July 22, 2013 |
Investing in bond mutual funds is easy. At least, it was for decades. Investors could count on steady interest payments. Their funds also benefited from rising bond prices as interest rates made a three-decade-long march downward after 1981. When yields fell, bond prices rose: Each step lower made the bonds held by mutual funds more attractive because they offered higher rates than newly issued bonds. But the tide has shifted. Many analysts say we have hit a bottom for interest rates, and the yield on the 10-year Treasury note has climbed to 2.5 percent from 1.6 percent at the start of May. The rise in rates has led to losses for many bond mutual funds, and it's something investors need to get used to, says Rick Rieder, chief investment officer of fundamental fixed-income portfolios at BlackRock, the world's largest asset manager.
May 1, 2013 |
Ahead of the key Federal Reserve meetings Tuesday and Wednesday, bond investors are asking themselves a hard question: What will happen when inflation and interest rates inevitably rise and bond prices fall? The Fed, to a large extent, has kept interest rates at rock-bottom levels, so bond investors are holding their collective breath to see what the agency decides next. If rates rise, the market value of government bonds in particular - and all bonds in general - could be hurt significantly.
April 26, 2013
Kathryn Wasserman Davis, 106, a globe-trotting philanthropist who provided the start-up funds that her husband, Shelby Cullom Davis, used to become one of America's most successful investors, has died. She died Tuesday at her home in Hobe Sound, Fla., her family said. No cause was given. Ms. Davis' father, Joseph Wasserman, was the longtime chairman of the Artloom Corp. of Philadelphia, a maker of Wilton rugs. His fortune survived the market crash of 1929 because he was "part of a canny minority who kept their money in government bonds," John Rothchild wrote in his 2003 book, The Davis Dynasty: Fifty Years of Successful Investing on Wall Street.
March 30, 2013 |
FRANKFURT, Germany - This week's deal to rescue Cyprus and its banks from financial collapse has renewed fears about Europe's shaky financial system and where trouble might next appear. Many banks have been struggling for more than three years as losses on government bonds and bad loans pile up. Some governments, meanwhile, have taken on more debt trying to prop up their banks, to the point where they needed bailouts themselves. In Cyprus' case, the banking sector became bigger than the government could afford to rescue, seven times the size of the economy.
February 8, 2013 |
NEW YORK - Stocks were flat on Wall Street as the latest round of earnings reports failed to give investors an impetus to push the market's recent rally forward. The Dow Jones industrial average rose 7.22 points to 13,986.52 on Wednesday, after trading slightly lower for most of the day. The Standard & Poor's 500 rose 0.83 point to 1,512.12. The Nasdaq composite was 3.10 points lower at 3,168.48. Time Warner rose $2.05, or 4.1 percent, to $52.01 after the company said its net income grew 51 percent in the last three months of 2012 even as revenue was largely unchanged.
January 29, 2013 |
Earlier this month, we spoke with investors who are avoiding long-term U.S. Treasury bonds. Now we have come across one fund manager who is actually shorting Treasuries - basically, betting they will fall in price - and taking advantage of what he terms is the coming "bear market in government. " Michael Aronstein is president and portfolio manager of the Marketfield Fund (MFADX), a $4.4 billion mutual fund that returned just over 13 percent in 2012 and 8 percent annually since inception in 2008.
January 4, 2013 |
NEW YORK - A two-day rally in the stock market came to an end Thursday when an account of the Federal Reserve's last meeting revealed a split among bank officials over how long the Fed should keep buying bonds to support the economy. The Dow Jones industrial average and the Standard & Poor's 500 index treaded water much of the day, then slid into the red about 2 p.m., after the Fed released the minutes from its December meeting. The Dow ended with a loss of 21.19 points, at 13,391.36.
November 15, 2012 |
NEW YORK - Investors drew little hope Wednesday for a quick compromise in U.S. budget talks after President Obama insisted that higher taxes on wealthy Americans would have to be part of any deal. Stocks fell sharply, and even a signal from the Federal Reserve that it could launch a program in December to speed job growth failed to encourage investors. The Dow Jones industrial average dropped 185 points. Obama made clear he would seek higher tax revenue from the wealthiest Americans, an idea that faces Republican opposition in Congress.
October 21, 2012 |
BRUSSELS - European leaders took a step toward creating a single supervisor for banks in countries that use the euro on Friday but refused to pin down a start date. Although the leaders meeting in Brussels said their decisions on the watchdog , the single supervisory mechanism , were key to shoring up lenders and eventually giving them access to loans from Europe's bailout fund, many observers were struggling to figure out exactly what had been achieved. Rather than finding new measures to fight the crisis, the leaders focused on establishing a timeline for those they had already agreed to. "It is good for Europe that we'll have a single supervisory mechanism up and running in the course of 2013," Herman Van Rompuy, president of the European Council, which includes the leaders of all 27 EU countries, said Friday.
September 28, 2012 |
ATHENS, Greece - Europe's fragile financial calm was shattered Wednesday as investors worried that violent anti-austerity protests in Greece and Spain's debt troubles showed that the continent still cannot contain its financial crisis. Police fired tear gas Wednesday at rioters hurling gasoline bombs and chunks of marble during Greece's largest anti-austerity demonstration in six months. The protests were part of a 24-hour general strike, the latest test for Greece's nearly four-month-old coalition government and the new spending cuts it plans to push through.