Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Hi Max. OJ would say first "define the terms", as "bonds" could be most anything - foreign or domestic. Umm ... I have a passing interest in Treasuries, having thrown a little into a TIPS fund as the 10-year approached 3% a few weeks ago. It's backed off a bit to around 2.9% today. Can't help with the foreign stuff, but here's some possible reasons the 10-year has bounced just a bit.
- Treasuries may have "overshot" their mark short-term. We'll get to 3% (and well beyond) eventually. But the run-up and rash of press attention a few weeks back appeared a bit overdone.
- Speculation about the next Fed Chairman waxes & wanes.
- Speculation about the timing and extent of Fed "tapering" waxes and wanes.
- There's been some unsettling news recently on mortgage refinances which are way down. Not insignificant - as the cash-out "refies" usually end-up being spent on goods and services and boosting economic growth.
- A crisis (such as conflict in Syria) will often push investors into "safer" investments like Treasuries. This tends to be short-term knee jerk reaction, since in the longer run such conflicts often weaken the economy and the value of the $$.
- I still think we'll see a correction in the stock market one of these days. If that happens, I expect to see $$ flee to Treasuries and other higher quality bonds.
Reply to @MaxBialystock: Good for you Max. A bit odd with yesterday's drop in gold. Many of the EM markets have economies heavily defendant on natural resources and would be hurt by a drop in metals. In a convoluted way, lower rates in the U.S. helps foreign currencies - as lower rates tend to depress the Dollar. It's unlikely that was the only factor, however.
BTW - "News" about Larry Summers broke yesterday. Could have played a part. And the "non-war" over Syria became more obvious to everyone. If I'm not mistaken, Russia, a key player in all of this, is still considered an "emerging" market. And Syria? Yikes - what to call that one? Submerging?
Reply to @hank: Russia is technically cheap, but I think you have to have such a long-term view because views and sentiment I think will not change any time soon.
Reply to @scott: Yep - Wasn't considering buying Russia. Just speculating that all the maneuvering over Syria may be impacting the EM bond markets in ways that aren't easy to understand. If Russia can avoid getting dragged into a war over Syria (their close ally) that would be good for them - politically and economically. If they can come out of this mess looking like a "peace maker" that would bolster their standing in the world and might spill-over into their currency. On the other hand, should war break out over there, it could disrupt the economies of many of the EMs in that area and nearby Africa. Guess that's why I don't invest in emerging markets. Don't understand them. Too damn many moving parts!
Comments
- Treasuries may have "overshot" their mark short-term. We'll get to 3% (and well beyond) eventually. But the run-up and rash of press attention a few weeks back appeared a bit overdone.
- Speculation about the next Fed Chairman waxes & wanes.
- Speculation about the timing and extent of Fed "tapering" waxes and wanes.
- There's been some unsettling news recently on mortgage refinances which are way down. Not insignificant - as the cash-out "refies" usually end-up being spent on goods and services and boosting economic growth.
- A crisis (such as conflict in Syria) will often push investors into "safer" investments like Treasuries. This tends to be short-term knee jerk reaction, since in the longer run such conflicts often weaken the economy and the value of the $$.
- I still think we'll see a correction in the stock market one of these days. If that happens, I expect to see $$ flee to Treasuries and other higher quality bonds.
BTW - "News" about Larry Summers broke yesterday. Could have played a part. And the "non-war" over Syria became more obvious to everyone. If I'm not mistaken, Russia, a key player in all of this, is still considered an "emerging" market. And Syria? Yikes - what to call that one? Submerging?
Regards,
Ted
http://www.allaboutfunds.com/performance/fixed_iops.pdf