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Archive for the 'bonds' Category

Man Bites Dog

Thursday, October 15th, 2009, by

In times past, the largest mutual fund extant was the Vanguard 500 Index Fund. Not now.  Every fund family seems to have its own index fund, and the novelty has worn off somewhat. Now, surprisingly—it’s not even a stock fund in the number one slot. The reigning big dog is (now part of the huge […]

Locking the Barn Door

Monday, September 21st, 2009, by

Individual investors are once again proving to be remarkably consistent and predictable in their collective response to the historic bear market of 2008-2009. By which, I refer to their unerring instinct to buy at the top…and sell at the bottom. It was just a year ago that the world was coming to an end.  Stocks […]

Finding Yield…A Variation on Sticker Shock

Thursday, August 13th, 2009, by

The much maligned banking sector has been racking up some impressive profits the past quarter. No mystery there.  The Feds have driven down the cost of funds to near zero–an advantage that makes it almost impossible to lose money, assuming they can now find borrowers capable of repayment. Maybe easier said than done. But their […]

Thinking the Unthinkable, Part II

Tuesday, July 28th, 2009, by

So, what is the root cause of the municipal debt crisis? Simply this: The drivers of deficit municipal spending are not subject to any market discipline. Businesses can be extinguished by involuntary bankruptcy, but the powerful municipal unions know that their concentrated lobbying pressure is more effective with legislators than the generalized pain endured by […]

Thinking the Unthinkable, Part I

Monday, July 27th, 2009, by

Everyone knows that Muni Bonds have an ultra-low default rate. Just as everyone knew that with our highly evolved economic tuning, prolonged recessions were now only an historical artifact. It’s amazing how quickly the market has shed its risk aversion. Witness the spectacular returns in junk bonds so far this year. And the yields on […]

Working Both Sides of the Balance Sheet, Part II

Tuesday, July 14th, 2009, by

Picking up on our theme of intelligent debt applications, it might help if we examined the ramifications from being a borrower in a world about to be engulfed in inflation.We have just this past year concluded a remarkable bull run in the bond markets, that began in the early 1980s, and finally reached bottom when […]

Are You a Stock or a Bond?

Friday, May 22nd, 2009, by

It’s not a rhetorical question. Your risk preference as an investor is dictated to a large extent by the degree to which your income is stable. For example, if your income is derived from commissions or other highly variable compensation structures, you have, in essence,  income characteristics more resembling a stock than a bond. The […]

Stable Value Funds go Wobbly

Wednesday, April 8th, 2009, by

Just when I thought we had begun to run out of asset classes to trash… I ran across Eleanor Laise’s Fund Track column, “Stable Value? Chrysler Fund Shows Woes Still Lurking” in the Wall Street Journal (April 3, page CI). You most likely have this fund option in your 401K plan…and you no doubt interpreted […]