Moving Beyond Uncle

Pooled together from thousands of mortgages around the United States, these bonds are issued by agencies like the Federal National Mortgage Association (Fannie Mae) or the Government National Mortgage Association (Ginnie Mae). However, they are not backed by the U.S. Treasury, so they sell at higher yields to reflect their greater risk. Mortgage bonds generally underperform when interest rates fall and bomb when rates rise. (Over the long run, those swings tend to even out...

Two Acronyms To The Rescue

Fortunately, you can bolster your defenses against inflation by branching out beyond stocks. Since Graham last wrote, two inflation-fighters have become widely available to investors REITs. Real Estate Investment Trusts, or REITs (pronounced reets), are companies that own and collect rent from commercial and residential properties.10 Bundled into real-estate mutual funds, REITs do a decent job of combating inflation. The best choice is Vanguard REIT Index Fund other relatively low-cost choices...

Commentary On Chapter

I feel grateful to the Milesian wench who, seeing the philosopher Thales continually spending his time in contemplation of the heavenly vault and always keeping his eyes raised upward, put something in his way to make him stumble, to warn him that it would be time to amuse his thoughts with things in the clouds when he had seen to those at his feet. Indeed she gave him or her good counsel, to look rather to himself than to the sky. In the glory days of the late 1990s, many investors chose to go...

The First Shall Be Last

Why don't more winning funds stay winners The better a fund performs, the more obstacles its investors face Migrating managers. When a stock picker seems to have the Midas touch, everyone wants him-including rival fund companies. If you bought Transamerica Premier Equity Fund to cash in on the skills of Glen Bickerstaff, who gained 47.5 in 1997, you were quickly out of luck TCW snatched him away in mid-1998 to run its TCW Galileo Select Equities Fund, and the Transamerica fund lagged the market...