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Higher Interest Rates Could Hammer Stocks
(Main Content/blog)
... worth looking at the potential impact on markets. The effect of rising interest rates on bonds is fairly straightforward: Rising rates make existing bonds less valuable, since newly issued ones will pay ...
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Time to Make a Shopping List
(Main Content/blog)
... part of the reason they can be so much more profitable than bonds over extended periods. To collect what we call stocks' risk premium, we have to be patient: Over the long term, the market's rise has always ...
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Where to Invest Now? It's Tricky
(Main Content/blog)
... the proceeds, there's no obvious place to reinvest that money. High-quality bonds are unappealing because of their low yields--10-year Treasuries are yielding just 1.3%. And the possibility of rising ...
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How to Invest for Inflation
(Main Content/blog)
... can make a difference. While investors are rotating to value stocks, and selectively holding on to growth stocks, one area to be extremely cautious about is long-term bonds. Inflation ...
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Rising Inflation and Interest Rates: What to Do
(Main Content/blog)
... predicting that higher future prices of goods and services will make bonds' fixed income payments less valuable. Accordingly, bonds are trading at lower prices. Bonds' yields move in the opposite direction ...
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Capital Gains Tax Hike a Possibility
(Main Content/blog)
... earning capital gains above $1 million per year. Long-term capital gains — the sale proceeds from stocks, bonds, mutual funds, real estate and other investments that are owned for more than a year — ...
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What the Elections Mean for Your Investments
(Main Content/blog)
... In the year after the opposition party wins the presidency, markets tend to rise—and they rise a bit more sharply when the incumbent party remains in power. (Bonds, by the way, tend to slightly outperform ...
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The Coming Corporate Debt Cliff
(Main Content/blog)
... if economic growth continues to slow. And as they look to issue new bonds to pay off the expiring ones – this is the $4-trillion debt cliff -- they may find fewer investors willing to lend to them. That's ...
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Bond Yields Are Low – So Where Do You Find Income?
(Main Content/blog)
... the rate of inflation. As my clients' bonds mature, I'm advising them to consider some other opportunities with more attractive yields. One is an old standby – high-quality dividend-paying stocks. I ...
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Interest Rate Cuts: Too Little Too Late?
(Main Content/blog)
... It's gotten an extra boost from the anticipated Fed rate cuts. But the bond market, which is far larger than the stock market, tells a different story. Investors have been piling into long-maturity bonds ...
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Should You Invest in Real Estate?
(Main Content/blog)
Real estate is often peddled as a get-rich-quick investment—and that lures some people in, and it turns some others off. The truth about real estate is that, like stocks and bonds, it can be a solid ...
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A Smart Investing Move to Start the Year
(Main Content/blog)
... type (stocks and bonds, for example) after they've been doing well, and buying them after they've been doing poorly. Against the current backdrop, where stocks are down 5% from a month ago, that might ...
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What the Market Plunge Means for Investors
(Main Content/blog)
... rates are bad for bond investors too. That's because the issuance of new bonds at the higher rates decrease the value of the old, lower-interest bonds investors may already own. As those longer-term bonds ...
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How to Invest in Bonds as Interest Rates Rise
(Main Content/blog)
Rising interest rates are said to be the enemy of bond investors--and since we're not in an environment of rising rates, many people are wary of buying bonds at all. However, there are good reasons to ...
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Be Smart About Your Tax Windfall
(Main Content/blog)
... have been great for stocks, and less good for bonds. As a result, if you originally had a 50/50 balance of stocks and bonds, those faster-growing stocks might now represent, say, 70% of your portfolio, ...
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Why ETFs Shouldn’t Dominate Your Portfolio
(Main Content/blog)
... say, adding bonds or foreign stocks to the mix. ETFs are like corks on the water, rising and falling with the tides. In a word, they're dumb. That's why my clients' portfolios include individual stocks ...
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When That High Yield is a Trap
(Main Content/blog)
<p>Yields are miserable out there: The S&P 500’s average dividend yield is just about 2%. The highest-rated 10-year corporate bonds, meanwhile, are paying just a bit more than that on average.</p><p> ...
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Opportunities But Also Risks in High-Yield Bonds
(Main Content/blog)
High-yield bonds are on a roll: The iShares U.S. High-Yield Bond Index ETF (ticker: XHY) is up more than 11% for the year. But before jumping on the bandwagon, be aware that there's lots of risk in high-yield, ...
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How to Invest in a Tough Market
(Main Content/blog)
It's been a tough several months for investment returns. Since June of last year, the S&P 500 index is down 12.24%, and bonds, as measured by the iShares Core U.S. Aggregate Bond ETF (AGG), are down ...
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Comparing Two Global Hot Spots
(Main Content/blog)
... has $70 billion of debt, which is equivalent to just 68% of its gross domestic product. The country is struggling to pay its debt, and its bonds have been moved to junk status. Unlike Greece, Puerto ...