The Essence Of Investing

The essence of investing here at Market Wiz Advisors is summarized in an esoteric concept known as "duration." The "duration" of a class of securities may be defined as a measure of the "uncertainty" associated with the "timing" of the returns on that class of securities.

Long-term bonds and common stocks are called long-duration assets while short-term bonds and cash are called short-duration assets. Historically, over longer periods of time, it is in the nature of capitalism that the returns on long-duration assets have been higher than the returns on short-duration assets.

By being willing to accept greater uncertainty in the timing of their returns, investors, in the aggregate and over time, must be paid more for the inconvenience.

Designing a portfolio suitable for any individual investor, to a large extent, consists of matching the portfolio's duration to the needs, circumstances, and aspirations of its owner.