Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

Here’s the Minimum You Should Invest in Fixed-Income

By

Back in May of 2002 I warned readers of the dangers of market timing, and of investing too much of their portfolio in equities. I wrote: Your Focus: Dividends & Interest In this issue, I re-emphasize why I think conservative investors must focus laser-like on fixed-income interest and dividends from common stocks. No matter what hype you read in the media or hear from brokers, stocks in general are not cheap—far from it. When all you get from the average big company stock is a 1.5% yield and you pay nearly 30 times earnings in the process, you are not looking at bargains. As you know, … [Read more...]

The Last Debt Domino to Fall?

By

Leveraged loan investors are heading for the door. Loans have their place in investment portfolios, but as late cycle assets to hold, these are not great. The Wall Street Journal's Sam Goldfarb calls them the "last domino to fall," in debt markets. He writes: While mutual funds represent just one source of demand for loans, the recent outflows have had a big market impact, leading to sharp declines in the prices of existing loans and prompting more investor-friendly terms on a shrinking supply of new loans entering the market. To some extent, loans—often referred to on Wall Street as … [Read more...]

Are You Investing in the Armored Truck of Financial Markets?

By

Are your investments characterized by the flash and speed of a supercar, or the reliability and protection of a Brinks truck? There’s nothing wrong with a super powered automobile made to take on curves at maximum speed, but the power that makes those machines exciting, is also what breaks their parts. All that torque can be hard on an automobile. Meanwhile, the massive diesel engines and reinforced steel protective bodies of armored trucks make sure its cargo reaches the destination. Back in 1990 I called Treasuries “the armored Brinks truck of financial markets.” I was responding to … [Read more...]

Are Catastrophe Bonds Worth the Risk?

By

Investors who purchased catastrophe bonds from PG&E now have the fate of their investments lying in the hands of investigators searching for the cause of the Camp Fire in California. If PG&E is found to be at fault for the fire, those investors are likely to lose everything. Markets will surely have to reevaluate the risk posed by such catastrophe bonds, and adjust yields demanded accordingly. Nicole Friedman reports on the bonds in The Wall Street Journal, writing: Those who follow the catastrophe-bond market are already anticipating the worst. The PG&E wildfire bond was quoted … [Read more...]

My Concentration Is on Full Faith & Credit Pledge U.S. Treasuries

By

As Wall Street tumbles, my concentration is on full faith and credit pledge U.S. treasuries. Reuters' Caroline Valetkevitch reports on the market: The Nasdaq fell 3 percent on Monday as investors dumped Apple, internet and other technology shares. Shares of Apple Inc fell after the Wall Street Journal reported the company had cut production orders in recent weeks for all three iPhone models launched in September. The iPhone maker’s stock dropped 4.0 percent to $185.86 and is now down 19.9 percent from its Oct. 3 record closing high in the wake of a disappointing holiday quarter sales … [Read more...]

Vanguard GNMA Anchor to Windward

By

When times are tough, Vanguard GNMA continues to pay income, much like it does when times are good. For me, GNMA is an anchor to windward no matter which way the wind is blowing. And even though Young Research, which provides research and analysis to investment advisor Richard C. Young & Co., Ltd., recommends laddering U.S. Government and Corporate bonds, you could do a lot worse than owning some GNMA. Originally posted on Yoursurvivalguy.com. … [Read more...]

It’s Time For Investors to Focus on Treasuries

By

It’s time for investors to focus on Treasuries. As stocks tumbled 3% yesterday, Sinead Carew wrote at Reuters: NEW YORK (Reuters) - U.S. stocks tumbled on Wednesday, with the S&P 500 marking its biggest daily decline since Feb. 8, and technology stocks led the losses as rising U.S. Treasury yields sent investors fleeing from risky assets. The Dow Jones Industrial Average .DJI fell 831.83 points, or 3.15 percent, and the Nasdaq Composite .IXICdropped 315.97 points, or 4.08 percent, to 7,422.05. Read more here. … [Read more...]

Can Bonds Restore Health to the Market?

By

James Mackintosh, writing in The Wall Street Journal, explains that as the term premium rises on bonds, hardest hit could be the so-called "acronym stocks," also known as the FAANGs. With rates on Treasuries rising, the discounted future profits of these tech giants look less attractive to investors. Mackintosh gives investors in the FAANGs three reasons to worry, writing: There are three reasons to worry. The first is that the acronym stocks— Facebook, Amazon, Apple, Google parent Alphabet, Netflix, Microsoft and others arranged into the FANGs, FAAMGs and so on—flew too high, and will now … [Read more...]

As Tech Invests its Cash, Who Will Buy Bonds?

By

For years tech companies with vast overseas cash reserves have invested their wealth in the short-term debt of other corporations. But now that Apple and other companies are taking advantage of tax reform to bring home cash held abroad, the demand for that short-term corporate debt is drying up. Bloomberg's Molly Smith reports: Once the biggest buyers of short-dated corporate debt, Apple along with 20 other cash-rich companies including Microsoft Corp. and Oracle Corp. have turned into sellers. While they once bought $25 billion of debt per quarter, they’re now selling in $50 billion clips, … [Read more...]