After a buying spree, investors are wondering if Japanese investors will continue to buy U.S. Treasury bonds. Kate Guguid reports for the Financial Times: Japanese investors have piled into foreign debt this year — but analysts have warned that the revival in demand from one of the cornerstones of the US Treasury market is unlikely to last. Data from Japan’s ministry of finance reported this week showed that investors bought ¥4.1tn ($30bn) of foreign debt in February, the largest total since September 2021. That follows net buying of ¥1.1tn in January, and marks a pause in the dramatic … [Read more...]
Young Research & Publishing has been providing research and insights on bonds to institutional investors, corporate financial officers, business owners, and individual investors for over four decades. Richard C. Young started Young Research & Publishing in the 70s to publish the authoritative Young’s World Money Forecast, a 50-page monthly investment report for institutional land high net worth investors. Today, our research on bonds is geared toward investors in or nearing retirement who are looking to preserve and protect wealth.
Prepping for the Storm, Hiding in My Cozy Cave
You know I’m not interested in predictions. Yes, I hope the Bruins make it to the Stanley Cup and win it all. But I’m not betting my life’s savings on it. And most sports fans aren’t that reckless with their money. But when it comes to money and investing, the stories are crazy. If this was forwarded to you. Join the club. Sign Up here for my weekly email. It’s not unusual to hear horror-thons about betting the ranch on what turned out to be the next best thing. You know the stories as well as I do. And as Your Survival Guy, you should know by now I’m more interested in the return of … [Read more...]
“Do We Have Anything to Watch Tonight?”
Your Survival Guy and Girl are watching The Last of Us, streaming on HBO Max, an apocalyptic thriller drama based on a popular video game I never played. Then, one of its lead actors, Pedro Pascal (from Mandalorian and Game of Thrones), hosted Saturday Night Live the other weekend, and that caught my attention. How Your Survival Guy got into the show is in a manner that’s become all too frequent—in a panic. Listening to Alison Krauss while getting dinner ready, she asked: “Do we have anything to watch tonight?” I quickly pulled up Rotten Tomatoes and said this show gets a 97% and … [Read more...]
You Aren’t Getting These Yields from Your Bank Account
Look at these yields and see how far we’ve come over the past ten years, let alone twelve months. While banks pay you peanuts on your checking and savings, you can sink your teeth into treasuries (and investment-grade corporates). Remember, earning 4-5% on your lazy cash turns you into a compounding machine rather than an ATM for your bank’s lending team. Click the images below to enlarge them. Action Line: When you need help building a portfolio of individual treasuries and corporate bonds, let's talk. Originally posted on Your Survival Guy. … [Read more...]
Don’t Let Your Lazy Cash Eat all Your Food
With bond yields this high and considering you might have some lazy cash still sitting around doing nothing, isn’t it time to put it to work? It’s been a while since we’ve seen full faith and credit treasuries with yields this high. Let’s not get into the prediction business. Will the Fed raise rates further? Will it be forced to cut later this year? Not my concern. My concern is you building a portfolio focused on generating income. Action Line: When inertia gets in the way, the result could be another year of your lazy cash sitting on your couch and eating all your food. Instead, put … [Read more...]
Invest with Peace of Mind and Comfort
When will the coast be clear, dear investors? Let’s take a minute and think about that question. When investors were gobbling up tech shares at the beginning of this century, the crash that followed was brutal. The phrase "this time it's different," turned out to be wrong. Later that decade, the idea that real estate values "would always go up," also proved to be wrong. What seems to me to be a better bet is to make sure you have an anchor to windward in full faith and credit Treasuries to help get you through thick and thin. Action Line: Hope is not a strategy. Look for safety … [Read more...]
Muni Funds Cut Distributions
Muni bond funds run by Pacific Investment Management Company (PIMCO) have seen their distributions cut by as much as 45% after a jump in short-term rates droves up borrowing costs. As recently as October, analysts urged investors to jump into munis for their high yields with no regard for what might happen when rates rise. It turns out, reaching for yield can be dangerous. Bloomberg's Martin Z. Braun reports: Pacific Investment Management Co. cut monthly payouts on nine municipal bond closed-end funds by as much as 45% after a sharp jump in short-term rates increased borrowing costs. The … [Read more...]
How Your Survival Guy Feels about CDs
Investors in deep blue states can take pleasure in knowing interest income from Treasuries is tax free on a state and local level—but that’s not the case for CDs. Also, Treasuries are backed by the full faith credit pledge of the federal government. Again, not so for CDs. Action Line: This is a wonderful time of year to get working on your Treasury bond ladder. Let’s go. Originally posted on Your Survival Guy. … [Read more...]
Here’s an Investment You Can Sink Your Teeth Into
Happy November. Hope you made it a good month. When stocks are up 14% for the month, it’s hard not to. Why? Because it was the best month for the Dow Jones Industrial Average since January 1976, the same month Queen’s Bohemian Rhapsody topped the charts. That’s a lot of months in between then and now. What does that mean to Your Survival Guy? Not much. Because when prices are untethered, it’s a perfect time to remain focused on being an investor, not a speculator. In other words, to be paid dividends to invest in stocks. Look at what’s happening to the FAANG storyline, and you see what I … [Read more...]
Should You Index Bonds?
Ellen Carr writing in the FT lists four reason why bonds should be actively managed. First, true indexation — that is, investing in all the securities in an index — is impossible in fixed income. It’s not just that the Agg contains more than 12,000 bond issues. It is also the challenges of trading corporate bonds privately between counterparties, or “over the counter”. The average corporate bond trades infrequently a month after issuance, resulting in potentially large spreads between bids and offers, a cost that the indices don’t incur. With that backdrop, it’s remarkable that the two … [Read more...]
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