In this month’s video, I look at the technical trends developing in growth versus value stocks. Chart review includes analysis of large-cap, small cap, international, Treasury bonds, and high yield bond ETF prices. Observations of risk and reward are noted throughout, with an emphasis on trend following and sensible portfolio management. Recorded on May 31, 2017.
As we find ourselves in the seasonally weakest time of the year, most investors are hoping to see 2015 come to a close with at least a marginal gain in risk assets. Yet, for closed end fund (CEF) investors it’s been a tough pill to swallow after such vigorous upside momentum during the first half of the year. Unfortunately, most funds have given back their ample headway and then some, squarely putting total return figures in the red for the year. Read more
Could the high yield bond market be sending a precursor message to the Fed, signaling them not raise rates until 2016?
While that’s a notable possibility, the market just doesn’t seem hungry enough to gobble up excess inventory from record outstanding high yield debt levels. Especially with intermediate to long-term fundamental challenges such as the imminent probability of a short-term interest rate hike and a barbell shaped rollover calendar centered in the 2019-2020 time frame. Read more
Investors that were early to identify the attractive valuations following the volatility in emerging market bonds in early 2014 are still sitting atop a pile of gains, yet in recent months new investors haven’t experienced the same steady uptrend.
Partly due to the slack in the credit markets domestically, bonds in emerging markets have largely moved sideways in a 2% range over the past few months. The seemingly endless uptrend in the U.S. dollar has been weighing heavily on retail interest for foreign assets, even those that are in fact already denominated in U.S. Dollars. Read more
High yield bonds are one of the worst performing bond sectors so far in 2014. But with so many closed end funds (CEFs) relying on them to lever up cash flows from borrowed capital, what should investors expect between now and year end? Late 2013 and early 2014 saw resurgence in the demand for high income assets following the massive rise in interest rates. Yet with rates now back near 2% and the Federal Reserve’s bond buying program completely runoff, current high yield bond prices present chances for renewed investor demand in the CEF space. Read more