Looming Losses in Bonds?

Posted on February 21, 2012 by bernest

         It’s hard to imagine, but I started in the investment business in late 1981.  Since that time, my hairline has receded at about the same pace as the yield on Treasury Bonds.  Though I don’t know the exact number of hairs I’ve lost, it’s easier to measure the decline in bond yields.  In September 1981, the yield on a 10-year U.S. Treasury was 15.84%.  Today (2/13/12) it is 1.99%.

     What has this meant to long-term bond investors during this time span?  Obviously, it has most often resulted in lower yields when their bonds matured and they reinvested the proceeds in new bonds.  But while they owned their bonds, they have frequently seen an increase in their bond holdings’ current market value.  (Remember, when rates fall, the market value of long-term bonds rise.)  Continue reading →

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Market Outlook

Posted on November 29, 2011 by dharrison

“The lamps are going out all over Europe.  We shall not see them lit again in our time.”  Though the average man on the street probably could not tell you that Sir Edward Grey, British statesman, intoned this on the eve of World War I, most folks today feel his gloomy sentiments apply to the current state of affairs in Europe and their possible impact on our economy.
But are there any reasons to be optimistic about the stock market today?  Raymond James Chief Investment Strategist Jeff Saut believes “stocks will continue to grind higher, provided we don’t talk ourselves into a recession” and in his commentary last week, “The Joy of Cooking”, gives a half dozen reason why: Continue reading →

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The Bottom for Home Prices?

Posted on November 9, 2011 by bernest

    When was the last time you heard anyone – friends, investment strategists, financial journalists or talking-head pundits — predict an upturn in home prices?   I think I can say without too much exaggeration that most folks have resigned themselves to seeing no increase in the value of their home for the foreseeable future, perhaps forever. Continue reading →

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Imminent Recession?

Posted on October 31, 2011 by bernest

And yesterday the bird of night did sit
Even at noonday upon the marketplace,
Howling and shrieking. When these prodigies
Do so conjointly meet, let not men say
“These are their reasons; they are natural”;
For I believe they are portentous things
Unto the climate that they point upon.                                                        

                                                      Julius Caesar

The airwaves today are certainly filled with “portentous” commentary warning of the imminent arrival of the second leg of a double-dip recession.  (Shakespeare used “portentous” to mean “ominous, foreboding some calamity”)  Real Clear Markets, a popular website that aggregates financial commentary from major news sources and blogs, is now “howling and shrieking” with the following headlines: Is Another Financial Panic On the Way?, Is a Repeat of 2008 Coming?, The Alarming Decline in Productivity, Why Investors Can’t Trust Anything From Europe, Is Smart $$ Right?  Europe’s Too Big, MUST Fail? ( To be fair to Real Clear, they also have a headline titled Bears Outnumber Bulls, and that May Be Good.) Continue reading →

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