But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Assessing high yield bonds as part of your fixed income portfolio
The decadent offering of barbecued ribs at a weekend party is similar to that of high yield fixed income investments. By taking on greater risk of spilling sauce on your shirt you have the experience of a true summertime staple…
Just like a prime, choice, or select cut of beef, there are investment grade bonds that are rated according to credit quality. Investment grade describes bonds that are “AAA” or “AA” (high credit quality) and “A” to “BBB” (medium credit quality).
Retail sales, excluding food services, make up about 27% of the total U.S. GDP. They’re an important driver for economic growth. An uptick in retail sales usually means upside for broad-based equity markets like the S&P 500 Index.
The U.S. Census Bureau will release the factory orders report for July on Wednesday, September 3. Factory orders include both durable and non-durable goods orders.
Services consist of industries like banking, insurance, transportation, and scientific and technical services. The services sector accounts for almost 80% of the U.S. gross domestic product or GDP (Source: CIA).
The Bureau of Economic Analysis of the U.S. Department of Commerce will release light vehicle auto sales for August on Thursday, September 4. Auto sales are one of the most important consumer confidence indicators.
Gallup issues the U.S. payroll-to-population (or P2P) ratio each month, based on ~30,000 phone interviews with Americans over the course of the month.
Few economic releases generate as much reaction from both stock (SPY)(IVV) and bond (BND) markets as the employment reports issued by Automatic Data Processing (or ADP) and the Bureau of Labor Statistics (or BLS).
The U.S. Census Bureau will release construction spending figures for July on Tuesday, September 2. Construction spending increases or decreases would imply an increase or decrease in economic activity.
Private financial data provider Markit Intelligence also releases its version of the PMI each month. Both the Institute for Supply Management’s (or ISM) and Markit’s PMI reports attract a lot of interest from financial markets.
The ISM will release the manufacturing PMI for August on September 2. The PMI is a composite measure of economic activity. It’s based on surveys of private-sector firms.
Each month, Gallup releases its estimate of daily discretionary expenditure by the average American. The expenditure estimate excludes regular household bills and big-ticket items like refrigerators and cars.
Economic indicators measure performance at a macro or overall economy-wide level. They provide valuable data points to investors, signaling the direction the economy is headed in.
Other commodities have suffered as well: Most agricultural commodities are down between 5% and 10% year-to-date, and oil prices have slid on less angst over Iraq and the Middle East.
While longer-term interest rates have remained stable, the prospect for an early Fed tightening is exerting downward pressure on the prices of shorter-maturity Treasury bonds.
With the Fed likely to begin raising rates in the first half of 2015, you may be wondering how to position your portfolio for the coming period of rate normalization.
After lift-off, the Fed will likely normalize rates slowly until we reach a federal funds rate closer to 3%. The pace at which the Fed normalizes the rate will most likely be very deliberate.
A September transition announcement could lead to rate normalization beginning as early as March. A presumed six-month period after the public dissemination of the transition plan would mean a March rate lift-off.
So, you’re probably wondering now: When will the Fed begin to raise rates? Here’s my take on the rate rise timeline to watch for now post Jackson Hole.
These comments from Chair Yellen, along with the recently released minutes from the FOMC’s July meeting, show a Fed that is clearly angling toward more near-term policy normalization.