Today I received a chart from First Trust with very interesting information.
The chart shows all the quarters since 1976 where stocks and bonds declined together and then provides forward return data for the subsequent 6 months, 1 year, 3 years after each event.
I’ll share the chart below then point out a couple things I find noteworthy. Click on the chart to expand…
Continue reading “First Trust: Stocks and Bonds Falling Together: What Happens Next?”
I started writing this note early yesterday before the wild market action prompted by heightened concerns about Russia potential invading Ukraine.
The purpose for the note was to address why we own Treasury bonds, especially considering that they are down simultaneously along with stocks for the year thus far and don’t seem to be providing any benefit.
Then stocks fell off a little cliff yesterday to lose about 2% on the day and Treasuries made around 1% thereby answering the question for me. Continue reading “Why We Own Treasuries”
As I’ve written about recently, I’ve allocated almost all of my clients’ bond investments to Treasuries and away from corporate bonds the last couple years. This worked well especially early in the pandemic / economic crisis we find ourselves in currently as corporate bonds lost value and Treasuries gained initially. However, it may be time to change tact. Continue reading “Changing Tact and Swimming Naked”
Here’s a good chart showing corporate leverage and its correlation to cyclical peaks. This is one reason I’ve been avoiding corporate bonds in favor of Treasury bonds the last few years.
I don’t think the next crisis will begin with mortgage defaults this time around but with a wave of corporate defaults.
Continue reading “One Reason I’m Avoiding Corporate Bonds”