Five Ways to Keep Your Muni Portfolio on Track in 2018
They are the primary objectives of municipal bond investing: Safety. Income. After-tax return. But the market doesn’t always provide the ideal environment, and the coming year looks to be no exception. How can muni investors avoid getting knocked off course in 2018? They can adhere to these five strategies.
The 2018 Economic Playlist: Carry the Tune
Since the dawn of time music has played a pivotal role in the defining of the times and the progression made. We would like to utilize the artistic genius of these maestros to bring some context to the current pivotal point in the economy and capital markets.
Q1 2018: Goldilocks Need Not Fear the Bear in 2018...But Her Respite Will Be More Fitful
Tina Byles Williams, CIO and CEO of FIS Group, has just published the latest Q1 2018 Market Outlook, which delves into predictions for the year ahead, from a more challenging environment for risk assets to geopolitical tensions on the horizon.
Fads, Manias and Bubbles!
It is important to separate mini-manias from true bubbles. Unfortunately, the difference is mostly the amount of money chasing the folly. Millions and even billions of dollars lost (and thousands of jobs) equate to fads, while trillions of dollars lost (and rampant unemployment and recessions) are bubbles.
When Speculation Has No Limits
Here we are, nearly three times the level at which I expect the S&P 500 to complete this cycle. Yet our immediate outlook remains neutral (though tail-risk hedges remain appropriate). It’s essential to distinguish between valuations, which have long-term implications, and market internals, which have implications for shorter segments of the market cycle.
Tax Reform: A Year-End Bonus for Fixed Income?
Despite the near non-stop drama of the legislative process, we ended December with the Tax Cut and Jobs Act of 2017 being signed into law. What does this mean for fixed income investors? In my opinion, the news is overwhelmingly positive for the US investment grade market; here are four reasons why.
Recipe Calls for a Broad Commodities Rally in 2018
At the beginning of every year, we update what’s typically one of our most popular pages, the Periodic Table of Commodity Returns. I encourage you to explore 10 years’ worth of data on basic materials such as aluminum, zinc and everything in between. A word of warning, though—the interactive feature makes the table highly addictive.
Year of the Octopus, Part 2
Only two weeks in and 2018 is already breaking records – mostly in a good way. But that leaves 50 potentially less enjoyable weeks to go. So rather than focus on promising current events, I think I’d better dip back into my annual forecast bag and share a few more highlights with you.
Balancing Yield and Risk in a Changing World
Enhanced yield is still available – a selective and broad approach is key.
Investment Grade Credit: Be Actively Aware of BBB Bonds
Years of significant growth in the U.S. corporate bond market have been accompanied by a steady decrease in overall credit quality and a trend toward higher leverage. Close to $80 billion in U.S. corporate bonds currently rated BBB potentially could be downgraded below investment grade in 2018, according to our estimates.
Investors may want to consider taking a more cautious and selective approach to BBB nonfinancial corporate bonds, particularly those in the low BBB rated segment, where the risk of downgrades is higher and the room for error is lower.
That said, we find many compelling BBB bonds in the U.S. marketplace today. As a large active fixed income manager, PIMCO is in our view ideally positioned to manage the risks in the complicated universe of BBB bonds.
US Economic Cycle and Recession Probability Update - January 2018
Despite an expensive market, economic risks are falling. Stay invested.
Market overview Q4 17: Dreaming
Although there are many superficial reasons to be enthusiastic that strong market performance can continue, most positives are overstated and many risks are underappreciated. In fact, today's investment environment entails such a high degree of uncertainty that most investors would be best served by simply minimizing their worst case scenario.
ECRI Weekly Leading Index Update: Another Record High for WLI
Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 147.6, up 0.6 from the previous week and at another record high. Year-over-year the four-week moving average of the indicator is now at 2.19%, down from 2.46% last week. The WLI Growth indicator is now at 3.3, down from the previous week.
CalPERS Increases Equity Exposure. We Believe a Different Approach May Be Worth Considering.
At a time when equity valuations are at historic highs, increasing exposure means increasing risk. We believe there are better approaches that may help deliver a portfolio's required returns.
Gundlach’s Forecast for 2018
Emerging markets and commodities present the best investment opportunities for this year, according to Jeffrey Gundlach. Those to avoid include the S&P 500, which he claims will show a loss for 2018. His larger warning was that most of the good news on the economic front is already priced into the capital markets.