Are you wearing rose colored glasses? Take them off and you might see Bifurcated Markets, Tariffs, and Tempered Earnings ExpectationsOctober 9, 2018
“These rose colored glasses
That I'm looking through
Show only the beauty
'Cause they hide all the truth”
-John W Conlee
We recently shared several charts showing that U.S. High Yield bond yields are at the low end of their historical range and thus their prices are at the top of their historical range. Yes, both can stay at current levels for extended periods…or not. Similarly, the Emerging Market bond trade seems long in the tooth. For those who want it all, here is a chart of Emerging Market high yield bonds. They too share extremely low yields based on historical ranges. Looking at this chart, is it more likely that these yields will fall ...
Active vs. Passive Management
Active management can be thought of as any strategy that uses human discretion to decide what the portfolio should own. The manager(s) generally employs some combination of fundamental, ...
On March 17th, we wrote about the size and makeup of the Fed’s balance sheet and our concern if it were to unwind. Little did we know the latest Federal Reserve meeting minutes would disclose the new desire by the Fed governors to shrink their balance sheet.
3. The Corporate Bond Bubble
2. The Overstimulated Monetary Base
1. The Fed and its Balance Sheet
For those who are unknowing of the potential for large losses in the bond market, please see below. About half of this loss is post-election market movement. Assuming the markets are flat to the end of the month, long maturity bond funds will likely see losses around 10%.