Good Financial Reads: Protecting your Portfolio

Are you afraid of the AI bubble? That it’s going to burst and devastate your investment portfolio?

Many clients are expressing this same concern. Here’s what they say (with some poetic license):

AI has dramatically driven up the stock price of all the big tech companies. But there’s no there there in those companies. At least, there’s not enough there there. It’s a bubble. At some point, people are going to realize that Nvidia isn’t worth infinity dollars, the bubble will burst, and all those big tech companies will lose a lot of value and any money I have invested in those companies will go <poof!>. And I will be sad. Very sad indeed.

I know market timing is bad, but still, should we be timing the market?

I can’t knowledgeably comment on all the potential damage caused by the proliferation of AI (though, Lord knows, the abuse of the em dash is damage enough!). But I can usefully comment on how to manage the risk of AI in your investment portfolio.

 

Individual Bonds vs Bond Funds: Which Is Better For Your Portfolio?

by Alvin Carlos, CFP®, CFA, District Capital Management

When investors think about adding stability and income to their portfolios, a common question arises: Should I buy individual bonds or invest in a bond fund?

At first glance, both options seem similar. Both involve bonds. Both can provide income. Both are often seen as “safer” than stocks. But when you look closer, the difference between bonds and bond funds is significant.

• Individual bonds mean direct ownership. You know the issuer, coupon, and maturity date. If you hold to maturity, you get your principal back (assuming no default).
• Bond funds mean pooled exposure. You own shares in a fund holding dozens – or even hundreds – of bonds. You don’t control individual maturities, but you gain instant diversification.

This article drills deeper into that key distinction: direct ownership vs pooled exposure. By the end, you’ll have a clear framework for comparing individual bonds vs bond funds so you can better understand how each works in a portfolio.