The Fed raised interest rates a quarter point last week, and this could really affect the bond market. What can you do to prepare yourself for higher rates?

“My broker says that if interest rates rise, I’d be better off owning individual bonds than bond funds because I can hold a bond to maturity,” an investor said recently.

But we believe that investors are far better off with bond funds than individual bonds, particularly if markets change, and here are three reasons why:

1. Diversity: Funds help you stay diversified and mitigate risk

With individual bonds, you’ll likely be able to only hold a handful at best, so your risk will be concentrated in just a few holdings. If any one of those companies defaults on its debt or goes bankrupt, you could be left with pennies on the dollar, or nothing at all. And if that unlucky bond were 10% or 20% of your fixed-income portfolio, it would really hurt.

Bond funds are far more diverse. Most funds own hundreds, if not thousands, of bonds, so if one bond defaults, the other positions can help offset losses.

Funds also have research teams devoted to evaluating each company’s creditworthiness before purchasing bonds. Larger funds may even negotiate more favorable status (higher positioning on the capital structure) with bond issuers or banks due to their sizable positions. Sometimes, it just pays to go with a pro.

2. Liquidity: Funds make it easy to move on when markets change

What if you don’t want to hold a bond to maturity? What if you want to quickly adjust your portfolio in response to market conditions or you need to access some cash? Funds offer greater liquidity than individual bonds. In other words, they’re easier and cheaper to sell. Continue reading “3 Reasons To Steer Clear Of Individual Bonds — And Focus On Bond Funds Instead” »


How you invest your money can be a vote for the values you want to support—from fairness and equality to safety and sustainability.

But how does it actually work?

How do your mutual funds try to make difference in the world?

There are three strategies that mutual funds have been using for years:

1. Divestment: Avoid objectionable companies

For many years, funds relied on divestment. They avoided investing in certain companies or industries, like tobacco or more recently, fossil fuels. Divestment is still an important tool, but most investors want to do more than just avoid ‘bad apples’; they want to actively support companies that are trying to do the right thing.

2. Investment: Seek out companies that are trying to make a positive impact

Today, many funds invest in companies that have strong environmental, social or corporate governance policies (ESG). This is a way for the fund to mitigate risk. A company that is mismanaged could end up facing major fines or lawsuits. And importantly, it also allows fund investors to put their money behind the kinds of companies they want to support.

3. Engagement: Work with companies to help them move forward

Perhaps the most important way that funds are making a difference is by tapping into their power as shareholders. When you invest in a company, you get a say in how that company operates: you can file shareholder resolutions and vote on these proposals at shareholder meetings, and that’s exactly what many funds do. They invest in a company with the goal of engaging with the company and helping it do better.

How fund companies have made a positive impact

Continue reading “How Funds Can Make a Difference” »

A Better Plan for Rising Interest Rates

March 7, 2017

Have you ever wished that you had a better plan for rising interest rates? You know that interest rates will rise eventually and that this could really affect the bond market. And you also know that many people—even experts—have been predicting higher rates for years now, and those predictions haven’t really panned out. Even the Federal Reserve doesn’t […]

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4 Myths of Momentum Investing

February 16, 2017

Stocks and mutual funds experience momentum—meaning that recent performance tends to persist. A stock or a fund that is doing well lately tends to continue to well in the coming months or even years. Momentum investing strategies, like our own Upgrading approach, attempt to take advantage of this by investing in funds that have strong […]

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The Best Performing Momentum Strategy

February 11, 2017

Did you see Mark Hulbert’s recent Marketwatch article about momentum investing, How to bet on stock market momentum? It’s focused on momentum investing strategies, like our Upgrading approach. Not all momentum strategies have a good track record, Hulbert noted. But NoLoad FundX’s strategy was an exception: “The best-performing momentum strategy over the long term, among the […]

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4 Myths of Sustainable Investing (video)

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Most investors today are interested sustainable responsible impact investing (SRI). But they let common misconceptions hold them back. They’re still thinking about the way sustainable investing used to be. They don’t realize how much has changed. Sustainable investing has really evolved since we first started managing sustainable portfolios for clients more than 20 years ago, […]

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Set Yourself up for Investing Success in 2017

January 4, 2017

What are you trying to accomplish this year? What do you NEED to know to make that happen? Maybe you’re out of the market, and you need to get invested again if you hope to grow your portfolio. Or perhaps your bond positions lost money last year when interest rates rose, and you want to […]

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Tap into Your Power as a Shareholder (video)

December 21, 2016

How can your investment choices actually make a difference in the world? In the past, it usually meant avoiding certain investments, such as tobacco or firearms. But another way is to tap into your power as a shareholder. As an investor, you have more power than you might think. You can vote at shareholder meetings […]

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Find Funds That Build Wealth & Support Your Values, Too (video)

December 13, 2016

Here’s a simple thing you can do to support the issues that matter to you: Invest in a way that has a positive impact. There are funds that can help you build wealth and support your values, too. They’re called sustainable responsible impact (SRI) funds, and they’re one of the fastest growing areas of the mutual […]

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