After long years of rates near zero, fixed-income investors are happy to see opportunities as rates on treasuries return to normal. Vivien Lou Chen reports in MarketWatch: Stock and bond markets reacted strongly to the minutes from the Federal Reserve’s July 25-26 meeting on Wednesday because of the signal being provided about policy makers’ views on long-run real interest rates, according to Colas. The minutes suggest the policy-setting Federal Open Market Committee “wants to see higher real yields across all maturities to slow growth and contain inflation,” he said. “All this will … [Read more...]
Investing Mistakes to Avoid: #11 FOG
Your Survival Guy knows a thing or two about getting stuck in the fog. When I was a kid sailing with my family, we were heading home after a weeklong trip, and about halfway through Buzzards Bay, we were engulfed in fog. We held our course and, before long, entered a mooring field holding no boats that we recognized. Realizing land wasn’t far, and that we were in the wrong harbor, we decided not to press our luck. We tossed out the hook and spent a comfortable night right there. The next morning, after the fog cleared, we learned we were a few harbors west of our own. Not long after, a … [Read more...]
World Bond Rates Highest Since 2011
The U.S. 30-year bond yield is the highest it's been since 2011, and globally government bond yields are at 15-year highs. Garfield Reynolds and Michael Mackenzie report in Bloomberg: Global government bond yields extended their climb — with the US 30-year reaching the highest point since 2011 and other benchmarks returning to 2008 levels — as resilient economic data challenges the view that central banks rates are peaking. In early US trading Thursday the 30-year Treasury yield rose as much as seven basis points to 4.42%, slightly exceeding last year’s high. It was below 4% as recently as … [Read more...]
Can America Avoid a China Recession?
If China's economy falters, can America avoid the same fate? China's economic data has been showing weakness, and it's gotten so bad that the country has stopped publishing certain economic data. The economy in China has gotten so bad that Xi Jinping, China's president, has asked the country for "patience." Joe McDonald reports in the Associated Press: Chinese leader Xi Jinping has called for patience in a speech released as the ruling Communist Party tries to reverse a deepening economic slump and said Western countries are “increasingly in trouble” because of their materialism and … [Read more...]
There Is No Miracle More Powerful than This
If you want to get a bird’s eye view of how hard your money works, spend a few minutes reviewing my piece Rich Grandchild, Poor Grandchild. When you start saving early, good things can happen. It’s probably why you’re able to invest today for the retirement you deserve. Accumulating money is work. Literally. You get up every day and do it. You go to work and save ‘til it hurts. Investing money in retirement is a different kind of work. You get up every day and wonder what it’s done for you lately. The reason Your Survival Guy recommends living below your means is because it gives your … [Read more...]
Who Are the Robo-Advisers Working For?
Recently, I was asked about robo-advisors: You set up an account with a low minimum, answer a questionnaire, and an algorithm invests you in a basket of mutual funds, ETFs, and/or stocks. The robos save money on phone reps, have a big marketing spend, and a neat-looking website. But what if there’s a problem? A couple of years ago, when stocks were down 1,600 points, Bloomberg reported that the websites of robo-advisers Wealthfront Inc. and Betterment crashed. This is one of the MANY reasons robo-advisors will NEVER work for investors–NEVER. What a SHAM. Also, it’s been my experience … [Read more...]
RAGE Gauge August: This Market is Foggy
Your Survival Guy’s latest RAGE Gauge is in, and before I get into this month’s reading, I want to revisit my piece from yesterday on getting stuck in the fog last weekend. I could have stayed on the dock. But I’m confident in my ability to navigate in the fog because I’ve done it many times, and I know how I like to navigate—carefully from mark to mark. I have electronics. The radar and chartplotter. But I also know not to depend solely on them to safely find my destination. The technology is outstanding. But I’ve been in enough situations to know nothing beats my own two eyes and taking … [Read more...]
These Treasury Yields Unseen for Years
Your Survival Guy can live in a four percent world. Take a look at today’s yield curve. The 10yr Treasury is at levels we haven’t seen since 2008. Action Line: Don’t let market timing get in the way of well-laid plans. Let’s talk. P.S. Quentin Webb discusses the market’s view of treasuries recently in The Wall Street Journal, writing: U.S. Treasury yields are testing highs last seen in the 2000s, back before the global financial crisis ushered in the era of super-easy monetary policy that the Fed is now rapidly unwinding. If the 10-year yield ends the day above 4.231%, … [Read more...]
The Competition Between Stocks and Bonds
Let’s not forget this is absolutely a competition between stocks and bonds. The S&P 500 is top-heavy in a handful of stocks that rule the roost, and bonds are offering yields you can sink your teeth into. Don’t let looking for the perfect timing get in the way of good yields on bonds. Action Line: Click here to subscribe to my free monthly Survive & Thrive letter and become a Survivor. … [Read more...]
Note to Self: Don’t Wind Up on the Rocks
Your Survival Guy got caught up in some fog Saturday afternoon halfway through our trip from Newport to Mattapoisett. All was clear while preparing to leave the dock, but I heard the fog horn faintly in the distance. We were cruising right along, and then, on the horizon, we could see the dark fog cloud rolling in. I turned on the radar which overlays the chart plotter map, and had a few minutes to get my bearings just using the electronics. One of my biggest fears in fog is other boaters. Sometimes all the technology in the world isn’t enough. I relate it to SUVs with four-wheel drive … [Read more...]
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