Japan’s Central Bank Splits Over Easing Program (WSJ) 295 Funds Bailed on Apple at Exactly the Wrong Time (Bloomberg) Nonmonetary Problems: Diagnosing and Treating the Slow Recovery (Kashkari) US finance groups call for Brexit ‘transition period’ (FT) Searching for a Political Compromise in Venezuela (Stratfor) … [Read more...]
Archives for September 2016
What to Do about Vanguard GNMA: Part II
What should you do about Vanguard GNMA? Let’s change the question. What should you do about your house or an investment property when there’s a change in price? Answer: not much. "Think about your GNMA fund as you would a piece of income property. For a landlord, it’s a waste of time to worry about the price you could get for the property from month to month. The monthly rents are what pay the bills. GNMA is your triple-decker. Why sell it? You need the rent money.” I wrote that to you back in March of 2013. And guess what GNMA did? Well, it took a nose dive of course. Sorry. Yup, it kept … [Read more...]
Is Switzerland’s Amazing Negative Interest Scheme Working?
Swissinfo.ch alerts investors worldwide to a pretty astounding current outcome: The Swiss still refer to the day of the “Frankenschock”. On January 15 last year, their stable economic lives were shattered by news the Swiss National Bank (SNB) had abandoned its cap on the super-strong franc’s value against the weak euro. To deter investor inflows, the central bank instead pushed its main policy interest rate even deeper into negative territory – to minus 0.75%. Almost two years later, the affluent Alpine state’s financial system still functions despite the most negative interest rates in … [Read more...]
Agriculture’s Amazing Frenzy of Deal Making
The Wall Street Journal explains the cost problems of GMO seed and the huge deals being consummated in the agricultural sector. The dominance of genetically modified crops is under threat. Since their introduction to U.S. farms 20 years ago, genetically engineered seeds have become like mobile phones—multifunctional and ubiquitous. Scientists inserted genes to make crops repel insects, survive amid powerful herbicides, survive on less water and yield oils with less saturated fat, in turn eliminating farmers’ amateur chemistry. The U.S. Department of Agriculture estimates this year that … [Read more...]
Worthy Reads: What Uber’s Like Without Someone Behind the Wheel
Why the Bank of Japan May Raise Rates Even as It Cuts Them (WSJ) Paradise Lost: Why the Good Times Are Over for Global Bonds (WSJ) Holiday hiring shows the clear shift toward e-commerce (MarketWatch) What Uber's Like Without Someone Behind the Wheel (Bloomberg) Bank capital and dividend externalities (BIS) … [Read more...]
Are You One of the Investors Fleeing Equities for Bonds?
Today's ICI report on long-term flows to mutual and exchange trade funds showed a continuation of the flight from equity funds and the charge into bond funds that has been underway since early this year. … [Read more...]
The Revealing Truth About Funds, Mutual and Hedge
Mutual funds have seen their heyday, which means they should begin a decades-long slow decline. Hedge funds have gotten away with savaging minimal investment acuity investors with a 2% and 20% fee basis for decades, and now have been exposed for the “Robber Barons” they are. The flight to reality is on. The hedge crowd figures to become an increasingly unpleasant scourge at tony suburban country clubs. Oh well, better days for a more enlightened investor lie at hand. Back in 1989, with the benefit of inference reading and 25 years of on-the-ground experience in the international investment … [Read more...]
Retirement: Imagine Your Someday
Here are the top five reasons why people retire according to a survey at Fidelity.com: Leisure, Stress at Work, Grandchildren, Hobbies and Travel. But what about the when? The “when” people retire is a different matter. That has more to do with money. As if we needed a survey for that! "Spend less, save more," you know the song. Here’s some advice you can use. Get out of debt. Pay off your mortgage. It’s simple, yet effective. Stress is a killer. Trust me, I speak to retirees for a living. Getting out of debt creates a lot of peace of mind. The less you have to worry … [Read more...]
Vanguard’s Best Performing ETFs
Here's a shocker, and a stomach churner for all those who abandoned bonds completely for what were believed to be the greener pastures of the stock market. [inlinetweet prefix="" tweeter="" suffix=""]Three out of the five best performing Vanguard ETFs YTD are bond ETFs.[/inlinetweet] That's right, boring ole bonds, not stocks, are this year's big winners. The Vanguard Extended Duration ETF is up 18.48% YTD. The Vanguard Long-term Bond ETF and the Long-term Corporate ETF are up almost 14%. The only two equity funds that made the top five were Energy and Utilities--both were laggards last … [Read more...]
This Mutual Fund is a Ticking Time Bomb
We are more than seven years into an economic expansion, but short-term interest rates are just a fraction of a point higher than they were during what many economists like to dramatize as a narrowly avoided depression (prevented by their heroic actions, of course). The Fed’s strategy of keeping rates in the tank to meet its ever shifting “economic goals” has created one of the greatest yield-reaching episodes in financial market history. You have traditional bond investors trying to substitute higher risk dividend income for full-faith and credit pledge interest income. In bonds, junk has … [Read more...]
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