But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Doves and hawks: Why do changes at the Fed matter to investors?
In monetary policy parlance, a “dove” generally tends to focus more on higher employment, while the “hawks” are more concerned with the central bank’s inflation targets.
Various Fed officials, including Fed Chair Janet Yellen, have expressed their preference to fill in one of the board vacancies with a community banker.
The Fed has three major monetary policy tools: the discount rate, reserve requirement, and open market operations. The first two come under the purview of the Board of Governors, while the FOMC decides on open market operations.
The views of new members on the Board of Governors and the Federal Open Market Committee (or FOMC) will be critical to both fixed income (BND) and equity (SPY) markets.
In this part, we will cover the risks inherent in these ETFs.
In this part, we will discuss and compare domestic and overseas aggregate funds (BND) with exposure to debt issued by both governments and corporates.
The standard deviation of fund returns and the Sharpe ratio provide assessments of the risks taken by the fund to earn the returns.
In this part of the series, we will discuss and compare funds investing primarily in debt issued by domestic and overseas corporates.
In this article, we’ll discuss some of the risks an investor must consider before investing in international bonds. Some of these risks are unique to this asset class.
Country risk, that is, risk arising from the economic and political environment of a country, is generally perceived to be the lowest for the U.S.
A diversified portfolio—one in which funds are divided among various asset classes, like stocks, bonds, or real estate—would usually have lower risk than an non-diversified portfolio.
Correlation coefficients measure the degree to which two variables move together without implying a causal relationship between them.
This part compares the performance of domestic bond funds investing in the U.S. Treasury securities with international bond funds, which invest in sovereign bonds issued by foreign governments.
Emerging market (or EM) international bond funds invest in bonds whose issuers are based in countries whose economies aren’t as advanced as those in developed markets.
There are various measures used to compute the yields on bond funds, the most commonly used ones being the SEC yield and the distribution yield.
International bond funds like the Vanguard Total International Bond Index ETF (BNDX) can have various investment styles determined by their stated choice of bond investments.
In the face of a recovering economy, the imminent end to the Fed’s monthly bond buying program and the future onset of monetary tightening, U.S. fixed income investors may have to seek portfolio alternatives.
International bond funds are funds that invest in debt issued overseas, either by foreign governments or corporates or both. These funds invest either in local currencies or U.S. dollar–denominated debt securities.
Average maturity for new municipal bond issues came in lower at 15.2 years in Q1 2014 compared to 16.3 years in 2013 and an average of 17.7 years over the period 1996-2013.
Callable municipal debt issuance in Q1 2014 declined ~27% in Q1 2014 to $53.9 billion on a year-over-year basis.