What do junk (high-yield) bonds yield today? The table below lists the yield of the Merrill Lynch junk bond index (High-Yield index), as well as the latest SEC yield on some of the top junk bond (high-yield) dedicated funds. A note of caution when you are looking at yields on junk bond funds; Like all SEC yields, these yields are based on the last 30-days of income generated by the fund. They are not directly comparable to the yields on the Merrill Lynch junk bond (high-yield) indices. Junk Bond Fund Description Symbol Yield as of 7/31/2018 Yield as of 8/31/2019 Merrill … [Read more...]
Archives for August 2019
Don’t Be Shaken Out of the Market on Bad News
There are many investment maxims worth repeating, but one especially important today is don’t be shaken out of the market on bad news. Those are the ten words of advice I gave to investors back in June of 1991 in the midst of a recession, and I haven’t found a reason yet to doubt their value. I told readers then: The best time to make money in the business cycle is when recession is in place. Interest rates always decline during a recession, just as they have in the present one. And the stock market always explodes with its biggest cyclical gains during the heart of recession. When was … [Read more...]
There’s No Owner’s Manual for Life, But Here’s One Strategy for Getting Through
You can feel the tension building up in my house as we head into Labor Day Weekend. Because for us, school hasn’t started, so the harsh, cold reality of the end of summer hasn’t hit us yet. But it will. Like a ton of bricks. At 6:00 am Thursday. That’s when my daughter begins her senior year of high school, and my son will be a sophomore. I’ve been singing “It’s the Most Wonderful Time of the Year” like the guy happily shopping for school supplies in the Staples commercial. They tell me to “just stop.” It’s hard knowing that at this time next year, my daughter will be off to … [Read more...]
Big Short’s Michael Burry Calls a Bubble in Passive Investing
Bloomberg's Heejin Kim and Myungshin Cho report that Michael Burry of "Big Short" fame has called out what he says is a bubble in passive investing. They write: Michael Burry shot to fame and fortune by betting against mortgage securities before the 2008 crisis, a trade immortalized in “The Big Short.” Now, Burry sees another contrarian opportunity emerging from what he calls the “bubble” in passive investment. As money pours into exchange-traded funds and other index-tracking products that skew toward big companies, Burry says smaller value stocks are being unduly neglected around the … [Read more...]
Young Americans Enjoying the Fruits of the Trump Economy
Americans aged under 35 are happier with their paychecks now than they have been since 2011. The Wall Street Journal's Lauren Weber reports: American workers under 35 report being happier with their paychecks than people over 55 for the first time since at least 2011, according to a new report from the Conference Board, a business-research organization that polls U.S. employees about workplace satisfaction. Overall, the share of workers satisfied with their paychecks rose to 46.4% in 2018, from 43% in 2017, an increase that mirrors federal data showing that wage growth accelerated in 2018. … [Read more...]
Is Liquidity Risk Lurking in the ETF Market?
Can ETFs maintain liquidity during times of market turbulence, or should rules be changed to allow ETF providers to pay market makers directly in order to ensure stability? That's the debate currently raging among market participants. At Bloomberg, Ksenia Galouchko reports on the problem and possible solutions: Some see a potential cure in a practice that’s commonplace from Italy to the U.K. but banned in America: ETF providers paying market-makers directly. The argument goes that conflict-of-interest concerns are misplaced -- and that traders under contract to keep transacting in passive … [Read more...]
Trade Peace? China Wants a Deal, Won’t Yet Retaliate
China wants to deescalate the current trade war with the United States and is looking for ways to do so. China's economy is slowing and the Chinese may be looking for a new strategy. Bloomberg reports: China indicated that it wouldn’t immediately retaliate against the latest U.S. tariff increase announced by President Donald Trump last week, emphasizing the need to discuss ways to deescalate the trade war between the world’s two largest economies. “China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent … [Read more...]
Can You Double Your Money in a Year? Fail at this, and You May Need To
Can you double your money in a year? Not many people can. But if you lost 50% of the value of your portfolio, that’s exactly what you would need to do just to make it back to even. If the prospect of trying to double your money sounds unappealing, I suggest you try not to lose that much in the first place. On this topic, I wrote in November 1994: Unchanged Since the Twenties According to BBC television, the Classic Coke bottle, the VW Beetle and AGA Cooker are the three finest industrial design achievements of the 20th century. You know the Classic coke bottle, you know the VW Beetle, … [Read more...]
Is Google Hostage to its Radical Employees?
Aside from labor negotiations, no one expects employees at big firms like General Motors or Coca-Cola to make much of a fuss. But at tech firms like Facebook and Google, it seems employees are embracing new political causes every other day, and dragging their companies into their activism whether executives approve or not. In the wake of President Trump's ban on travelers from some countries, Googlers, including leadership, became actively involved in the fight against the president's actions. Natisha Tiku details at WIRED the moment when Sundar Pichai and Sergey Brin spoke to Googlers … [Read more...]
Is Ring the New Neighborhood Watch?
Across America, 400 police forces have signed up to work with Amazon's Ring doorbell camera service. The deal gives the police access to surveillance footage from cameras mounted on people's doorways. The program has generated concerns from civil liberties activists, but has also helped create a new digitized "neighborhood watch." Drew Harwell reports for The Washington Post: The doorbell-camera company Ring has quietly forged video-sharing partnerships with more than 400 police forces across the United States, granting them access to homeowners’ camera footage and a powerful role in what … [Read more...]
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