3 Ways to Improve Your Bond Portfolio…Gross Says Recent Treasury Climb Misguided…Long Term Bonds Now? …and more!February 22nd, 2013 by Simon G
Investor Place: – 3 Ways to improve your bond picture. – As bond yields creep up, bond prices, which are inversely related, start to slide down — bad news for anyone with a large bond portfolio. So, are we in a “risk-on” bond market? Well, not exactly, but perhaps its time to think about and maybe move on some new thinking. Here are three ideas on how to act.
SFGate: – Pimco’s Gross says Treasuries climb this week was misguided. – Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said gains in Treasuries this week were misguided.
The Finance Buff: – Invest in long term bonds now? – Why have long-term bond funds do so well? Because interest rates came down. If you knew interest rates would come down you would be better off investing in long-term bond funds. But you didn’t know. So investing in long-term bonds could only be attributed to being lucky. Being lucky does wonderful things but counting on luck isn’t a viable strategy. What about now? Should one invest in long-term bonds now?
Learn Bonds: – 6 Bonds yielding more than twice the 10-year treasury. – In recent months, it has certainly been no easy task finding an abundance of corporate bonds worth buying. With that said, there are corporate bonds currently trading on the secondary market that carry investment grade ratings from both Moody’s and S&P and are yielding more than twice the 10-year Treasury. Here’s a look at six of them.
Money News: – Bill Gross: Treasurys advance this week for wrong reason. – Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Treasurys gained this week for the wrong reason.
Matt Erickson: – The Treasury run: Part II. – In part II of our series The Treasury Run, we take a closer look at the history of the Treasury market to see if there’s anything in history can teach us about the current state of the market.
Artemis: – Average expected loss and risk premium of the cat bond market in 2012. – Cat bond investors are prepared to take on much higher expected loss for no greater payment than they were receiving three years ago.
WSJ: – Andy Kessler: When interest rates rise, watch out. – The Fed’s inevitable Sword of Damocles could be brutal for bonds and stocks. Some of us recall the massacre of 1994.
WSJ: – Treasurys gain on tepid data, worries of less Fed support. – Treasurys gained Thursday as a batch of tepid economic data and concerns about a less-supportive Federal Reserve fueled a shift away from riskier stocks and into safe-haven bonds.
Bloomberg: – Puerto Rico set to boost worst-funded pension sans debt. – Puerto Rican lawmakers must beef up the government’s underfunded pension, which has less than 7 percent of needed assets, and may get their chance by next week, according to a legislative leader.
WSJ: – Bond investors wade back into Puerto Rico. – After shunning the island’s bonds at the end of 2012, some investors are returning, driving up the value of the debt. The lure: relatively high yields and a new administration that is promising to fix the fiscal problems that have dogged Puerto Rico for years.
Actuarial Post: – Will 2013 see a bond market price correction? – Interest rates have dropped to levels so low that further reductions are virtually impossible, and then as developed economies continued to struggle, enter QE. The resultant flood of cheap money has caused bond yields to fall and alongside that there has been a massive build up of debt, at both a sovereign and personal level. At some stage, in the long run, there has to be deleveraging and with that one might conclude a re-pricing in the bond markets. Could this happen in 2013, or is that time of reckoning still someway off?
Bloomberg: – Economists warn Fed risks losing control amid budget deficits. – Four economists, including a former Federal Reserve governor who has co-written research with Chairman Ben S. Bernanke, warned that losses from the central bank’s more than $3 trillion balance sheet could lead to the Fed losing control of monetary policy.
Financial Advisor: – No love for bonds. – Despite modest additional weakness in high-quality bonds. We believe a portfolio of high-yield bonds, bank loans, and intermediate bonds, with an emphasis on investment-grade corporate bonds and municipal bonds remains the preferred way to navigate a low-return environment in the bond market.
BusinessWeek: – Buying opportunity seen as history shows March loss. – Yields in the $3.7 trillion U.S. municipal-bond market are the highest in six months and may rise further in March — as they have in 14 of the last 20 years, according to data compiled by Bloomberg.
LA Times: – California will tap bond market for $2.7 billion. – California will sell $2.7 billion worth of bonds in March, tapping the bond market for the first time since its credit rating was boosted earlier this year.
ETF Trends: – Short-Duration bond ETFs eye money fund reform. – Short-duration bond exchange traded funds are beginning to look more attractive relative to money market funds as the federal government and regulatory bodies scrutinize vulnerability in the $2.7 trillion money fund industry.
Benzinga: – Forget the sequester, the bond market could shift at any time. – Retired hedge fund manager Stanley Druckenmiller, has warned that the government’s persistent budget deficits would eventually catch up with it. Although interest rates remained small for the time being, there would come a day when interest rates rapidly shifted. Druckenmiller cited Greece, where the bond market went from being fine to a full-on crisis in roughly two weeks.
Zacks: – Top 5 Highest yielding Zacks #1 ranked international bond mutual funds. – We share with you the 5 highest yielding Zacks #1 ranked international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.
— PIMCO (@PIMCO) February 22, 2013
“Bernanke said to minimize asset-bubble concern at dealer meeting” he specifically refuted concerns about mREITs & HY bonds
— David Schawel (@DavidSchawel) February 22, 2013
Troy discusses our belief that a Puerto Rico default on GO bonds is very unlikely due to constitutional protections provided to bondholders.
— Rochester Funds (@RochesterFunds) February 22, 2013