Vetting Your Financial Expert

          

Here’s a quick test of someone who is considering himself a financial expert: Ask him about buying bonds with the threat of inflation.

                     

When he starts talking TIPS, (for inflation-protected Treasury bonds), or without first asking how long you intend to hold the bonds, he has flunked first steps.

                     

Then ask him to explain the duration principle behind the purchase of bonds. And how the usage of duration can overcome the effects of inflation. Chances are he will flub that too.

                                        

Want my answers to such questions? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)