The Federal Reserve has changed its inflation policy. Here’s what it may mean for markets.
Resiliency and diversification potential remain critical in a world with meaningful uncertainty ahead.
Sovereign bonds have long been the prime defensive asset for multi-asset portfolios. But in today’s extraordinary market conditions, should investors make more extensive use of other defensive choices?
Market update from BlackRock's municipal bond team.
With the COVID-19 crisis far from over, we expect increased policy stability in the U.S. next year, no matter who wins in November.
The snarky comments about financial engineering practically write themselves: An exchange-traded fund investing in collateralized loan obligations? What could go wrong?
The S&P 500 SPX and Nasdaq NASD have recently hit a series of fresh all-time highs and the Dow DJIA now sits less than 2% off of its all-time high which has many people wondering if the market is overbought and due for a correction.
Passive bond funds – particular those that track the popular Barclay’s AGG index – offer the worst risk-return profile ever, according to Jeffrey Gundlach’s DoubleLine Capital.
After a wicked stock market decline into late March and impressive 60% advance off the low, it seems a stretch to expect still higher equity prices. However, a major extension to the post March rally is definitely supported by the five reliable long-term indicators featured in this research note. Their current position is far more consistent with a major long-term buying opportunity than a selling one.
Evaluating the unusual characteristics of the profitability factor
The legendary fund manager, Bob Rodriguez, doesn’t like either stocks or bonds, but he explains the particular strategy he is pursuing for buying hard assets.
In a low-yield environment, advisors need to use financial planning tools like no-commission annuities to improve after-tax, after-advisory fee bond returns.
In the age of Anthony Trollope, in hindsight, the variable cash returns of common stocks and their dividends deserved greater premiums; the certainties of fixed income coupons deserved lesser ones. Our family office is betting on a similar shift in market discounting.
Columbia University hired Kim Lew as chief executive of its $11 billion endowment, joining a small group of women to oversee investments at the wealthiest U.S. colleges.
Here’s the evidence.
Different investors will choose different paths in response to the challenge of low rates and high credit uncertainty. Some may want to fight the trend by taking on more risk to achieve a target level of income or return.
There are technical distinctions between investing versus speculating. Nevertheless, both concepts are often thought about or utilized interchangeably. Moreover, there are nuanced distinctions between a rational or well-thought-out speculation versus outright gambling.
The investment grade fixed income market has been unusually active in 2020. Initial concerns about Covid-19 triggered a sharp selloff, but sentiment abruptly reversed when the Fed announced plans to purchase corporate bonds. Spreads have nearly returned to their pre-pandemic levels, but not all sectors have recovered equally, creating interesting opportunities for savvy investors.
Prior to Hurricane Laura making landfall in Louisiana and the wildfires in California and parts of the West igniting, the U.S. had already experienced 10 different billion-dollar natural disasters this year.
As Japan considers Prime Minister Abe's successor, fiscal and monetary policy appears to be remaining stable and Japanese corporate profits are climbing back from COVID-19 impact, at least for now.
The Georgetown professor and former PIMCO economist says democracy will have failed if the strategy continues working for decades.
Tina is an old friend of mine, but she is also a sad case of hubris, over-confidence and misguided pride. I first met Tina about 38 years ago but, more recently, I have been reminded of her presence every single day. Sometimes valuations get so much out of whack that I get goose bumps all over, and this is one of those situations.
You know it’s a bubble when you have to edit the Y axis on all of your charts because valuations have broken above every historical peak, and estimated future market returns have fallen beyond the lowest points in history, including 1929.
Bond investors face a challenging environment. The federal funds rate is back near zero, the 10-year Treasury yield remains stuck in a 0.5%-to-0.75% range, and inflation-adjusted (real) yields are deep in negative territory.
Risk is running rampant in financial markets. Stocks trade at dot-com-era valuations, the IPO pipeline is full, SPACs are back, Bitcoin’s headed toward a record. And right on cue, here come the crypto opportunists.
Led by technology and large-cap companies, the S&P 500 is on pace to post its best summer performance in over 80 years.
Despite reaching all-time highs above $2,000 per troy ounce this summer, gold prices might still have room to run, according to Franklin Equity Group’s Steve Land. In addition, he shares some reasons why the current environment could present new opportunities for gold-focused miners to redefine themselves as stronger businesses.
In a new quarterly letter to GMO clients, head of asset allocation Ben Inker highlights the sea change in the utility of government bonds and Matt Kadnar, member of GMO’s Asset Allocation team, weighs in on today’s low bond yields.
Earlier this year, Jeremy Siegel said that, “75/25 is the new 60/40,” a recommendation to raise stock allocations to make up for lower bond yields. However, what matters for investors saving for retirement is not the asset class performance, but how those returns translate into retirement consumption.
Key Takeaways
Bond yields are low, but investors’ need for income is high. In this one-minute read, Tony DeSpirito offers three reasons to look to equities for income.
It’s a tale of two bull markets. One part of the market is trading as you would expect with near depressionary economic numbers. The only description for the other part is “insane.”
The Federal Reserve just tweaked how it thinks about inflation, and this could have a huge impact on gold and gold mining stocks. But Fed Chair Jerome Powell’s speech raises the question yet again if we’re even measuring inflation accurately in the U.S.
The Federal Reserve has decided it will throw away the rule book.
The move away from a precise 2% target likely means short-term rates will stay lower for longer.
The Fed is about to bestow more gifts on the market, stoking a new phase in the risk rally, according to Morgan Stanley Investment Management portfolio manager Jim Caron.
Capital markets have rebounded from their COVID-19-induced lows, but impacted industries have lagged substantially. That pessimism may be overdone in some cases, creating opportunities for multi-asset investors to exploit dislocations.
Investors flock to municipals to meet safety, income and after-tax return goals. But investors should consider how they gain exposure to the asset class.
This November’s US presidential election pits Donald Trump against Democratic nominee Joe Biden, a longtime politician who represents a more progressive policy approach. Our Head of European Fixed Income David Zahn breaks down the implications of the US election for Europe, and why many of Biden’s policies line up more closely with European views.
Latest insights on the disruptive effects of the pandemic and what those mean for credit.
Interest rates are at extreme lows around the world, and they’ll likely stay low for some time. Does this mean US-based investors should revert to a US-only bond strategy?
Despite reaching record highs earlier this month, gold remains attractively valued, according to our framework.
The current environment may be more uncertain and riskier than any we have seen in our lifetimes. Yet, corporate bond spreads say the future has never been more certain.
My family office has decided to take Jeffrey Gundlach’s general advice and look at the areas in common stocks that have been damaged but not supported by Fed actions.
The number of Americans filing for initial jobless claims this week spiked above 1 million, while the number of deaths attributed to COVID-19 remains above 1,000 a day. But there was much else to celebrate.
Treasury bond yields have been drifting quietly lower since early June. But there is more going on beneath the surface than it might seem at first glance. Real yields—nominal yields less inflation—have declined steeply into negative territory. While nominal yields are near record-low levels from the deep economic decline, inflation expectations are picking up.
The Absolute Capital Opportunities Fund (CAPOX) uses a flexible approach to value investing. It is sub-advised by a team at Chicago-based Kovitz, led by Mark C. Rosland and Joel D. Hirsh. As of May 31st, 2020 its cumulative return was 29.49% versus 1.03% for the HFRX equity hedge index.
Emerging countries have been in the midst of a crisis that is not of their own making. A great majority of these countries are navigating the crisis fairly well.
Investors should consider alternatives such as private credit as they search for positive yield in a world of low or negative interest rates, says Nuveen.
Everybody is wondering how the stock market can be so high while the U.S. economy is so low. But you don’t hear the same rumbling concerns about the bond market – even though something very similar to ultra-high P/Es is going on in the fixed income side of your portfolio.
