Ray Dalio: Recent Market Dips Are Minor Corrections

The head of Bridgewater Associates, the world’s largest hedge fund, says that “the latest sell-off in stocks and bonds is evidence of typical market behavior in the later parts of a cycle and has come sooner than the firm expected.” This according to a recent article on CNBC.com. The article cites a recent blog in which Dalio explains how the current “late-cycle” behavior is more pronounced due to the increased sensitivity of investment assets to… Read More

A Bond Blowout Might Be Coming

The ten-year Treasury yield has risen to its highest level since March, reports a recent Wall Street Journal article, and bond guru Bill Gross says, “the move confirms a bear market.” “For some,” the article asserts, “the high of 2017, at around 2.63%, is a key level to watch for whether yields move higher still; for others, the move has already broken out of a downward channel for yields that has persisted for more than… Read More

Gundlach on Bond Yields and the Broader Market

The market would be hurt if yields on 10-year Treasuries climbed to 3 percent or higher next year, says Jeffrey Gundlach as reported in Bloomberg. The DoubleLine Capital CIO has called president-elect Trump’s policies “bond unfriendly” and says that Treasury yields above 3 percent (benchmark Treasuries are currently trading below 2.5 percent) “would start to have a real impact on market liquidity in corporate bonds and junk bonds.” Gundlach says that he will be looking… Read More

Small Caps Offer Opportunities, Especially When Rates are Rising

Chris Tessin of Acuitas Investments recently authored a piece for the InvestmentNews that outlined the historical pattern of micro-cap and small cap outperformance during periods of rising interest rates. Tessin notes that small firms have now lagged large cap names on a 1, 3, 5 and 10-year basis, and that relative underperformance is now producing an investment “opportunity”. According to Tessin, smaller firms have a history of outperforming during periods of increasing interest rates, and… Read More