I am not that old of a man; but I sometimes like to think that I'm younger than I really am. I reminisce back to when I first started on Wall Street. I was just 18 years old. I didn’t have a clue what was going on.

I had never had coffee before then, but my boss liked to have me drink the stuff so that I would be revved up and ready to go well before the market opened at 9:30 a.m. each day. When I opened those beautiful glass doors to see a portrait of Benedict Gruntal, who founded the firm that bore his name in 1913, it really made me feel like I was eight and not 18.

I would walk right into my boss’s office, and my boss (oh yeah, the guy who specialized in bonds) would tell me about the new something-or-other that he just bought, and I would listen with about 63 cents jingling in my pocket and would nod like I could relate to him.

That man really was risk-averse and he loved fixed income. Oh ... did I mention that he made a whole lot of money? I later learned, after going to work elsewhere, that he could have made a whole lot more. He could have made more if he had (Are you ready???) DONE SOMETHING ELSE OTHER THAN JUST BONDS!

I am sorry for screaming at you, but I guess recalling the years of abuse (that’s the way it was back then on Wall Street) that we took from our bosses got the better of me. I must say that no matter how I felt about the man, I did learn a lot. Especially, about those gosh darn bonds.

I want to tell you very clearly that you SHOULD NOT invest in only one class of assets. In other words, if you own only stocks, bonds, or options ALONE, you are making a big mistake. You should have your assets allocated into all of those categories. Generally speaking, a savvy investor knows that a complete investment pie has a slice for growth, income, and cash:

• The growth section may consist of stocks, mutual funds, variable annuities, and options.
• The income section will consist of different types of bonds and maybe a fixed annuity.
• The cash section will include cash and cash equivalents such as CDs, T-bills, and commercial paper.

Cash equivalents are investment instruments that are relatively easily converted back into cash. I want all of you to know, because I care about you, and don't want to see you make the mistake of putting all of your eggs in one basket. I know bonds very well, but I also know stocks and options and other types of investments. Do what I did and diversify your knowledge about investment products.

Just remember that whether or not someone makes money in the long term is determined by several factors: 92% is due to how their assets are allocated, 6% is due to their investment selection, and 2% is based on their market timing.

Interesting, huh?

Until the next time, my friends, when I will continue to supply you with honest information and ideas on stocks, options, and, oh yeah, bonds. My philosophy is simple, “If it makes dollars, then it makes sense,” and ALL types of investments have the potential to do that, especially in the right amounts.

Have a great week!