In this month’s video, I look at key trends developing in global stock and bond markets. Chart review includes analysis of large-cap, small cap, emerging market, high yield, interest rates, and gold prices. Observations of risk and reward are noted throughout with an emphasis on caution for new money at this phase of the rally in stocks. Recorded on March 7, 2017.
Love is in the air this Valentines week and many income investors are smitten with the returns of their high yield investments. The steady march higher in assets like junk bonds, preferred stocks, emerging market debt, and even leveraged closed-end funds has remunerated shareholders for their faith.
The poster child of this strength may well be the iShares iBoxx $ High Yield Corporate Bond ETF (HYG). This well-known fund, which invests in a passive index of high yield U.S. corporate debt, has gained more than 22% over the last year. That jump includes both price gains and income distribution over a 52-week period. It also bests every corner of the U.S. fixed-income sector map by a wide margin. Read more
Many investors are familiar with the GARP acronym, which stands for Growth At A Reasonable Price. The basic definition is to uncover stocks with reasonable fundamentals (undervalued) that have sustainable growth potential. The methodology seems sound and is essentially a way of saying – don’t chase price simply for the sake of recent performance.
On the flip side of that ideology is a perilous path that I have seen many investors tread in recent years. I call it “Yield at Any Price” or YAAP. Read more
The definition of value is a fierce debate among investors that seek to find intrinsically underpriced assets. Some stand their ground on historical fundamentals like price/earnings or price/book ratios. Others look strictly at price relative to other potential opportunities as a measure of opportunity.
The picture becomes even more complicated when you try to compare or overlay differing asset classes. Income investors often blur the lines between bonds, dividend paying stocks, and alternative income assets. Read more
The market has drifted lower in recent weeks as rising anxiety over a second Fed rate hike looms. I look at some of the top technical and fundamental reasons the market is behaving the way it is. Observations of risk and reward are noted throughout. Charts include: large cap stocks, treasury bonds, oil, energy sector, high yield bonds, REITs, and more. Recorded on May 19, 2016.