Tag Archives: Interest Rates

Bonds: A Good Place Not to Invest Now

Posted on October 30, 2010 by

When the US stock market hit its initial 21st Century trauma phase in 2002, Merrill Lynch sought to boost its tanking retail business by blitzing television sets with a simple tag-line: “Buy bonds”, they said. Although at the time that campaign seemed to be more aimed at Merrill’s revenue than investment advice, it proved sound for both purposes. Through September 2010, the Barclays US Long Treasury Index had returned an annualized 8.2% for the past ten years. That figure trounced all popular US and world stock indexes (except emerging markets) by a significant margin. The more generalized Barclays US Aggregate … Continue reading →

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An Upside Down Interest Market?

Posted on January 10, 2006 by

All eyes (should be) on US bonds in 2006 As 2005 came to a close, the bond-trading world was scratching its collective head about the current interest rate relationship-anomaly between long- and short-maturity investment paper. Where’s this bus going in 2006? As shown in the chart below, it is clear that: (a) the 10-year Treasury rate has been on a collision course with money market rates and (b) 30-year mortgage rates have (as usual) moved in lock-step with 10-year Treasuries. An upside-down interest market? This scenario is very unlikely to persist, because, if bondholders are not compensated for the very … Continue reading →

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A REAL Real Estate Bubble

Posted on January 9, 2006 by

2006: Another bubble? Is there a REAL, real estate bubble out there? Or is it merely a housing bubble?  It’s an important distinction because, while single-family homes are a big, boisterous factor in the public domain, investors in the business of real estate own properties that are very different from those of America’s castle-barons. Market valuation as a cycle First, a simple statement of fact: All capital asset classes….real estate, stocks, bonds, etc…should, and do deliver wealth-growth during periods of significantly falling interest rates. The most serious mistake an investor can make during secular interest rate declines would be to … Continue reading →

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