Bond yields change as markets digest news and events around the world, which also causes yield curves to move and change shape over time. What is a yield curve, and why are stock investors interested in its shape? A yield curve gives a snapshot of how yields vary across bonds of similar credit quality, but different maturities, at a specific point in time. For example, the US Treasury yield curve indicates the yields of US Treasury bonds across a range of maturities. Bond yields change as … [Read more...] about The Flat-Out Truth
The Fed, Yields, and Expected Returns
On December 14, 2016, the Federal Open Market Committee (Fed) concluded its final meeting for the year and announced its decision to raise the federal funds target rate from its range of 0.25%-0.50% to 0.50%-0.75%. As we have mentioned before, Fed watching is a favorite pastime for many market participants who often presume that Fed actions will lead to specific market outcomes. On December 16, 2015, the Fed raised the federal funds target rate for the first time since 2006. As a result, some … [Read more...] about The Fed, Yields, and Expected Returns
In the News: Minding the Income Gap
Extra! Extra! Read All About ... Income! Scottsdale Wealth Planning CEO Paul Ohanian, CFP®, with SWP Guest Contributor and investment strategist Anthony Tanner, CFA, discuss the challenges faced by savers in this era of low (and ever lower) interest rates and where smart solutions may be found. Pick up a copy of the July 2016 issue of the Arizona Journal of Real Estate & Business on local newsstands, or read the full article online HERE. How do you address the INCOME GAP? Leave a … [Read more...] about In the News: Minding the Income Gap
When 9% CDs Roamed the Earth
By Anthony Tanner, CFA SWP Guest Contributor My first job on "the Street" was an unpaid internship at Dean Witter Reynolds during my senior year at St. Louis University. The year was 1983: The Dow had just crossed 1,200 points, the Prime Rate was 11.50%, and bank CD rates averaged 9%. Just let that sink in for a minute. 9% CDs! I remember it so well. It was my job to cold-call prospects for brokers with my script hawking 9% CDs: "Good evening, Mr. or Mrs. John Q. Public. I hope … [Read more...] about When 9% CDs Roamed the Earth
Opportunities Amid Dislocation
By Anthony Tanner, CFA SWP Guest Contributor We see great potential opportunities in the high-yield corporate bond sector for the following reasons: High-yield bonds provide much higher income in the short-term, and greater potential total returns long-term, derived from the more reliable stream of income rather than uncertain and volatile market appreciation/ capital gains. They've cheapened along with the equity markets, and now offers attractive high single digit return prospects. The … [Read more...] about Opportunities Amid Dislocation