March 3, 2015 |
Haverford Trust's John Donaldson has prepared his client portfolios for an interest-rate hike - but he doesn't think it's going to be severe, or happen any time soon. "Rates are still very low by historical measures. We feel fairly confident the Fed is not going to do a repeat of the 2004-2006 years with 17 meetings of increases. That's not going to happen," says Donaldson, Radnor-based director of fixed income. "But it's reasonable to go from zero to 1 percent," he says, perhaps even by next year, at which point the central bank could pause and consider the effect of the rate hikes.
November 1, 2013 |
Attention, municipal bond investors. You may love tax-free bonds, but Cumberland Advisors, of Vineland, N.J., is veering away from the troubled muni bonds of Puerto Rico - even though some in the hedge-fund community are embracing this high-risk trade. "We certainly hope that the Commonwealth of Puerto Rico finds a way to avoid any defaults. We are not cheering for the demise of this beautiful island," Cumberland noted. But 45 percent of its 3.5 million inhabitants live below the poverty line, Cumberland said, and the debt-to-gross-national-product ratio is estimated at 140 percent, if the pension liability is included.
January 16, 2013 |
If you were lucky or smart enough to buy U.S. Treasuries years ago, when those bonds were yielding high single-digit returns or higher, then there is no reason to sell them now. However, if you have new money to put to work, should you avoid U.S. Treasuries? Probably. Short- and longer-term interest rates essentially didn't move in 2012. While there were fluctuations, short-term interest rates remained close to a paltry zero level, with longer-term Treasury bonds yielding just 2.5 percent to 3 percent.
October 24, 2012 |
We receive pleas for assistance from readers quite often, especially those holding hard-earned savings in certificates of deposit, or bank CDs. The interest rate earned on these is not even keeping up with inflation, currently tracking between 1 percent and 2 percent. Cry for help received! Series I savings bonds can offer savers a way to earn better-than-average returns. Sold by the U.S. Treasury, I-bonds offer rates that fluctuate with the inflation rate, which usually increases when the economy improves.
February 7, 2012 |
With the government pumping money into the economy and the Federal Reserve pledging to keep short-term interest rates low until late 2014, inflation could soar. What's an investor to do? Pure savers will lose. Low interest rates mean that your deposits aren't going to earn much of anything for the next three years. You're going to lose money on holding cash - after inflation. JPMorgan's Chris Millard explains that with a 2.0-2.5 percent inflation rate, "that means if you leave your money in cash for the next three years, you lose 2.5 percent of that every year.
January 24, 2012 |
Corporate bonds are grabbing the spotlight these days as investors grow desperate for yields above rock-bottom U.S. Treasuries, which are returning just 3 percent or so annually. We asked one reader, Karl O. Koch, to allow us to reprint his question: How does one go about buying corporate bonds? We'll show you the ways to buy individual corporate bonds and bond funds, the pros and cons of each, and the fees to watch out for. Retail investors can research company bonds' risk via credit ratings.
March 23, 2011
School District faces hiring dilemma The Philadelphia School District is faced with a real dilemma. Nearly-fired teacher Hope Moffett was trained by Teach for America, an organization that selects only the most involved, the best, and the brightest ("Moffett calls her return an 'ideal teaching day,'" Tuesday). The district claims it is diligently seeking teachers possessing such qualities. Unfortunately, however, these candidates are notorious for speaking up when they detect policies and actions that are not the best and brightest.
March 1, 2009 |
Investing in the stock market hasn't paid off well lately. But what about bonds? It all depends. And, as with stocks, venturing into the world of bonds requires study and caution. Get those at these sites. Bond basics. This site by the Securities Industry and Financial Markets Association, a trade group, has information for people just considering bond investments and for seasoned investors. It bills itself as a "source of bond price information and includes a wide variety of market data, news, commentary and information about bonds.
February 15, 2000 |
Your bond investment, the one you bought to protect yourself, has been losing money. Or, if you're lucky, your bonds are breaking even, but you still would have been better off in a money-market account. What's going on? Why do bond investors feel as if the shelter they bought keeps crashing in on them instead? Rising interest rates, which push down bond prices, are the culprit. Trying to keep a strong economy in check, the Federal Reserve has raised interest rates four times in the last year, punishing bond investors.
September 8, 1998 |
If the S&P 500 finally crashes, and if corporate earnings go flat, and if Microsoft, Intel and Dell join other pricey tech stocks in a race to the bottom, David Baldt's clients could still expect to make money from his investment choices. That's because Baldt is a bond guy - head of the Philadelphia-based fixed-income team at Morgan Grenfell Capital Management - in a year when bonds, despite low and declining yields, have still outperformed stocks for the first time since George Bush was president.