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Comfort Zone Investing: If I Could Start All Over Again ...

Most investors would like a "do over."

They look back on certain investments and wish they'd never heard of, much less put money in them. Sure things like your good friend's invention that would make beer in one day from water and weeds. Or your brother's idea of selling real estate on Saturn. Everyone has their own stories. Mine are usually related to private investments in the medical device field or biotech, though I did have one out of Florida that made a "pig" that ran through oil pipelines to check on their safety. After meeting the founder who looked more like a used car salesman that caught a great sale on polyester suits, I should have known better right then. But I didn't.

Continue reading Comfort Zone Investing: If I Could Start All Over Again ...

Five Mega Trends for the Next Five Years

"We are seeing history in the making. And what's happening in the Middle East is coinciding with some of the mega trends underlying our investment position," note long-standing resource experts Mary Anne and Pamela Aden.

The editors of The Aden Forecast explain, "Here, we review five trends -- related to inflation, interest rates, the U.S. dollar, bonds, and metals -- that should last for many years.

Continue reading Five Mega Trends for the Next Five Years

Pimco's Gross Sells All U.S. Government Holdings

This is indeed a dramatic move. The world's largest bondholder, Pacific Invest Management Company, dubbed Pimco, sold all of its U.S. government holdings including U.S. treasuries.

At the end of February, Pimco had $236.93 billion or 12% of its holdings in the Total Return Fund in U.S. holdings. That was cut to zero.

Continue reading Pimco's Gross Sells All U.S. Government Holdings

Gary Shilling's Investment Strategies for 2011

Editors note: Economist Gary Shilling has agreed to share with BloggingStocks his 18 investment strategies for 2011. But he will only be revealing them a little at a time, over the next few weeks, so check back often!

My investment strategies for 2011 are driven by my forecasts for the economies and financial markets here and abroad. In my view, the overarching reality that will dominate 2011 and, indeed, the next decade or so is financial deleveraging, as spelled out in my new book, The Age of Deleveraging: Investment strategies for a decade of slow growth and deflation, which was published in November 2010 by John Wiley & Sons.

Continue reading Gary Shilling's Investment Strategies for 2011

Bonds to Bounce Back?

The activity in the Treasury market over the last couple of days has been eye opening to say the least. Bonds have been absolutely crushed, and the yield on the 10-Year note has exploded through the 3% level to 3.27%. On a very short-term basis, this move looks to be too much too soon, and Treasuries appear to be oversold. On a longer-term basis, this market may implode if credit and inflation concerns creep into the picture down the road -- not an unlikely outcome.

Observers are pointing to a number of factors that are causing yields to rise. Some market participants are viewing this development as an indicator that investors are beginning to price in more robust growth going into 2011. This would be a good thing. If this is in fact the case, a major stock market move could occur in very short order.

Continue reading Bonds to Bounce Back?

Fed's QE2 is a Bridge to Normal Credit Markets

To say that the financial crisis era has been riddled with half-truths, distortions, and outright falsehoods regarding the unprecedented public policies designed to maintain stable, liquid credit markets and help stimulate the U.S. economy, would be an understatement. Moreover, investors need to disabuse themselves of them if they hope to make informed, balanced, and prudent investment decisions.

One such misnomer concerns the categorization of quantitative easing.

As U.S. Federal Reserve Chairman Ben Bernanke took pains to clarify Sunday, during his CBS '60 Minutes' interview, the Fed is most certainly not 'printing money.'

A monetary policy of printing money would involve adding money to the financial system that chases the same amount of goods. That can and typically does lead to higher inflation.

Continue reading Fed's QE2 is a Bridge to Normal Credit Markets

Is the Fed's 'QE2' About to Leave the Port?

At its September meeting, the U.S. Federal Reserve indicated that (in a nutshell) it knows the economic expansion has slowed, it sees downward price pressure (as opposed to pricing power) in the economy, and it is prepared to take action, if necessary, to both stimulate the economy and fight deflation.

Investors want to know what form would additional quantitative easing, or 'QE2' as the business media calls it, take?

Most likely, it would take the form of additional asset purchases by the Fed, but don't rule out a creative, new tactic by Fed Chairman Ben Bernanke.

Continue reading Is the Fed's 'QE2' About to Leave the Port?

Investors Are Switching from Stocks to Emerging Bonds

EPFR Global tracks money flows worldwide. In a Bloomberg article, here are their latest numbers:

  • Investors pulled $7.1 billion from stock funds worldwide in the week Aug 25.
  • They put $5.2 billion into bonds.
  • European equity funds reported net outflows of $15.7 billion
  • Global emerging market funds took in $333 million.
  • Dollar bonds in developing nations returned 13% this year.Global bonds could surpass last year's record inflow of $47 billion.

Continue reading Investors Are Switching from Stocks to Emerging Bonds

Comfort Zone Investing: How Much Money Is Enough?

Comfort Zone InvestingWhen John D. Rockefeller was asked how much money was enough, he replied: "A little bit more." If you're looking to make a little bit more on your investments, here are places to find extra cash. Unfortunately, rates are very low and the emphasis has to be on "little" rather than "more."

Please note: none of these stocks or funds are recommended as buys. They may, however, be a good place to start research.

Continue reading Comfort Zone Investing: How Much Money Is Enough?

Bonds Up, Stocks Down on Renewed Economic Fears

A new fear gripped the market Friday. Originally, gross domestic product -- the broadest measure of economic activity -- was reported to have grown 2.4% in the second quarter. Now, many are expecting the Department of Commerce will revise this figure down next week. According to a Bloomberg survey, revised GDP will have lost one point to a more anemic 1.4% growth.

The expectation of the lower GDP caused an accelerated rush to buy Treasuries. On the futures market, the 30 year bond was up 15 ticks to 134-26. The Dow Jones Industrial average continued its decline, falling yet another 90 points in early morning trade.

Continue reading Bonds Up, Stocks Down on Renewed Economic Fears

Is the U.S. Experiencing a Bond Bubble?

On top of the dot-com, NASDAQ, housing, oil, and commodity bubbles, add another, potential ephemeral rise: a bond bubble.

Could a bond bubble, or at least a U.S. bond bubble, occur? Indeed it could, and here's how it might appear.

Institutional investors, flush with cash, are unable to profitably deploy capital in stock-based (or comparable equity-based) investments, due to unattractive projected returns, stemming from the slow, uneven U.S. and global recoveries.

Continue reading Is the U.S. Experiencing a Bond Bubble?

Flight-to-Safety Pushes U.S. Interest Rates Lower

Paraphrasing the great Mark Twain, if you don't like the stance of institutional investors, just wait a while.

Case in point: Investor sentiment toward the United States' large budget deficit and national debt.

A scant month ago, the talk was of bond vigilantes turning their wrath on the U.S., from Greece, Spain, Portugal and the rest of Europe's debt-plagued nations -- a predicament that would force interest rates up in the world's largest economy.

Continue reading Flight-to-Safety Pushes U.S. Interest Rates Lower

Has the Euro Passed Its Own Stress Test?

On the cusp of stress tests for Europe's banks, the continent may have already passed a major stress test -- one for the euro currency, Bloomberg News reported Thursday. A scant two months ago, the dominant concern among institutional investors was not the return on their investment in European government bonds, but the return of their investment.

Institutional investors drove up interest rates for debt-plagued nations Greece, Spain, Portugal, Italy, and Ireland, and banker-to-banker distrust increased.

Continue reading Has the Euro Passed Its Own Stress Test?

Are U.S. Interest Rates Headed Even Lower?

Think U.S. interest rates are low? Well, they may be headed even lower, so says a key North American bank.

The Canadian Imperial Bank of Commerce said the 10-year U.S. Treasury rate may fall to a 15-month low of 2.75%, if it can fall and remain below a technical support level at 3.00%, Bloomberg News reported Wednesday.

Continue reading Are U.S. Interest Rates Headed Even Lower?

Foreigners Bought Fewer Long-Term U.S. Securities in May

In May, net long-term inflows into the United States fell to $35.4 billion from April's $81.5 billion. Foreigners bought only $14.9 billion in May, down from $76.4 billion in April. China, in particular, cut its treasury holdings by $43.5 billion to $867.7 billion. Japan, the second largest holder reduced its treasury stash by $8.8 billion to $786.7 billion.

This one is disturbing. Official or government investors were net sellers of $38.8 billion, a record. Private investors bought net $56.2 billion.

Continue reading Foreigners Bought Fewer Long-Term U.S. Securities in May

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IndexesChangePrice
DJIA-89.2312,801.23
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Last updated: February 11, 2012: 05:13 AM

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