Halfway Between Double or Nothing

The official numbers aren't in yet but it looks like 2015 ended without a bang for US markets.  The S&P 500 managed somewhere around 1% total return and the Barclay's Aggregate ended up about .5% -- nothing worth getting excited over. Of course, across the globe and everywhere in between there were substantial divergences in … Continue reading Halfway Between Double or Nothing

Has Janet Lost Her Patience?

Speculation has been rampant about when Janet Yellen and the Federal Reserve will finally begin raising interest rates.  Last month all the buzz was focused on whether Yellen would drop the word "patient" (with respect to rate increases) from her scheduled Fed policy statement.   She did, and ever since strategists and traders all up … Continue reading Has Janet Lost Her Patience?

Bill Gross’ Departure from PIMCO

On September 26, 2014, Bill Gross announced his sudden departure from PIMCO, the firm he co-founded in 1971. This shake-up comes at an already troubling time for the investment company after the heir apparent, Mohamed El-Erian, announced his resignation earlier in the year. The firm’s flagship Total Return fund has seen negative outflows for 16 … Continue reading Bill Gross’ Departure from PIMCO

Mid-Year Summary

Despite a surprise slowdown of US economic growth in the first quarter, the stock market has continued to climb higher. The S&P 500 is up by over 7% year-to-date. US equity REITs have been especially strong, already returning more than 17% so far in 2014. Meanwhile, the benchmark 10 year US Treasury yield has fallen … Continue reading Mid-Year Summary

No Free Yield

Interest rates have moved up this year but are still near historic lows.  This is especially true at the front end of the yield curve where people are basically earning nothing on their savings, money market, and even short-term CD accounts (and even losing money net of inflation). Demand from yield-starved investors and the opportunistic … Continue reading No Free Yield

Last Yield Standing

For those living off a fixed income, the current interest environment is, to say the least, quite unsavory. Extending out to 30 years on the Treasury curve only fetches a paltry 3% (and a taxable 3% at that). This has interest-starved investors loading up on junk bonds and leveraging up bond portfolios (risk parity anyone?). … Continue reading Last Yield Standing

Dangers of High Yield Hunting

Fixed income investors that were accustomed to earning 5% on a portfolio of government bonds are now getting 2% for the same securities. The steep drop has interest starved investors hunting for yield. As usual, the easiest way to increase yield has been to increase risk, and investors have taken the path of least resistance. … Continue reading Dangers of High Yield Hunting