FMD Capital Management

Income Investing

Your Bonds Aren’t Crashing

Written by David Fabian, February 14th, 2018

The inherent fear of rising rates is something that income investors have dealt with through every major market cycle.  Many have stubbornly adhered to the notion that the Fed’s monetary decisions and other fiscal shenanigans in the U.S. will ultimately cause a severe disruption in the bond market.  Additionally, there has always been this chronic concern that inflationary pressures lurk just around the corner and will ultimately put pressure on bond prices.  Read more

Energy ETFs Fall Hard To Kick off 2018

Written by David Fabian, February 14th, 2018

The buzzword of the year may well be “volatility” after the swift beating that stocks have taken in the early days of February.  The profound absence of any tangible downside price action over the last eighteen months has left many investors over-exposed and under-prepared for a correction.  That may well be the spot that energy investors have found themselves in over the last several weeks as the pernicious selling engulfs many funds in this sector.

The Energy Select Sector SPDR (XLE) had just found its footing in the second half of 2017 as surging commodity prices boosted demand for oil and gas stocks.  That rally has now come under fire as XLE has dropped 16% from high to low this year and now trades 8% below its starting point for 2018.

Read the complete article at NASDAQ.com

Should ETF Investors Worry About Their Interest-Rate Sensitive Stocks?

Written by David Fabian, January 24th, 2018

Stocks have come roaring out of the gate to start 2018 as the bull market extends to unprecedented heights. Momentum and volatility-agnostic investors have been treated to a continuation of the same strong trends that dominated last year’s markets. Yet, even with so much enthusiasm spread among the major diversified indices, there remains lackluster sentiment for many interest-rate sensitive stocks and sectors.

Interest-rate sensitivity has traditionally been the realm of fixed-income, where bond prices and bond yields are negatively correlated. Nevertheless, there are many areas of the U.S. equity markets that also key in to the fluctuations of U.S. Treasury yields. The foremost of which are utility, REIT, and financial stocks.

Read the complete article at NASDAQ.com

Comparing Bond ETFs: Same Yield, Less Interest Rate Risk

Written by David Fabian, January 16th, 2018

The two biggest risks that bond investors face are rising inflation and rising interest rates. This dual threat has been moderated for many years now as global central banks set accommodative policies to boost asset prices. The ultimate result of which has been tame inflationary metrics, steady jobs growth, corporate earnings expansion, and firm declines in Treasury yields.

The more recent roundabout (or tightening) of Federal Reserve fiscal policy has created a unique environment for bond investors to evaluate. Namely a flattening yield curve, whereby the 2-year U.S. Treasury Yield is sharply rising compared to its 10-year and 30-year counterparts.

Read the complete article at NASDAQ.com

Watch For These Key ETF Milestones In 2018

Written by David Fabian, December 06th, 2017

While 2017 is not quite yet in the books, some investors are already looking ahead to what the New Year might have in store for their portfolios. ETF investors have been repeatedly rewarded over the last decade with fresh and innovative funds, lower costs, and better liquidity. They are also becoming more discerning over the expenses and quality of their holdings rather than falling for marketing gimmicks or advisor distribution pipelines.

This foresight will come in handy as these products become even more mainstream in the coming years and 2018 will certainly bring many interesting funds to market. The following are some ETF insights to look out for in the New Year.

Read the complete article at NASDAQ.com