Do you know why you own bonds in your portfolio? There are many reasons to own bonds but one of the biggest reasons historically is no longer a good one for many investors. Bonds are often held in portfolios to provide a safe and steady source of income, in particular Read more…
I’m not one of those bond bubble guys, mainly because I see eerie parallels between the Japanese experience and what the US is currently going through, but there is some crazy stuff going on in bond land. Late last week Microsoft (MSFT) sold 5 yr bonds at a yield of Read more…
OK. I know. I’m schizophrenic. In my last post I’m telling you why I think interest rates will stay low longer than people expect. Now, I’m going to explain how rates could go higher and why I’m hoping they do. One of the things that makes investing a challenge is Read more…
How many times a week do you read that interest rates have no where to go but up? That bonds are terrible investments and will be crushed by rising rates? And when was the first time you started to hear these stories? If you read pretty much any source of Read more…
I am often shocked at how much income investors will stick their neck out for yield. I spend most of my time looking at stocks so I often will note how I think investors are reaching for yield by going after utilities, REITs, etc… But if you really want to Read more…
Here we go again. Just as we hit the one year anniversary of Meredith Whitney’s famous, or more accurately infamous, muni bond call a new muni bond scare has surfaced. This time its the potential change to municipal bond’s tax status. Lets take a look at this latest fear and Read more…
Now that the first half of 2011 is over I wanted to step back and look at the performance of the sectors in the income investor dashboard. Lets look at the YTD performance of the dashboard and see if it offers any insights. Below are the 1H 2011 total returns Read more…
There was a recent post at the Times’ Bucks Blog about Longevity Insurance that caught my attention. I decided to run some numbers to see what returns are implied in the current prices of longevity insurance and compare that to the risks, and the alternative of just keeping your money Read more…
Just when you thought it was safe to back in the water…here comes the shark again…in this case muni bond ultra bear Meridith Whitney. Whitney is back in the spotlight again renewing her call for massive defaults in municipal bonds. Absolute Returns (AR) did a great screencast the other day Read more…
Cash is the best asset class for diversifying your portfolio. This goes against a lot of the traditional investment advice which most of the time recommends bonds as the diversifying asset class. This is particularly true for retirement portfolios. In this post I want to take a look at bonds Read more…
Here I go again. Bond bashing time. I think many income investors worried about risk mistakenly focus too much on the lower volatility of bonds as a risk measure. Volatility is only one measure of risk. On other measures of risk bonds perform just as poorly as stocks but with Read more…