Like many investors, Templeton Bishop loves playing the market but struggles to make good choices when it comes to his portfolio. “Everyone tells me to keep it lean and healthy but sometimes it’s really difficult,” he said. “Especially in the evening, after dinner. I know they won’t be very good for me, but these junk bonds, they look so appealing. Those delicious, high-yield high-risk ingredients. And such awful credit ratings. I can’t help myself.”
And he is not alone. Ask experienced broker, Kathryn Simons, and she’ll tell you that for many of her clients, maintaining an influx of healthy investments when junk bonds are readily available and packaged so enticingly is one of the hardest tasks.
“It’s all about staying disciplined in the twilight hours when inhibitions lower and guards go down,” said Simons. “There’s always a market open somewhere and that’s when investors can get into trouble.”
She also sees our current situation as a drawback. “In these idle, pandemic-y times, a portfolio can take on a lot of unwanted and potentially fatal junk. For investors who don’t really know what they’re doing, finally having time on their hands to learn just enough to think they do know what they’re doing can be devastating for financial health. A little knowledge can be a very dangerous thing.”
Ever the unflappable optimist, Templeton Bishop generally doesn’t concern himself with knowledge or portfolio health, instead preferring a strategy that combines poor willpower, zero impulse control, a coked-out broker and a steady diet of “cool, risky shit.” And like every investor with a trust fund, he’s had some wild binges, very few gains, a whole lot of losses and a crash or seven.
“My dad always threatens to stop bailing me out,” said Bishop, “but he’s bluffing. He’d never do that because of ‘the optics’. And he got scared that one time a loan shark sent goons to break my leg. But that was a sports gambling debt, not junk bonds. I’m better now. I know what I’m doing.”