Monday Reading

To help get the new week underway...

• Roger Altman on one of a recurring theme around here: The likelihood of a decidedly slow-growth recovery (via Calculated Risk).
• Our friends at BrightScope note an important new appointment at the Emplyee Benefits Security Adminsitration and provide a summary report on the recent APPSA Summit.
• More on the 401(k) front: Scott Simon's overview of the process by which plan sponsors can delegate most of their fiduciary responsibility: By naming an external, independent fiduciary.
• Some handy research from Vanguard on the advantages of index-based investing. Our take: In a probabilistic world, an appropriate mix of index-based vehicles make good sense for most investors.
• Jane Bryant Quinn channels Rob Arnott on the relative returns of stocks and bonds. No doubt: It's all about the price you pay. We'd draw special attention to this passage:

Conservative investors were stunned when their corporate bond funds took double-digit losses in the frightening market collapse of September-October 2008. Long-term corporate bonds fell 16 percent through October, according to Ibbotson Associates--their worst performance on record.

That wasn't supposed to happen. In bad stock markets, investors expect their bonds to rise in price or at least hold flat. Instead, for the first time, all the major asset classes fell together. In February, they were all savaged again.

Yep. As David Swensen has long noted, for portfolio diversification and risk-management purposes, treasury notes and bonds have substantial advantages over corporates, which can (and when it matters most, do) behave too much like their equity cousins.