Periodically, I'll actually hand write a short note related to investing and tack it into the wall behind my chair, in the room where I sit, to ponder all things investable. These are my first notes for this new year.
The current note words are in bold below.I " heart" predictions and every so often a particular article will peak my interest.
Without any doubt, a very large wall could become covered in a short time, if one noted everything uddered or printed that appeared to have more value than the next.
I will choose parts of this wisdom for today, as a reference point. Hell, what could go wrong? Surveyed economists and analysts helped form the article words.
An article snippet, full article linked below: (snippet begin) Treasuries lagged behind stocks by the most in seven months amid confidence the Federal Reserve will tailor its reduction in stimulus to support riskier assets even if the U.S. economic recovery keeps weakening.
U.S. government securities were little changed in February, based on the Bloomberg U.S. Treasury Bond Index. The MSCI All-Country World Index of shares gained 4.3 percent including reinvested dividends. The difference is the biggest since July. The Treasury Department is scheduled to sell $35 billion of five-year notes today and $13 billion of two-year floating-rate securities.
“Treasuries are just lagging the outperformance of equities,” said Richard McGuire, a fixed-income strategist at Rabobank International in London. “It smacks at the margin of some degree of rotation. Soft U.S. data keeps the hopes of generous liquidity provisioning alive.”
>>>I (catch22) really need to pay attention to and be most mindful of the words and the related returns of the noted indexes in the above two paragraphs from the article. I suppose the two indexes compared are a measure of value for someone; but don't really tell me much. If one wants to get fussy with measurements of Treasury issues versus whatever; how about EDV (+8.2% YTD) or related. No, EDV won't pop forever; but what does?
The yield will be 3.37 percent by year-end, according to a Bloomberg survey of economists, with the most recent forecasts given the heaviest weightings. The move would hand a 2.8 percent loss to an investor who buys today, data compiled by Bloomberg show. The rate will be at 3.40 percent in 12 months, according to Rabobank’s McGuire. Record High
The Standard & Poor’s 500 Index (BUSY) climbed to a record 1,858.71 on Feb. 24. It will extend the all-time high by 4.9 percent to 1,950 by year-end, analysts in a separate survey predict. (snippet end)
Treasuries Trail Stocks by Most Since July on Liquidity BetsMy own prediction is that a 5 year return from today will prove better for Brazil ( EWZ ) than for Greece ( GREK ) although the pattern is not yet in place; as the prior 1 year return for EWZ is - 23% and GREK is + 35% . I will also place this note upon the wall.
Lastly, all bonds are not yet dead; in spite of reports from 2013 and before, of their death bed awaiting.
MFO, Dec 2012 & BondaphobiaChoose wisely among the equity and bond sectors, eh? Anything can happen. We play in a most interesting global game among the really big kids on the investing block.
Well, that's all folks. These are the type of observations and writings (me) that likely come from too many very cold months of weather in the northern climates. Cranial/rectal inversion is more cronic during harsh winter months.....
Take care,
Catch
Comments
I've come to expect the unexpected in investing. So, can't get into all the relative valuation jargon.
Seems to me that most markets have been pretty much going nowhere fast for several months now. Equities slightly positive. Metals recovering but not back to their highs. Energy strong on the heels of a brutal winter. Ten-year Treasury very steady for months now in the 2.5 - 3% range. EM scare appears to have been overplayed, but, admittedly could still jump up and bite us. Washington dramatics have simmered down. There may be some truth in the old maxim: "Get rich slowly."
Other than some minimal rebalancing among various components and taking our annual (less than 5%) distributions which always require a bit of juggling, pretty much steady as it goes. Regards
It took me a long time (like 19 years) to finally realize there are no experts in this business and all that counts is the message of the market i.e. its price action. Most here, there and everywhere bow at the altar of the cult of the expert. Trading and in many respects investing is a *counterintuitive process* So all the intellectual firepower and mastery of math and stats etc. won't get you too far in this game if outperformance and a more than comfortable nest egg is your goal.
As for bonds, at the end of 2013, the last place I thought I would be in 2014 would be junk munis. But the action of the market in early January (NHMRX) said loud and clear I better get there pronto and it has been a nice ride to date. How long it will last I have not a clue.