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Fixed Income
For those of you that have been reading this newsletter, you’ll know that we have been writing about why most bonds have made so little sense to invest in over the last few years, given the historically low yields and risks from higher rates and inflation, which has now come to fruition.  The average bond...
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Yesterday’s CPI report showed prices up 7.9% YoY, which was the highest reading since 1982.  Even more concerning, this was before the impacts of the Russian/Ukraine war is reflected in the data.  Market volatility is exceptionally high and pessimism is quite pervasive.  There are legitimate fears that inflation in excess of wage growth could cause...
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Today we got the latest update on the Consumer Pricing Index (CPI) and it was a doozy, showing annual inflation of 7.5%.  As you can see on the image above, the Real Fed Funds Rate (Fed Funds Rate Minus CPI) is now a negative 7.4%, which is the lowest since 1974.  This means that money...
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  Interest rates are without a doubt one of the most important drivers of investment returns, if not the most significant.  Warren Buffett has mentioned in the past that there is almost a reverse gravitational impact of interest rates, in that lower rates tend to raise equity valuations.  Conversely, higher interest rates tend to pressure...
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I hope that you all had a wonderful Thanksgiving holiday.  What a crazy year it has been.  Surely, these next few months will be historic as the vaccine rollout and distribution takes center stage.  It would seem that these combined with better treatments such as the Regeneron and Eli Lilly AB programs, should be able...
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As we retire or get closer to retirement, the need to generate investment income takes on a much greater importance.  Historically, it was much easier, as one could divert a larger portion of their stock portfolio into bonds, while capturing yields that might vary from 5-10%.  Those yields, combined with the nearly 40-year bull market...
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Many investors, especially retirees, understandably are focused on generating income from their investments.  Historically, bonds have been one of the best ways to achieve that, with less volatility than equities.  While history can be a fantastic guide to what can potentially happen in the future, looking at recent data on fixed income returns could not...
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Fears of the Coronavirus have caused bonds to rally, resulting in lower interest rates once again.  The Tech Bubble has continued to grow, while value stocks have been left in the dust the last few months.  While this can be frustrating over the short-term, over the long-term, it creates compelling opportunities to create substantial wealth....
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2020 is shaping up to be a strange year.  This Coronavirus has a region in China, far larger in population than New York city, on a complete lock-down.  There are zombie cruise ships patrolling the waters in a state of full quarantine, with no countries wanting to take the risk of allowing them in to...
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Over the weekend, I was reading Barron’s, and there were numerous articles about obtaining enough income in retirement.  The recommendations vary from buying dividend stocks, annuities, and/or bonds.  All of these strategies offer various challenges and risks.   Buying dividend stocks offers income and the potential for capital appreciation.  The problem is that many of these...
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