Did we finally hear a ‘less hawkish’ Jay Powell yesterday? For the first time in months the Fed Chair may have slightly lowered his guard. But barely… as Powell is far from being a dove. A dovish Fed is one that is (a) cutting rates; and (b) ending quantitative tightening. Neither of those things are happening soon. But it wasn’t just Powell’s language which fired up the bulls. Janet Yellen also played a role – suggesting the government plans to sell less debt than expected… sending bond yields lower.
"Interest Rates / Bonds"
4 Ways to Invest in Bonds
If you’ve been following my posts the past few weeks – I’ve suggested it’s a good time to start increasing your exposure to bonds. As part of these missives – I’ve also had many reader emails asking me how? This missive will offer you a guide on some of the simple ways you can increase your exposure to fixed income. But let me offer a caveat… bonds are not risk free (nothing is)
Did Ackman Just ‘Ring the Bell’ on Bond Yields?
Over the weekend – I made the case for investing in fixed income. I think there’s a compelling longer-term opportunity for investors – where fixed income warrants exposure in your portfolio. Turns out, it may not be just me thinking this way. For example, last week I referenced Howard Marks’ latest memo. He explained how some are offering equity-like returns for investors (e.g., above 8% for non-investment grade debt). What’s more, Warren Buffett said he was increasing his exposure to bonds (at the short and long-end) a couple of months ago. Today billionaire investors Bill Ackman and Bill Gross were sounding the horn. Question: are we getting closer to a near-term peak in long-term yields?
Investors Start Weighing the Risks
Investors have hit pause on equities – evaluating a new set of risks. For example, the S&P 500 is now trading close to the same level it was at the end of January. 8 months of gains gone! The world’s largest index is up ~10% year to date… losing 2.4% this week. When you consider the S&P 500 lost ~19% last year…. it has not been a good two years. This post looks at why the outlook has deteriorated with 4 key charts: (i) 10-year yield; (ii) 10-2 yield curve; (iii) VIX; and (iv) gold – which touched $2,000 this week. What does it all mean?
For a full list of posts from 2017…