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The Reformed Broker: – Chart o’ the day: Rotation now undeniable. – Americans are back to investing for their futures again. It’s a shame they’re coming in so late, but this is the nature of the beast.
Bill Gunderson: – Is your 401-K in all the right places? – Asset Allocation is almost gospel to the investment advisory profession. Classic asset allocation generally calls for a balance between stocks and bonds, depending upon your age and risk tolerance. For instance if you are 60 years old, you should have 60% of your assets in bonds and 40% of your assets in stocks. As you get older, you continue to put more in the so-called “safer” bucket of bonds, and less in the so-called “riskier” bucket of stocks. But what happens when a freight train is headed right for an asset class you’re invested in?
Forbes: – Bond star Gaffney: Sell-off is ‘great opportunity’. – Kathleen Gaffney has had a distinguished long-term career delivering index-thumping returns by casting a wide net across all bond sectors. In a conference call on June 26th Gaffney sounded downright pleased with the recent bond sell off, noting her list of buying opportunities “has gotten quite long the past few days.”
Learn Bonds: – How much risk is in your “conservative” portfolio? – Most investment and advisory firms have asset allocation models for their clients with titles ranging from conservative to aggressive. What you should keep in mind, especially in a possible rising interest rate environment is that most of the conservative portfolios will allocate a large percentage to fixed income securities.
Fox Business: – Three income ETFs yielding over 5 percent. – Within the carnage of income ETFs, there a handful that are now opportunities for longer-term investors searching for above average income.
FT: – Detroit will start a wave of municipal bankruptcies. – Meredith Whitney on the state of Detroit. There are five more towns like Detroit in Michigan alone. There are many more municipalities across the country in similar positions. Detroit’s decision last week paves the way for other elected or non-elected officials to make decisions to save their cities and towns, decisions that probably involve politically unpopular actions that may secure their long-term viability.
Barron’s: – Here’s what happens to your high-yield ETF in the next selloff. – Worried about the safety of owning a junk-bond exchange-traded fund? Maybe you should worry more about the fundamentals of high-yield bonds.
ETF Trends: – Junk bond ETFs surviving and thriving again. – High-yield bonds and the major ETFs that hold them “fell out of bed” following the release of the Federal Open Market Committee meeting minutes on May 22. The subsequent rise in yields on 10-year Treasurys highlighted the fact that junk bond ETFs, usually perceived to be vulnerable to credit risk, can also be stung by interest rate risk.
Bloomberg: – Some Detroit bonds gain on bet Orr’s plan will fail. – Prices on some Detroit debt reached a three-month high on bets Emergency Financial Manager Kevyn Orr’s plan to give bondholders less than 20 cents on the dollar won’t hold up in bankruptcy court.
Money Morning: – What the Detroit bankruptcy means for Municipal bonds. – You can’t blame investors in municipal bonds for being worried about how the Detroit bankruptcy will affect the muni market – it’s by a factor of four the largest municipal bankruptcy in U.S. history.
What Investment: – Emerging market bonds ‘more attractive’ than developed country bonds. – The economic fundamentals which underpin emerging market bonds make them ‘relatively more attractive’ than bonds from developed countries, Peter Eerdmans of Investec Asset Management has asserted.
Business Insurance: – First-half 2013 cat bond sales second only to 2007. – An active second quarter of issuing catastrophe bonds pushed the volume of insurance-linked securities to near-record levels in the first half of 2013, Swiss Re Ltd. said Friday.
Forbes: – Bonds for the rising interest rate environment. – Bonds get crushed by rising interest rates, but most investors are not going to just drop them from their portfolios the way Taylor Swift dropped Joe, Jake, John, Connor and Harry. What are our most prudent options?
Market Oracle: – What the Detroit bankruptcy means for municipal bonds. – No doubt, the Detroit bankruptcy will scare some investors out of the municipal bond market completely. But as is usually the case with a herd mentality, that probably is not the best move. For one thing, few municipalities are anywhere near as bad off as Detroit.
MoneyBeat: – Pimco turns negative on Spain, Italy sovereign bonds. – Pacific Investment Management Co., home to the world’s biggest bond fund, has turned negative over the government bond markets in Spain and Italy even as rival BlackRock Inc. has scooped up the bonds from the debt markets’ spring swoon.
MarketWatch: – Apple bonds have actually held up relatively well. – How have Apple bonds held up in the selloff? Not bad, relatively speaking. The 10-year fixed-rate Apple bonds sold at a yield of 2.40%, and on Monday yielded 3.19%, according to MarketAxess. That rise in yields has led to a negative total return for investors, but the differential between Apple bonds and comparable Treasurys actually narrowed. The 10-year bonds were issued at 75 basis points above the 10-year Treasury note, but spread shrank top 71 basis points on Monday.
U.S. News: – Don’t abandon bonds just yet. – Whenever there’s talk of interest rate increases, conversations about bond values aren’t too far behind. With all you’ve been hearing about bonds in the news recently, now’s a great time to review what bonds are, what role they play in 401(k) investing — and why they should still be a part of your retirement plan.
Your News Now: – Benefits of municipal bonds may outweigh the risks. – If you are looking for a relatively safe investment with a secured rate of return, you might consider municipal bonds.”Municipal bonds, tax exempt bonds, munis, basically are bonds issued by states and local governments for public purposes,” says Vice President Branch Manager of Charles Schwab Doug Zarookian.
Muni desk commentary: "this market feels very weak. we are seeing heavy bwics today but also some interest from crossover buyers etc."
— David Schawel (@DavidSchawel) July 23, 2013