For the three months between March and May 2016, the United Kingdom recorded a record low unemployment rate of 4.9%; which is 10 basis points below the psychological lower limit of 5% it hit earlier on in the year. The last time the UK economy … [Read more...]
Q1 Annuity Sales Reports Indicate Positive Growth
Market research shows last year's annuity sales broke records. An analysis of first financial reports from top-tier annuity sellers indicates an upward trajectory for 2015. While decreasing interest rates threaten the popularity of certain annuity … [Read more...]
QLACs: New Tool for Preserving Retirement Income
Last summer, the Treasury Department introduced tax rules for a special financial tool known as a Qualified Longevity Annuity Contract (QLAC). QLAC refers to annuities purchased as part of a qualified retirement plan. The longevity part indicates … [Read more...]
Master Limited Partnerships
A Master limited partnership (MLP) is a publicly traded entity that combines the tax benefits of a limited partnership with the liquidity of a publicly traded company. MLPs are listed on the major U.S. stock exchanges, but because they are … [Read more...]
Portfolio Diversification
Portfolio diversification is a risk management technique by which investors minimize their portfolio risk by combining a variety of assets. Diversification tries to smooth out unsystematic risk events in a portfolio, and moderate the short-term … [Read more...]
Utility Bonds
A utility bond is a type of municipal bond that is issued to finance the construction of public utility projects, such as water systems, sewer systems, electrical plants and various public projects. The issuer of a utility bond receives a cash … [Read more...]
Auction Rate Securities – Meaning and Risks
Auction rate securities are debt instruments in which the interest rate is reset on a recurring basis through a Dutch auction. Auction rate securities help issuers diversify their funding structure by allowing them to pay at variable, short-term … [Read more...]
Debentures – Features, Types and Benefits
Debentures are a type of debt instrument that are not secured by specific property or collateral, but are backed by the full faith and credit of the issuer. If the issuer were to liquidate, the debenture holder is considered a general creditor, and … [Read more...]
Utility Bonds – Meaning, Merits and Risks
Utility bonds are municipal bonds that are issued to finance the construction of public utility projects, such as water systems, sewer systems, electrical plants and various public projects. The issuer of a utility bond receives a cash payment at the … [Read more...]
Don’t Be Afraid of Rising Interest Rates
By: Wealth Effect Blogger It seems every day I’m being warned by newspapers, magazines and websites of “financial bogeymen” waiting under my investment bed ready to jump out and turn my dream portfolio into a nightmare. One of these “bogeymen” I … [Read more...]
Reading the Signs in the Current Bond Market
A challenging time for bond investors By Kathy Jones September 2012 Many people have spent a lifetime building up their savings only to discover that the current low- interest-rate environment doesn’t provide enough income to sustain their … [Read more...]
FOMC Projections and Changes Since June Meeting
By CalculatedRiskBlog.com Here are the updated projections from the FOMC meeting. Below are the updated projections starting with when participants project the initial increase in the target federal funds rate should occur, and the participants … [Read more...]
Bond and Stock Market Sharpe Ratios Have Likely Peaked
There's a strong case for expecting that Sharpe ratios will be lower, perhaps a lot lower, for the stock and bond markets for the foreseeable future. What's the source of this outlook? Gravity. Reviewing the past two decades reminds that … [Read more...]
REIT Bond Covenants – A Differentiating Factor
By Michael M. Terry, CFA – Founder Rubicon Associates About two months ago I wrote an article on bond covenants, what they are and how to use them. The types of covenants reviewed in that article are primarily used in industrial bonds and … [Read more...]
Bonds actually have not outperformed Stocks over the last 30 years
By David Merkel of AlephBlog.com On the Specialness of Long Treasuries When Gary Schilling presented to the Baltimore CFA Society, he made the comment about how much bonds beat stocks by. His proxy for bonds was 25-year zero coupon bonds. … [Read more...]
Emerging Market Debt: Having Your Cake and Eating it Too
By Elliott Orsillo, CFA Season Investments Emerging market debt trades at “twice the yield of developed country debt and triple the fundamentals.” - Jeffrey Gundlach, 2011 The 1990’s were a difficult time for emerging market debt holders. In 1994 … [Read more...]
The Limitations of Credit Default Swaps
By David Merkel of TheAlephBlog Once I was talking to my boss at Provident Mutual about exotic options, like barrier, knock-out, and knock-in options. As I described them to him his reactions were: Why would I want to take that risk? But … [Read more...]
The Capital Flight to US Treasuries will Continue
By Julian Marchese of Marchese Financial As global pressures continue to shock risk markets, U.S. investors find themselves allocating capital in the same place, the United States. Whether it be in U.S. treasuries, the dollar, or U.S. corporates, … [Read more...]
Major Asset Classes | July 2012 | Performance Review
By The Capital Spectator The global economy may be facing a new round of trouble, but you wouldn't know it by looking at last month's returns for the major asset classes. The gains fell well short of June's rally, but there was no mistaking the … [Read more...]
Does the Fed Control Interest Rates?
By JW Mason of The Slack Wire Blog Casey Mulligan goes to the New York Times to say that monetary policy doesn't work. This annoys Brad DeLong: THE NEW YORK TIMES PUBLISHES CASEY MULLIGAN AS A JOKE, DOESN'T IT? ... The third joke is the entire … [Read more...]