Written by David Fabian, April 18th, 2017
Treasury bonds continue to be a stalwart position among income investors and those who opt for credit quality over yield or other characteristics of fixed-income. Treasuries benefit from the highest credit rating possible and are backed by the full faith of the U.S. Government. They are also the most directly susceptible to interest rate fluctuations and would perform poorly during a secular period of rising rates.
One attractive way to own Treasury bonds is through a diversified exchange-traded fund (ETF). This vehicle creates the flexibility to directly hone in on a certain maturity or index methodology in an extremely low-cost and liquid package.
Read the complete article on NASDAQ.com
Written by David Fabian, November 18th, 2016
Everywhere you look now, someone has an opinion about the direction of the markets under a Trump presidency. There is speculation on everything from the impact of his trade policies to the potential of further deficit spending and legislative changes. These factors have coalesced to send many sectors of the stock and bond markets into a tizzy as investors grapple for positioning. Read more
Written by David Fabian, August 23rd, 2016
In 2014, the Securities and Exchange Commission (SEC) legislated new guidelines concerning the function of money market funds. These rules will finally take effect in October 2016 as a response to the liquidity issues that several banks and fund companies experienced during the 2008-2009 financial crisis.
At the core of the new rulebook is a stipulation that certain institutional money market funds will now be subject to a floating net asset value (NAV). This removes the prior “stable value” of a $1.00 NAV that has been the standard for decades. During times of stress, these subjected funds can also charge redemption fees to help stem a potential outpouring of assets.
Written by Michael Fabian, March 18th, 2016
For those that follow Treasury bond fluctuations closely, it’s been hard not to notice the persistent under performance in Treasury Inflation Protected Securities (TIPS) versus nominal coupon bonds over the last several years. It’s no surprise that inflation has been running below expectations for a long time, despite a steadily falling unemployment rate and a generally improving economy. Nevertheless, from a technical and fundamental perspective, the wide divergence that has formed between TIPS and fixed-coupon bonds can’t persist forever. Read more
Written by David Fabian, February 12th, 2016
Hedging your portfolio is a strategy that is often employed by those who want to take out some downside protection against the possibility of a market drop. The most successful application of this process is to reduce your exposure in highly appreciated long positions with the assets that demonstrate inverse or non-correlated properties to the broad equity market. Read more