Income investor dashboard for July 2011

Wow! That was truly a crazy last week of the month. A great week for stocks and a not so great week for bonds. This is when zooming out and looking at market changes over a monthly period helps to add some perspective. Having said that lets jump right in to this month’s Income Investor Dashboard. Prices and yields are as of the end of the day June 30th so they do not capture the increase in the markets we saw today.

Here is the Dashboard for July. Many of the ETFs declared their quarterly dividends this month so the yields changed independent of the price changes for the ETFs. The yields in the July column are directly from Morningstar and match what they show on their site. The change in the yields from July to June is thus a combination of yield changes and price changes so for this month I left out the percentage changes as they were not indicative of just the price changes in the ETFs.

Despite the end of the month rally most of the equity ETFs still finished the month a little cheaper than the previous month but not by much. Similar story for bonds this month with the long bonds increasing in yield the most. Munis, on the other hand were flat for the month and the closed end fund muni ETFs continued to rally. Comparing to the 10 year treasury here is how investment grade and high yield bonds currently stack up.

Both investment grade and high yield became a little less expensive relative to treasuries but they still remain more expensive than their historical average as the graphs show. As for MLPs;

MLPs are now less expensive than their historical average with a yield of 6.5% for the sector. Not a bad place for new money right now. Of course, they could also get cheaper.

Lastly, a note on the recent changes in government bond yields. The recent increases shown in the bottom of the table are occurring more in the belly of the curve than at the very short end and long end. This has caused the 10yr-2yr spread to widen out from last month which continues to bode well for mortgage REITs.

That’s all for this month.

Full Disclaimer - Nothing on this site should ever be considered advice, research or the invitation to buy or sell securities. These are my personal opinions only.

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