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Do Bonds Make Sense Right Now…You’re Better-off Avoiding Junk…Detroit May Help Munis…and more!

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Forbes: – Are bonds too risky for your portfolio? – With interest rates on the rise, we’ve recently been getting a lot of questions as to whether it really makes sense to invest in bonds right now. A lot of experts are even talking about a bond bubble. After all, bonds lose value when interest rates go up and even if interest rates stay level, you’re essentially locking yourself into a pretty low rate of return for the duration of the bond.

Money News: – Financial Advisers: Stick to investment-grade corporate bonds over junk bonds. – Money is flowing back into high-yield bond mutual funds and exchange-traded funds (ETFs) this month after a selloff in June. But financial advisers tell The Wall Street Journal that investors would be better off sticking with the safety of investment-grade corporate bonds.

Times Dispatch: – Detroit may help — and not hurt — muni-bond investors. – Money has been marching steadily out of municipal bond funds for about two months now, but with the recent news of Detroit’s bankruptcy claim, a lot of individual investors have wondered whether they should join the parade.

Bloomberg: – Stocks beat bonds by most since January. – Global stocks rose in July, beating bonds and the dollar by the most since at least January, while commodities had the best returns in 11 months as corporate profits topped analysts’ estimates and investors reversed bets on when the Federal Reserve will reduce stimulus.

Morningstar: – Equities are still cheaper than bonds. – Tapering is not tightening but valuations continue to favour equities over bonds, says Threadneedle’s Mark Burgess.

WSJ: – Mutual-fund assets rise, except for muni bonds. – Long-term mutual funds rose $8.29 billion in the latest week, as investors added money across fund categories except for municipal bonds, according to the Investment Company Institute.

Investors Chronicle: – Retail bond market attracts investors. – The running commentary about the retail bond market this year has focused on the perceived lack of issuance. The theory is that companies have found easier access to funds through government-backed schemes like ‘Funding for Lending’ and so have avoided coming to the market. This impression is misleading, not only because the number of issues so far this year is only one less than the equivalent period in 2012, but also that the volume of trades placed by retail investors has increased markedly, according to new research by Hardman & Co.

Investing Answers: – Municipal Bonds: 3 ways to invest that you may have forgotten. – Regardless of how you feel about the traffic jams this may indirectly create, here are a few things you may not know about municipal bonds.

Bloomberg: – Worst July since 2003 seen paving way for a rebound. – The municipal market’s biggest July decline in a decade is leading investors such as Vanguard Group Inc. to bet history is on their side as they buy with yields close to a two-year high.

CNBC: – Banks find S.&P. more favorable in bond ratings. – The Wall Street ratings game is back. Five years after inflated credit ratings helped touch off the financial crisis, the nation’s largest ratings agency, Standard & Poor’s, is winning business again by offering more favorable ratings.

BondBuyer: – Muni bond issuance falls 13% in July. – Long-term municipal bond volume fell 13% in July, hurt by rising interest rates and headline scares concerning Detroit’s record bankruptcy filing and Chicago’s downgrade.

Investment News: – BlackRock joins hunt for the white whale of retirement income. – Giant money manager files for approval a set of bond funds with target date maturities.

Reuters: – Pimco Total Return Fund up 0.49 pct in July. – Bill Gross’s Pimco Total Return Fund, the world’s largest mutual fund, posted a positive monthly return of 0.49 percent in July, after the fund posted its biggest monthly slide since 2008 in June, preliminary data from Morningstar showed Thursday.

David Fabian: – Treasury bonds: New lows, now what? – David Fabian advises investors to consider shortening the duration of their portfolios and consider actively managed strategies for their fixed-income exposure.

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