TAA

Mar 23, 2017 | Post by: Roman Chuyan, CFA Comments Off

TIPS and Tactical Investing

I begin with an overview of tactical investing applied to fixed income. TIPS recommendation is reiterated. The available TIPS products are compared. In last week’s article, I wrote that Treasury inflation-protected securities became attractive. Our model made this recommendation based on the level of 10-year real yield (60 basis points

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Mar 14, 2017 | Post by: Roman Chuyan, CFA Comments Off

The Recipe For Rising Rates: TIPS

It’s been tough market for bond investors since the last week of February. The odds of the Fed’s rate hike on March 15th jumped from 35% to nearly 100% in three weeks. Longer-term rates also jumped, and bond prices, which are inverse to yields, fell. The Fed officials are compelled

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Mar 03, 2017 | Post by: Roman Chuyan, CFA Comments Off

The Fed Is Back In Play

Treasury yields jumped and bonds fell this week as investors bet that a Fed interest rate hike would come this month. New York Fed President William Dudley – one of the most influential U.S. central bankers, and usually considered a dove – said late Tuesday that the case for tightening

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Feb 10, 2017 | Post by: Roman Chuyan, CFA Comments Off

How will Trump’s Economy Look?

There is this to be said about the Many. Each of them by himself may not be of [much] quality; but when they all come together it is possible they may surpass the quality of the few best. ~ Aristotle, Politics (around 340 BC) via Arthur Herman, The Cave and

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Jan 04, 2017 | Post by: Roman Chuyan, CFA Comments Off

2017: Optimistic For Stocks, But Not Bonds

I provide a summary of our market outlook to mid-2017. Post-election surge in consumer sentiment brightens 2017 economic outlook. I give updated recommendations for our tactical fixed-income portfolio. In my first 2017 post, I wanted to provide a summary of our market outlook to June of 2017. Mid-year is chosen

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Dec 21, 2016 | Post by: Roman Chuyan, CFA Comments Off

Economic Effect Of Higher Rates

Auto and home sales have not been affected by higher interest rates. The president-elect’s policies boosted rates, but also brought about remarkable surge in optimism. If perception becomes reality, higher growth may offset the impact of higher interest rates. I reiterate my short-duration recommendations to active bond investors, and share

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Dec 11, 2016 | Post by: Roman Chuyan, CFA Comments Off

TIPS Are Not On The Menu – Just Yet

Inflation may continue to rise in the coming months. TIPS protect against inflation, but come with their unique risks, including rising interest rates. The time to invest in TIPS is not yet, but we are close. In this post, I’ll describe Treasury Inflation-Protected Securities, or TIPS. These inflation-indexed bonds offer

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Dec 05, 2016 | Post by: Roman Chuyan, CFA Comments Off

How Much Do We Owe?

The U.S. aggregate debt is currently $63 trillion, or 337% of GDP. The good news is that debt service dropped in previous years with interest rates. Higher rates began to pressure mortgage applications, but the full effect on the economy remains to be seen. I reiterate my recommendation to maintain

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Nov 21, 2016 | Post by: Roman Chuyan, CFA Comments Off

The Real World – Rates Are Rising, Bonds Dropping

Investors are being thrust back into the real world where rates are not zero. The trifecta of market forces – inflation, FX, and China’s yuan – continue to drive rates up. The effect of higher borrowing costs on the economy is likely to be significant. After years of central banks’

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Nov 14, 2016 | Post by: Roman Chuyan, CFA Comments Off

The Trump Sell-Off In Bonds

U.S. interest rates jumped sharply on November 9th when Donald Trump was called the winner of the U.S. presidential election, which sent bonds plummeting. Today, I will describe market expectations that I think triggered the latest selloff. When it stopped buying bonds in 2014, the Fed’s began the long, drawn-out

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