A Difficult Point In The Market Cycle For Investors To Navigate [View article]
I will just say seekingingalpha changed the titled from what appeared on our blog. A seekingalpha writer's title with light market experience maybe. :)
Taken in combination (ETFs and mutual funds) equity flows really did not pick up until this year. From a contrarian perspective this would be a positive development that investors have remained cautious on stocks.
I do agree these positive in flows into U.S. investment assets is creating an artificial impact on U.S. investments. Much of this in flow is being driven by weaker foreign currencies abroad. We wrote about this variable in our recent investor letter that you may find of interest at the below link.
Dow Dogs Are Outperforming This Year [View article]
I am glad you enjoyed the article and agree it is good to add stocks you are interested in to a watch list while performing research on particular companies. Good luck.
How Inflation Influences Investment Classes [View article]
I don't think we are going down the same path as Japan, but I will not put money on it. The inflation Jeannie can rear its ugly head pretty quickly so structuring a portfolio that accounts for this, somewhat anyway, is important.
The most problematic scenario would be stagflation and the level of debt carried by the U.S. economy is constraining growth. We note in a post on our blog yesterday that gov't revenue is now at a level higher than before the financial crisis. In spite of this the federal debt continues to grow. The growth of the debt is the reverse of the benefit savers get from the power of compounding.
I believe there are opportunities outside the U.S. for fixed income investors. An important factor for U.S. investors vis-à-vis foreign bonds is the impact of currency exchange rates. Generally, foreign and U.S. bonds have alternating outperforming periods as noted in the below chart.
The developed and emerging markets are obviously two distinct markets for investors to consider. The central bank in China and Brazil are taking an accomodative approach in an effort to stimulate economic growth. Austrailia is doing the same. The impact for dollar investors of lower rates in these other markets can be seen by specifically looking at Japan. Japan is in a strong QE mode that is weakening its currency relative to the dollar as noted by the chart at the below link.
This will have a negative impact on unhedged returns as the currency returns are converted back to the dollar.
In the end foreign bond investment can add an element of diversification to ones overall portfolio. However, investors need to know the strategy being employed in a foreign bond portfolio in order to fully evaluate the risk (is it hedged or unhedged). I am of the belief there are markets outside the U.S. that are not "coupled" to the U.S. in terms of interest rates. Below is a table of interest rates in global markets/countries.
Fixed Income Investors May Be In For A Surprise [View article]
April May,
Everyone's situation is unique. Without knowing ones complete financial picture it is impossible to answer your question. We do have bond allocations to bonds for our clients absent long term bond maturity exposure. We include floating rate, foreign and high yield just to name a few of our fixed income strategies.
A Difficult Point In The Market Cycle For Investors To Navigate [View article]
David
A Tired Bull Market [View article]
Taken in combination (ETFs and mutual funds) equity flows really did not pick up until this year. From a contrarian perspective this would be a positive development that investors have remained cautious on stocks.
http://bit.ly/13dAEgs
Of late though, in Q1, investors are more favorale to equities.
http://yhoo.it/10HLeAA
Sector Rotation May Be Underway [View article]
I do agree these positive in flows into U.S. investment assets is creating an artificial impact on U.S. investments. Much of this in flow is being driven by weaker foreign currencies abroad. We wrote about this variable in our recent investor letter that you may find of interest at the below link.
http://bit.ly/ZuuLyb
David
Sector Rotation May Be Underway [View article]
You might find the article at the below link of interest regarding foreign central banks buying equities.
http://ti.me/ZdHd1F
Dow Dogs Are Outperforming This Year [View article]
David
How Inflation Influences Investment Classes [View article]
The most problematic scenario would be stagflation and the level of debt carried by the U.S. economy is constraining growth. We note in a post on our blog yesterday that gov't revenue is now at a level higher than before the financial crisis. In spite of this the federal debt continues to grow. The growth of the debt is the reverse of the benefit savers get from the power of compounding.
Dangers Lurking In The Bond Market [View article]
David
Dangers Lurking In The Bond Market [View article]
I have significant oncerns with these types of ETFs. See a recent article I wrote on this topic at the below link.
http://bit.ly/VTOEi3
Dangers Lurking In The Bond Market [View article]
http://rp-pix.com/nw
Dangers Lurking In The Bond Market [View article]
http://bit.ly/12ilyWP
The developed and emerging markets are obviously two distinct markets for investors to consider. The central bank in China and Brazil are taking an accomodative approach in an effort to stimulate economic growth. Austrailia is doing the same. The impact for dollar investors of lower rates in these other markets can be seen by specifically looking at Japan. Japan is in a strong QE mode that is weakening its currency relative to the dollar as noted by the chart at the below link.
http://bloom.bg/12ErIVQ
This will have a negative impact on unhedged returns as the currency returns are converted back to the dollar.
In the end foreign bond investment can add an element of diversification to ones overall portfolio. However, investors need to know the strategy being employed in a foreign bond portfolio in order to fully evaluate the risk (is it hedged or unhedged). I am of the belief there are markets outside the U.S. that are not "coupled" to the U.S. in terms of interest rates. Below is a table of interest rates in global markets/countries.
http://bit.ly/12ilyWR
Fixed Income Investors May Be In For A Surprise [View article]
Thanks for the heads up.
David
Fixed Income Investors May Be In For A Surprise [View article]
Fixed Income Investors May Be In For A Surprise [View article]
Fixed Income Investors May Be In For A Surprise [View article]
Everyone's situation is unique. Without knowing ones complete financial picture it is impossible to answer your question. We do have bond allocations to bonds for our clients absent long term bond maturity exposure. We include floating rate, foreign and high yield just to name a few of our fixed income strategies.
David
Fixed Income Investors May Be In For A Surprise [View article]
I think you might find the two articles below of interest discussing issues with target date or life cycle funds.
Why Target Date Funds Could Miss the Bull's-Eye:
http://sm.wsj.com/SdCIq3
The Glidepath Illusion, Research Affiliates By Rob Arnott:
http://bit.ly/UzH08a
David