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Bloomberg: – Bernanke says Fed may taper buys. – Federal Reserve Chairman Ben S. Bernanke told Congress this morning the Fed may cut the pace of bond purchases at the next few meetings if policy makers see indications of sustained economic growth.
Barron’s: – PIMCO’s Gross: Treasuries not in A bubble, but stocks frothy. – Pimco‘s Bill Gross was asked a direct question about what he sees as the most overvalued asset out there right now. Gross names both Treasuries and Japanese government bonds. He said he sees more overvaluation in 30-year Treasuries than in 5-year Treasuries, but that there’s “not a bubble in Treasuries.”
Oblivious Investor: – Are bond funds unusually risky right now? – Many people are concerned — or even scared — about the riskiness of their bond holdings right now. Mike Piper tries to put peoples mind at rest.
Learn Bonds: – Investing in P2P loans: Learn to love defaults and late payments. – Investing in peer-to-peer loans can provide you double digit annual returns. However, you need to be prepared for defaults. Many borrowers aren’t going to pay off the full amount they owe. Ironically, a large number of defaults may be a sign that you’re investing correctly.
Anthony Valeri: – This weeks bond market perspectives: Tapering tantrums. – The fear of an earlier reduction in the pace of bond purchases has been a factor in recent weakness in Treasury prices. Inflation data argue for continued bond purchases, and focus falls on Fed Chairman Ben Bernanke this week, as he may address this uncertainty. We continue to view yields as range-bound. Any tapering-related bond sell-off is likely to be limited unless corroborated by better economic data.
BCA Research: – What could end the rally in U.S. high-yield credit? – The 2003-07 credit cycle provides an instructive template on how the current cycle may eventually play out.
CNBC: – ETFs? Here’s what you should know. – Investing in stocks and bonds has become easier and easier over the years. First, there were mutual funds, then index funds. Now, exchange-traded funds are all the rage. In fact, you could do all your investing with the 1,000 or so ETFs, most of which use index-style strategies rather than active management. So what do you need to know to get started using ETFs?
InvestorPlace: – Nervous about high-yield bonds? You don’t have to be. – High-yield bonds are the investment everyone loves to hate right now. Absolute yields are at record lows, and talk of a bubble is rampant with multiple experts weighing in each day to make the case of why the rally’s days are numbered. For investors who are searching for ways to boost their portfolio’s yield, this represents a conundrum: buy into an asset class sitting at a multiyear high, or settle for lower-risk options that pay nothing? But there is a third option!
Morningstar: – Fund face-off: First trust long-short high-yield funds. – With many income-investors petrified of rising interest rates, some are turning to alternative fixed-income strategies. Senior loan funds offer some potential advantages, as the floating-rate coupon payments lower these funds’ durations. But with many of the closed-end funds, or CEFs, in this sector trading at hefty premiums, it might be worth exploring other options. Here, we take a look at two funds designed to accomplish similar goals.
Barron’s: – After usual spring pratfall, munis could struggle in June too. – Normally, once it survives its traditional spring buffeting, the muni market can count on some smoother beachgoing months ahead. But strategists are starting to sound concerned that the summer of 2013 might not be a placid one for munis.
Indexuniverse: – The global bond ETF search. – To go truly global in the world of bond ETFs, for now, takes some creativity and a fair amount of patience. After a recent review of the almost 200 fixed-income ETFs traded in the U.S., a stark reality hit me: Issuers have been slicing and dicing the fixed-income market ever-more granularly, but nobody has yet offered a market like investment-grade global bond fund.
Reuters: – As economy strengthens, a bonds sell-off may beckon. – The U.S. government bond market has weakened in recent weeks but some investment strategists fear that this may only be the beginning of an extended sell-off.
SEC: – SEC charges city of south Miami with defrauding investors about tax-exempt status of municipal bonds. – The Securities and Exchange Commission today charged the City of South Miami, Fla., with defrauding bond investors about the tax-exempt financing eligibility of a mixed-use retail and parking structure being built in its downtown commercial district.
FT: – IMF studies changes to bond restructurings. – The International Monetary Fund is studying changes to how it handles sovereign debt restructurings after a turbulent period that has rattled the balance of power between governments and their creditors.
Barron’s: – Where active management wins: Bonds, but not smallcaps. – This week’s installment of Barron’s Focus on Funds video with Jack Otter explains the logic for why SPDR Blackstone/GSO Senior Loan ETF has a shot at higher returns than its competitors, and the surprising difficulty fund managers have had in beating the small-cap iShares Russell 200 Index Fund.
WSJ: – Apple stock trumps its debt. – Apple Inc. is giving investors a real-time lesson in why stocks can be a better bet than bonds when investors think rates are poised to rise. Investors who bought Apple’s 30-year bonds at issue April 30 have watched the debt lose more than 5% of its value, while the company’s stock is down about 0.5% over the same period.
#Bernanke "Could taper in next few meetings" dependent on data. Not helping Treasuries but timeline not surprising.
— AnthonyValeri (@Anthony_Valeri) May 22, 2013