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This Week’s Top Bond Market Stories – June 22nd Edition

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Learn Bonds: – Jeff Gundlach: 3 points every investor should know. – Bond guru Jeff Gundlach was on CNBC Wednesday and had some interesting things to say. Here’s what you need to know.

Learn Bonds:  – Hey Bernanke, what are you so afraid of? – What are Bernanke and the Fed afraid of? I think most of Wall Street know the answer to this question. Bernanke and the Fed are well aware that a massive distortion in asset prices has occurred as a result of QE and that if the Fed stops QE, asset prices across various parts of the financial markets are likely to fall.

Learn Bonds:  – The Vanguard total bond market index fund (BND) rating report. – If you wanted to own one bond fund to gain the benefits of diversifying beyond stocks, we recommend the Vanguard Total Bond Market Index Fund (BND).  This super-low fee fund (0.10% annual expense ratio) will mirror the performance of the US investment grade bond market.

Learn Bonds:  – 2 REIT preferreds yielding over 6%. – The preferred stocks of many REITs, like the common stocks, have recently sold off. As the selloff intensified, I decided to do some shopping. In this article, I would like to introduce readers to two of the preferreds I purchased and the businesses backing those preferreds.

Learn Bonds: – 12 bonds with attractive yields and maturities. – Financial Lexicon goes in search of individual corporate bonds that meet the following criteria: triple-B to double-B ratings, less than 10 years to maturity, trading below par, and having what I view as enticing yields and moderate credit risk.

Barron’s: – Rubber-duck investing. – UBS Wealth Management’s Alexander Friedman and Mark Haefele warn investors against getting sucked in by the freak-out over the taper. The Fed’s growing confidence, they say, suggests a strong U.S. economy for the next two to four years.

Telegraph: – How to protect your pension from a bond market crash. – It won’t just be investors with money in corporate bond funds who will be affected if there is a serious shake-out in the bond market. The price of fixed-interest investments such as bonds and gilts affects the value of your pension fund, the level at which you can fix your retirement income and how many so-called “cautious” funds perform. We look at the options for insulating your finances from a burst bond bubble.

Quartz: – Not pleased with your yield-less investments? Invest in doom! – Tired of old-fangled investments? Had it up to here with Bernanke-induced market panics? Just want to pile on the risk already? We have a solution: Invest in disaster!

Yahoo Finance: – Bond bull market isn’t dead yet, according to Gary Shilling. – With yields rising and investors fleeing bond funds in droves of late, it’s becoming conventional wisdom that the bull market in bonds is over. But, to cite Mark Twain, reports of the death of the bond bull market have been “greatly exaggerated,” according to Gary Shilling, president of A. Gary Shilling & Co., and author of The Age of Deleveraging.

Fortune: Bernanke won’t blow up bond market. – The last of the economy’s Band-Aids are coming off. The question is how much it will hurt.

Interactive Investor: – Bonds at a tipping point. – Volatility in government bond markets has risen sharply following Federal Reserve chairman Ben Bernanke’s May testimony to Congress. Having fallen as low as 1.6% shortly before Bernanke spoke, 10-year US government bond yields are now trading at around 2.2%, levels not seen since the first half of 2012.

Reuters: – Bernanke points to reduced Fed bond buying this year. – Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank expects to slow the pace of its bond purchases later this year and bring them to a halt around mid-2014, comments that weighed on stocks and pushed bond yields to a 15-month high.

CNBC: – Gundlach: Bet on a ‘Most Hated Asset’. – DoubleLine Capital’s Jeff Gundlach told CNBC on Wednesday to expect a rally in bonds very soon.

Motley Fool: – Should long-term investors go for dividends or blue-chip bonds? – Given the recent boost in bond yields, let’s compare dividend yields to bond yields for the 30 companies in the Dow Jones Industrial Average.

TF Market Advisors: – Where would bonds trade if the Fed “normalized” policy. – Before we talk too much about “tapering” or “unwinding” or whatever euphemism you want to use for the Fed buying less, but still a heck of a lot, of bonds, we thought it would be interesting to play around with where rates would be if the Fed just had a “normal” policy. We think it might be useful to think about that for a bit. Just drop the idea of QE and tapering and play “what if” with the treasury market.

Reuters: –  Detroit takes aim at its pensioners. – Detroit, which is trying to avoid insolvency by proposing what Moody’s this week called an “unconventional and precedent-setting restructuring.” It plans to dip into its pension fund, as part of a proposal to creditors.

FT Adviser: – Bonds ‘compelling’ after volatility. – Last month’s spike in bond market volatility has made some areas of the corporate bond market “more compelling”, according to Pimco’s Ketish Pothalingam.

FT: – Fed likely to signal tapering move is close. – Ben Bernanke is likely to signal that the U.S. Federal Reserve is close to tapering down its $85bn-a-month in asset purchases when he holds a press conference on Wednesday, but balance that by saying subsequent moves depend on what happens to the economy.

FT: – Markets Insight: QE addiction may be hard to kick. – Financial markets are focusing on the potential exit from the expansionary fiscal and monetary measures, low or zero interest rates and quantitative easing that policy makers have relied on to engineer a recovery. The difficulty of an exit is complicated by the size of the intervention as well as the fact that economic activity and financial markets are heavily reliant on these support measures.

Independent: – There’s still life in the bond market. – It’s been a 30-year party for bond investors, but there are fears the hangover is about to kick in. Even bond fund managers admit that perhaps it’s time for investors to grab their coats.

 

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