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Lipper: Fixed Income Funds Close Out A Strong Year On A Solid Note
Gundlach singled out a few key levels for investors to watch — 2.63% on the 10-year Treasury yield and 3% on the 30-year.
Gundlach says that if these levels are breached, they will be breached together and that yields are going go to a lot higher from there. This move would also mark the end of what he called the “ancient” bond bull market that has been with many investors for the duration of their investment careers.
As a bond guy (with a lot of experience) , how would you position yourself for the beginning of the this next bond cycle?
I agree with @Junkster about that solid return number.
Here is a broad based search (below bold, skip the first top box dated July, 2017) related to the recent action of Bank of Japan and their bonds. Pick your story for info. Are all the big central bankers really trying to back down from QE? Kinda reminds me of an over supply of vehicles and all the major companies are trying to unload and at least break even for their efforts. Fun times still ahead, eh? While about 75% equity here, our house still holds the remainder in investment grade bonds. Our portfolio may have entered the "between a rock and a hard place time frame".
@bee. That is a tough one. Junk corporates do well when rates are rising. But with credit spreads already so tight not sure how that would work this time around. If we have a weak dollar in 2018 world and emerging markets bonds should do well. I really can’t see where the bond returns will come from this year - but I feel that way early in every year. I will be real curious how I am positioned end of month. So far this year junk corporates have been my best performer. I like the steady eddy bank loan sector but a rout in stocks and junk corporates would impact bank loans. I wish I had access to LSFYX there but at Scottrade only available if working with an advisor. An equity might bring Treasuries back to life and junk munis. So many scenarios and can’t wait to see how this month unfolds. ( I need to learn how to cut and paste articles on my I Pad)
Bond interest rates (high quality) will slowly drift higher until the equity markets stumble. After that, it becomes a “Fill In The Blanks” exam - since no one knows how badly equities will stumble or for how long. I could make a case for slowly edging into (high quality) bonds as rates tick up as a hedge against an equity rout (but suspect few would buy that notion).
Just a guess, but when the 10-year goes over 3% (which I’d expect to see this year) I’ll also be watching for some fireworks to begin in the equity markets - if they haven’t already started.
Don’t know anything about Gundlach’s operating style. But with Gross (also sounding bearish on bonds Tuesday) what he says is often quite different from what he thinks. That’s his way of moving markets a bit one way or another to bolster his position. BTW - Bloomberg was citing Gundlach today as calling for a negative return on the S&P this year. Take that for what it’s worth (I know ... not very much).
I need to learn how to cut and paste articles on my I Pad)
Here is how I do it. However, to do it as scripted below I plug a mouse into my tablet.
Do control key and c key at the same time. Then currisor what you want to copy. Then control and c key again. Then to paste hit the control key and v key at the same time. If I do control key and p key it dumps it through my wi-fi conncetion to my printer.
To do it without the mouse ... I tap on the three dots top right side of screen. Then tap share and a menu will appear. Form here you can copy and paste, etc.
What I need? Is spell check (on my tablet).
Hope this helped. If not, well, the thought was there.
( I need to learn how to cut and paste articles on my I Pad).
Simple!
1) Press down against screen at the beginning or end of the passage to be extracted. Works best with a soft-tipped stylus.
2) A light colored (probably blue) dot appears on your screen at the point you are pressing against and a menu above will appear listing several options. Tap “select.” You’ll see a marker (probably blue) appear.
3) Slide the marker left or right and words will begin to appear within a highlighted zone as you make it longer or shorter.
4) Lift stylus from screen.
5) Watch for the word “copy” or “cut” to appear nearby (usually above) after you lift the stylus. Tap on “copy” or “cut”. That saves the highlighted words to the device’s memory.
6) Now, press your stylus against the screen again at the point where you want to paste the saved words. This can be within the document you are working on or an entirely different document.
7) Lift stylus from screen and watch for the word “paste” to appear. Tap on “paste.” The saved words should appear right where you want them.
Longer passages can be cut or copied by sliding your stylus upwards or downward against the screen.
One needs to a few exercise on tablet computers vs PC. Apple has a very helpful discussion forum. I learned by playing with my iPad and google for the answer.
Back to bonds, 2017 was disappointing and I believe it will be more challenging in 2018 with at least two or three rate hikes. For those income investors, where do you invest?
Comments
Quote from Jeff G: As a bond guy (with a lot of experience) , how would you position yourself for the beginning of the this next bond cycle?
Here is a broad based search (below bold, skip the first top box dated July, 2017) related to the recent action of Bank of Japan and their bonds. Pick your story for info.
Are all the big central bankers really trying to back down from QE? Kinda reminds me of an over supply of vehicles and all the major companies are trying to unload and at least break even for their efforts.
Fun times still ahead, eh?
While about 75% equity here, our house still holds the remainder in investment grade bonds. Our portfolio may have entered the "between a rock and a hard place time frame".
https://www.google.com/search?source=hp&ei=ynFVWo6aMMTEjwS28r-ADw&q=bank+of+japan+reducing+bond+buying&oq=Bank+of+Japan+reducing+bon&gs_l=psy-ab.1.0.33i22i29i30k1l9.9520.46395.0.50606.37.25.8.4.4.0.296.2639.12j12j1.25.0....0...1c.1.64.psy-ab..0.35.2679...0j0i131k1j0i131i46k1j46i131k1j0i22i30k1j33i160k1j33i21k1.0.jbBYQYzEtoE
Have a restful remainder of your evening.
Catch
Just a guess, but when the 10-year goes over 3% (which I’d expect to see this year) I’ll also be watching for some fireworks to begin in the equity markets - if they haven’t already started.
Don’t know anything about Gundlach’s operating style. But with Gross (also sounding bearish on bonds Tuesday) what he says is often quite different from what he thinks. That’s his way of moving markets a bit one way or another to bolster his position. BTW - Bloomberg was citing Gundlach today as calling for a negative return on the S&P this year. Take that for what it’s worth (I know ... not very much).
Rumor, playing the markets or real? I sure don't know.
One will likely read or hear more about this today.
China to slow, or stop buying U.S. Treasuries??? One will likely read or hear more about this today.
https://www.fxstreet.com/news/china-officials-said-to-recommend-slowing-or-halting-treasury-buying-201801101038
I need to learn how to cut and paste articles on my I Pad)
Here is how I do it. However, to do it as scripted below I plug a mouse into my tablet.
Do control key and c key at the same time. Then currisor what you want to copy. Then control and c key again. Then to paste hit the control key and v key at the same time. If I do control key and p key it dumps it through my wi-fi conncetion to my printer.
To do it without the mouse ... I tap on the three dots top right side of screen. Then tap share and a menu will appear. Form here you can copy and paste, etc.
What I need? Is spell check (on my tablet).
Hope this helped. If not, well, the thought was there.
Regards,
Ted
Simple!
1) Press down against screen at the beginning or end of the passage to be extracted. Works best with a soft-tipped stylus.
2) A light colored (probably blue) dot appears on your screen at the point you are pressing against and a menu above will appear listing several options. Tap “select.” You’ll see a marker (probably blue) appear.
3) Slide the marker left or right and words will begin to appear within a highlighted zone as you make it longer or shorter.
4) Lift stylus from screen.
5) Watch for the word “copy” or “cut” to appear nearby (usually above) after you lift the stylus. Tap on “copy” or “cut”. That saves the highlighted words to the device’s memory.
6) Now, press your stylus against the screen again at the point where you want to paste the saved words. This can be within the document you are working on or an entirely different document.
7) Lift stylus from screen and watch for the word “paste” to appear. Tap on “paste.” The saved words should appear right where you want them.
Longer passages can be cut or copied by sliding your stylus upwards or downward against the screen.
Back to bonds, 2017 was disappointing and I believe it will be more challenging in 2018 with at least two or three rate hikes. For those income investors, where do you invest?