So what about the Trump election market bump. Well......
.......FANG, Emerging Market Bonds, Emerging Markets Foreign Exchange, Developed Market Bonds, US Treasuries and Non-US Stocks are all lower....
Anything thing but a stable market.
Igy
So what about the Trump election market bump. Well......
.......FANG, Emerging Market Bonds, Emerging Markets Foreign Exchange, Developed Market Bonds, US Treasuries and Non-US Stocks are all lower....
Anything thing but a stable market.
Igy
But you are ignoring that LT bonds have a higher yield and before last week way outperformed lower duration bonds. In fact even now I think LT bonds are outperforming intermediate bonds for the year. So yes, you are cherry picking. You are not advancing the discussion here. You are right that inflation doesn't necessarily drive bond yields. But I would point out a few things. 1. If bond yields go up even slightly, there is going to be a flight from international funds back into the U.S. Its already happening. That undercuts any rout of rising yields. 2. A significant amount of borrowing is just done for tax dodges by profitable corporations and wealthy individuals. Instead of realizing income and having to report taxable income, they can just borrow money, secured by their assets. Lower tax rates is going to reduce that type of lending. That frees up money to go towards financing the higher budget deficits.3. There is the ever present risk that stocks go into a bear market. If and when that happens LT bonds with yield guaranteed principal looks pretty dang attractive. Overlay a chart of VBLTX with the S&P 500 and you will see this. 4. Pensions and an ever growing retired population is going to prop up demand for safe LT bonds. Pensions are going to need "de-risk" and part of that is buying safe bonds that will pay out a yield to match the payout they have to make to retirees. So yes, inflation doesn't necessarily drive up bond yields. But in the present situation, rising inflation is my only real primary concern with LT bonds.
Ghost of Igloi wrote:
Ryan,
No cherry picking of information duration is a financial measurement and your investment is the most sensitive to interest rates up or down--period.
Interest rates can rise without inflation. Interest rates have been suppressed by Central Bank policy. The difference over the last six months has been the reaction of the markets to Central Bank policy; less so in my view.
Igy
Broken record
Ghost of Igloi wrote:
The first two sentences describe me. The company is Bullish, as well as the majority of Wall Street. All of the other accusations come from you.
My third sentence is certainly debatable, but that is my observation. The fourth and fifth sentences are fact.
And all my sentences are fact.
Igy
Ryan,
You seem to be confusing capital appreciation for yield. Generally most bonds have a higher yield than last week, but the rise in rates have adversely impacted the value of long term bonds.
I don't disagree with your other points.
Igy
http://www.zerohedge.com/news/2016-11-14/rbc-market-commentary-under-hood-its-not-goodWOLF!! wrote:
Broken record
I'm not confusing anything. You were just saying that capital appreciation can drop steeply. I was just pointing out that capital appreciation can, and has, spiked steeply upwards with LT bonds.
It sounds like you just prefer the lower volatility that comes with lower duration bonds. I have no argument there. And in fact I also own a Vanguard ST bond fund, not to mention I continue to hold lots of cash. To each his own.
Ryan,
Here is another article that supports your view.
I am generally in your camp.
Igy
In fairness, it makes sense to think the S&P 500 yield will go up under Trump. A problem corporations have with paying a dividend is that it is not tax deductible. But if they lower the corporate tax rate (and I think there is a good chance that happens) than that obstacle goes away.
Btw, if you ask me I think it would be better to just make dividends tax deductible instead of lowering corporate tax rates. In other words, end double taxation. In the long run I think that is more sensible. Lowering Corporate rates to 10% just opens the way for super wealthy to stash their money in Corporations for not any productive purpose.
Ghost of Igloi wrote:
Ryan,
You seem to be confusing capital appreciation for yield. Generally most bonds have a higher yield than last week, but the rise in rates have adversely impacted the value of long term bonds.
I don't disagree with your other points.
Igy
The value of any bond is steadfast, if you hold it to maturity.
Ghost of Igloi wrote:
And all my sentences are fact.
Igy
😂😂
Ghost of Igloi wrote:
So what about the Trump election market bump. Well......
.......FANG, Emerging Market Bonds, Emerging Markets Foreign Exchange, Developed Market Bonds, US Treasuries and Non-US Stocks are all lower....
Anything thing but a stable market.
Igy
Hi. You'll find that there are always some components that are up and some that are down. That's the way these markets work.
best year over year growth in retail sales since c. January 2015
Import export prices down just 1.1% y/y - highest number since mid 2014
if trumpo doesn't mess this up, things are looking better and better
agip wrote:
if trumpo doesn't mess this up, things are looking better and better
But K5/Igy voted for Trump so that the markets would tank and he would finally be right. The fact that Trump is a racist was just a bonus.
Ghost of Igloi wrote:
So what about the Trump election market bump. Well......
.......FANG, Emerging Market Bonds, Emerging Markets Foreign Exchange, Developed Market Bonds, US Treasuries and Non-US Stocks are all lower....
Anything thing but a stable market.
Igy
Trump is the POTUS-elect of the USA. Sure, there's a ripple effect around the globe given the strength of our economy, but those non-USA categories that you mentioned primarily respond to actions on their homefronts. Not our problem.
So that leaves us with FANG and Treasuries. FANG is already recovering from this mini-slump and is still up y/y. Treasuries are fine unless you're a speculator and then you deserve what you get.
Bottom line: things are pretty rosy right now.
DB up almost 50% from its lows
K5/Igy wrong again?! wrote:
agip wrote:if trumpo doesn't mess this up, things are looking better and better
But K5/Igy voted for Trump so that the markets would tank and he would finally be right. The fact that Trump is a racist was just a bonus.
1. I am the real K5 and Igy is not.
2. I did not vote for Trump. Nor Hillary.
3. I suspected the market would tank if the establishment did not get their puppet Hillary installed. I had a couple of hundred k in there and pulled it out Tuesday afternoon of the election as I informed everyone on this thread.
4. I don't know that Trump is a racist. I do know that the establishment is.
Zero for four. Impressive even by your standards.
Reel K5 wrote:
Zero for four. Impressive even by your standards.
For your own edification, it's up to the rest of us to score your posts, not you.
The good news is you were indeed 0 for 4. I assume you purpose wrote four false statements. After all, you do have a reputation to uphold.
https://mobile.twitter.com/hussmanjp/status/796477594954829824?p=vagip wrote:
best year over year growth in retail sales since c. January 2015
http://bloomberg.econoday.com/byshoweventfull.asp?fid=472217&cust=bloomberg-us&year=2016&lid=0&prev=/byweek.asp#topImport export prices down just 1.1% y/y - highest number since mid 2014
http://bloomberg.econoday.com/byshoweventfull.asp?fid=472264&cust=bloomberg-us&year=2016&lid=0&prev=/byweek.asp#topif trumpo doesn't mess this up, things are looking better and better