partnerships, etc. 

However, there are even some mutual funds available to do much of the above for us “regular people”. But good ones (at least to buy and hold) are few and far between. 

Despite the US stock market continuing to remain in a range just below its all-time highs, I think the biggest discussion in the halls and in many sessions, was “what to do about the coming problem with fixed income (bonds)”. In fact, the latest edition of Barron’s magazine front cover and main article was entitled, “Trouble Ahead for Bond Funds”. The timing of it was perfect for the conference… and for my video too! 

Yes, not only are interest rates historically low, but principal is at risk when interest rates begin to rise. And of course you always have to worry about “credit risk” when the economy turns south and companies may not be able to pay their interest. 

So how can advisors give our clients reasonable returns that at least keep up with inflation? 

I would guess that only 5-10% of these folks were licensed insurance agents as well as whatever their “specialty” was. So not one person in the room that I spoke with anyway, had any idea of a simple, no-fee “bond alternative” with no market risk nor credit risk or potential loss of principal. And one, unlike bonds, one that can provide for a rising retirement income. 

Even before I went to the conference, I had written a video script and asked my production company to make it for you all. But after spending $1,500 on the conference registration and travel expenses, I’m more convinced than ever of the value this solution provides for many investors. 

I’ll keep going to the 4-6 conferences a year to keep up with what’s new and available for my clients, but for most of them, there wasn’t much that would be of interest at this one. None of those alternative investments had any guarantees at all. Sure they might have had more upside, but fixed income investors are more concerned with income and not losing money. 

About $1 BILLION a MONTH is being invested into this very traditional “alternative” that provides retirees and pre-retirees important benefits that I could not find at this conference. So as a fiduciary, I wanted to make sure that you were exposed to its existence. Maybe it’s right for part of your investments and maybe it isn’t. 

Enjoy the video and please let me know if you’d like to learn more about this safe bond alternative for the fixed income portion of your portfolio.

all the best… Mark

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