Bonds Still a Reliable Safe Haven

After years of market calm, volatility is back, but investors’ faith in bonds has been “shaken” by years of low interest rates, according to a recent Bloomberg article. But the article advises not to “assume that bonds’ muted outlook will hamper their ability to hold up during market downturns. In fact,” it adds, “during the 20 bear markets since 1928…the average return from long-term government bonds was 5 percent, and the median return was 3.2… Read More

Investors Not Buying this Bull Market

Even though the S&P continues to hover over a new record high, investors don’t seem to be buying it–metaphorically or literally. This according to journalist James Mackintosh of the Wall Street Journal. Instead, funds are flowing into safer investments. Not so much in the direction of bonds, which are showing paltry returns (the 10-year Treasury bond has hit new lows) or in sexy stocks, but rather in “bond-like” equities. The two sectors with the most… Read More

The Age-Old Relationship of Risk and Return comes into Question

“High risk, high reward” is the stock market’s version of “no pain, no gain.” But a closer look at the numbers sheds a slightly different light on this age-old tenet of investing. An article in last week’s Economist described some uncanny findings presented in a paper by Malcom Baker of Harvard Business School. Baker studied two separate stock portfolios since 1967; one consisted of 30% low-beta stocks (low-volatility) and the other of 30% high-beta stocks.… Read More