At The Wall Street Journal, Charley Grant warns investors that Tesla is just as risky to own as it is to bet against. He writes: After a recent pullback, its market capitalization now merely hovers around $90 billion, about the combined value of Ford and General Motors. Projections of Tesla’s future market dominance in China have eclipsed the 8% decline in total revenue that it reported for the third quarter. Analysts expect a second consecutive quarterly profit when Tesla unveils full-year results and another stock surge is certainly possible if that proves correct. But such exuberance … [Read more...]
About Jeremy Jones, CFA
Is the Fed Boosting Risk? An Insider Says Yes
Federal Reserve Bank of Dallas President Robert Kaplan is raising alarm bells over the Fed's recent injections of liquidity into financial markets. Kaplan said recently that it is wise to acknowledge that “Many market participants believe that growth in the Fed balance sheet is supportive of higher valuations and risk assets." The Wall Street Journal's Michael S. Derby reports: “Many market participants believe that growth in the Fed balance sheet is supportive of higher valuations and risk assets,” Mr. Kaplan told reporters after an appearance at the Economic Club of New York. When it … [Read more...]
Could Gold Rally to Record High in Response to Stimulus?
Could the price of gold rally to a record high of over $2,000 as central bankers print more money? According to Greg Jenson of Bridgewater Associates, the answer is yes. Jennifer Ablan reports Jenson's prediction in The Financial Times: Mr Jensen, who helps oversee more than $160bn at the Connecticut-based group, told the Financial Times he believed the Federal Reserve, in particular, would let inflation run hot for a while and “there will no longer be an attempt by any of the developed world’s major central banks to normalise interest rates. That’s a big deal”. At the same time, … [Read more...]
You Want to Hire Who as Your Financial Advisor?
The Financial Times reports that Vanguard’s assets under management have surged past $6 trillion for the first time. In the investment business, the biggest rarely means the best. Big funds and big investment managers have fewer opportunities to choose from, and bigger funds are harder to maneuver. Do You Think Your Business Really Matters to Vanguard? Even if you have a $1 million portfolio with Vanguard, your business means almost nothing to the firm. They have $6 trillion under management. There are 5,999,999 other $1 millions in $6 trillion. Think about that the … [Read more...]
Is This the Last Dance for Glamour Stocks?
Great piece by Jason Zwieg in this weekend’s WSJ. Zwieg offers some solace to investors who still think financials and fundamentals are a more meaningful indicator of corporate performance than fantasies and fairytales about the future. Emphasis is ours. Pop quiz: Name the giant store whose customers scoff at whatever goes on sale, but flock to buy whatever costs the most. It isn’t a supermarket. It’s the stock market—especially over the past decade, when value stocks have moldered in the bargain bin. Such companies, trading at low prices relative to their earnings, net assets or other … [Read more...]
Ginnie Mae (GNMA) Bond Yields
What do Ginnie Mae (GNMA) bonds yield? The table below lists the yields on two of the major Ginnie Mae (GNMA) indices as well as the latest SEC yield on some of the top Ginnie Mae (GNMA) dedicated funds. A note of caution when you are looking at yields on Ginnie Mae 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 and Barclay’s Ginnie Mae (GNMA) indices. Description Symbol Yield as of 11/30/2019 Yield as of 12/31/2019 Merrill Lynch Ginnie Mae … [Read more...]
Corporate Bond Yields: What You Can Earn Today
Corporate bonds are a good place to pick up yield in the bond market. With yields on government bonds in much of Europe and Japan in negative territory, corporate bonds offer a higher-yielding alternative. Corporate bonds are a broad universe, though. There are investment-grade corporate bonds, junk bonds, foreign corporate bonds, hybrid corporate bonds, and floating-rate corporate bonds among other variations. Investment-grade corporate bonds are the largest part of the corporate bond market. How Much Do Corporate Bonds Yield Today? We break the investment-grade corporate bond … [Read more...]
Think Your ETF Portfolio is Diversified?
If you are buying ETFs because you hope to build a more diversified portfolio than you believe you can get by purchasing individual stocks, this chart is for you. The chart below from Bespoke dispels the myth that ETFs always provide adequate diversification. The chart shows the weighting of the top two holdings in each S&P 500 sector. Like many ETFs, the S&P 500 sector ETFs are market-capitalization-weighted. As you can see, the top two stocks are driving the ship in most sectors. In the Communications Services, Energy, and Technology sectors, the top two stocks account for about … [Read more...]
If it Walks like a Duck…
In an October speech after the Fed decided to start expanding its balance sheet once again under the auspices of fixing problems in the repo market, Fed Chair Powell said, I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis. Neither the recent technical issues nor the purchases of Treasury bills we are contemplating to resolve them should materially affect the stance of monetary policy, to which I now turn. During the Q&A session following … [Read more...]
The Highest Yielding Dow Stocks
For investors looking for high-yielding dividend stocks to buy, the highest dividend payers in the Dow Jones Industrial Average (DJIA) is a common starting point. Below is a list of the 10 highest yielding Dow stocks. Today, the average yield of the 10 highest-yielding Dow Jones Industrial Averages stocks is 3.92%. You can see their individual yields in the table below. Click the company name for more information on each stock. To view the entire list of Dow stocks ranked by yield, click here. Highest Yielding Dow Jones Industrial Average Stocks Company NameDividend YieldDow … [Read more...]
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