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Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.
What about about high yield (junk) bond mutual funds
Sure anything is possible but from a risk perspective owning bonds now is a fool's game, as the greater risk is rates increasing and the investor taking a bath on price of the bond. Take your $$ and run if you were smart enough to invest in long duration bonds. Investors are better off, owning high quality stocks paying a good divident that increases every year then bonds. 10yr at 1% is not a scenario investors or anyone should want all of us should be hoping for rate increases as that would mean the economy is doing better, rates of 1% is Japan economy and that we don't want !!! As of now there is no QE3 rates at 1.5% for 10yr is unbelievable going to 1 % will not help the economy. Only job creation, less regulation, smaller government and lower taxes will unleash the power of the American economy. what happens when the Fed stops buying? purchase 70%+ in 2011 of government debt, rates will go up and when 10yr is over 2% QE 3 kicks in and the ponzi scheme continues…Better to own hard assets then gov't bonds.
I agree. Well said!
end of obama adminsitration
"the fact that our country is $212 trillion in the hole" Can you explain that statement?
Well, Keith is Right Again
The implication of an as yet another unspecified central bank inpired stimulus is that risk assets such as stocks and commodties (gold) may rocket-up in response for a time as bonds ker-plunk downward. Of course, the million $ Question is: What will happen afterwards (following the Nov. Presidential election)? Many will speculate as the Fed telegraphs their next move. Once Obama has his his second term "in the bag" he will be totally unrestrained and won't care about the economy, despite talk otherwise. Ben Bernanke won't care much because he will be assured of reappointment under a second Obama term.
One possible scenario of what could happen when the next stimulus effort fails ( they all have failed): stocks, commodities(gold), and even bonds will all roll over in turn as we go through a deflationary meltdown. (In deflationary, default risk increases). If I see 14,000 on the DOW Index or thereabouts and commentry from MSCNBC or CNN about an economic turnaround and strengthening recovery, then I will become very conservative and suspecious. (Most investors sound pretty conservative already if they will accept negative bond yields).
The implication of an as yet another unspecified central bank inpired stimulus is that risk assets such as stocks and commodties (gold) may rocket-up in response for a time as bonds ker-plunk downward. Of course, the million $ Question is: What will happen afterwards (following the Nov. Presidential election)? Many will speculate as the Fed telegraphs their next move. Once Obama has his his second term "in the bag" he will be totally unrestrained and won't care about the economy, despite talk otherwise. Ben Bernanke won't care much because he will be assured of reappointment under a second Obama term.
Many thanks, very helpful. I think you are right, but you are not alone: Robert Prechter has been forecasting negative interest rates for some years now…..especially for US T-bills. He thinks they are the safest place to be, along with cash in a very safe bank.
I miss something in Americans' reasoning. You spend a billion+ each day on wars and can't see its effect on your deficits.