Posts Tagged ‘Bonds’
Tuesday, July 19th, 2011
To Our Valued Clients,
We sent to you a week ago an e-mail that included a discussion of what is going on with the debt ceiling legislation under a heading that read, “July Could Be A Volatile Month-Buckle Up.” If you didn’t have a chance to read it, here is a link: http://www.starmont.com/2011/07/market-and-debt-ceiling-update/
Where Are We Now?
The date at which the United States Treasury runs out of cash and could start defaulting on the payment of principal and interest on Treasury bills, notes and bonds is only 15 days away.
No resolution is in sight from the White House and Congress, although there are numerous plans being floated in Washington.
Stock and bond markets have been rather blasé about this until today, when the Dow closed down around 100 points. As the drop dead date of August 2nd gets closer with no resolution, we expect increased volatility in the markets.
Ask just about anyone in the investments business why there has been little interest in this topic and they will say, “It’s all a bunch of political posturing, and by August 2nd they will have raised the debt ceiling.”
Maybe. But maybe not.
And the consequences of Maybe Not could be severe.
We are only speculating, since the United States has never defaulted on its debt in its over 200 year history as a country. But here is what could happen:
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Tags: asset management, Bonds, Congress, Debt Ceiling, economic outlook, Harvey Rowen, Investments, market performance, Portfolio Management, Starmont, Wealth Management
Posted in Blog, Client Communications, The Market | No Comments »
Monday, July 11th, 2011
To Our Valued Clients and Friends
June started out badly, but rallied at the end of the month and closed only moderately down for the month. (Markets were down for the month, but are up for the year. See below).
The major U.S. stock indexes were down from 1% to 2.5% for the month. The EAFE index (Developed International Markets) was down 1.2%, and the iShares EEM (Emerging International Markets) was down 0.94%. For the year through June 30th, all major domestic and international stock indexes are up, from 8.6% for the DJIA and Russell 2000 (domestic small cap) Growth; to 0.91% for the iShares EEM.
Domestic and international bond indexes were negative for the month, with the Barclays Capital U.S. Aggregate Bond Index down 0.45% and the Barclays Capital Global Treasury Ex-US Index down 0.01%. For the year through June 30th these indexes are positive.
Commodities and REITs, both domestic and international, were negative in June, and the commodity index has gone negative for the year.
All Starmont Client portfolios are positive for 2011 through June 30th—with the amount dependent on how their assets are allocated among the various asset groups. So far in 2011 the higher the allocation to equities, the better the portfolio performance. Your First Half Reports will be sent to you later in the month.
July Could Be A Volatile Month—Buckle Up!
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Tags: asset management, Bonds, Congress, economic outlook, Economy, Harvey Rowen, Interest Rates, Investments, Portfolio Management, U.S. economy, Wealth Management
Posted in Blog, Client Communications, The Market | 1 Comment »
Wednesday, June 22nd, 2011
Live Very Very Long and Prosper
As more people live into their 90s and beyond, financial planning becomes even more important—and trickier
by Suzanne Barlyn
“Funding a retirement well into my 90s, though, could require investing more in equities until age 70, says Vivian Groman, senior adviser at Starmont Asset Management in San Ramon, Calif. How much risk I accept should depend on how much I’ve saved, my lifestyle and the health of the economy at that time, Ms. Groman says.”
To Read Article Click Here
Tags: asset management, Bonds, equity allocations, investing for retirement, investment management, Investments, Portfolio Management, retirement, retirement planning
Posted in Blog, Starmont In The News | No Comments »
Tuesday, May 3rd, 2011
1st Quarter Summary
The equity rally of the last three months of 2010 carried over into the first two months of 2011. Then the earthquake, tsunami and nuclear problem in Japan, and the events in North Africa and the Middle East stalled the market in early March. This was followed by significant drops in mid March, and then a recovery in late March. This created a mostly flat month for the domestic equity market, a down month for the developed international market, and an up month for the emerging international market. We expect global equity markets to behave like this more often than not going forward given all that is happening in the world at the present time.
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Tags: asset management, Bonds, economic outlook, equity allocations, Harvey Rowen, investment, market performance, Starmont, Stock Market
Posted in Blog, Client Communications, Messages to Starmont Clients, The Market | No Comments »
Friday, March 18th, 2011
Is the Stock Market Getting Its Mojo Back?: Find Out Why 2011 Could Be the Inflection Year for the Stock Market
After a decade of the stock market underperforming historical norms, the economic winds seem to have changed. 2011 may be the year that the stock market returns to its historical long-term performance. At Starmont we have been increasing the equity allocation in most of our Clients’ portfolios. Harvey Rowen, Starmont’s CEO and Chief Investment Officer, discusses the thinking behind this strategy and answers frequently asked questions on topics like the next correction, buying gold and the outlook for bonds.
Click Here To View Slides
Tags: asset management, Bonds, equity allocations, Harvey Rowen, Starmont, Stock Market Performance
Posted in Blog, Client Communications, Messages to Starmont Clients, The Market | No Comments »
Tuesday, November 16th, 2010
Harvey Rowen, Starmont’s CEO and CIO, was recently quoted in a Pittsburgh Post-Gazette story on what some perceive to be the current bubble in bonds.
Referring to the current situation in which interest rates are low and bond values are high, Harvey offered some suggestions that investors and/or their investment advisors can take to protect themselves from loss when interest rates go up and the value of outstanding bonds goes down.
The link to the story is posted in the Starmont in the News section. Click here to go there.
Tags: Bonds, Investments, Investors, Pittsburgh Post-Gazette, Starmont
Posted in Blog, Starmont In The News | No Comments »
Tuesday, April 27th, 2010
The Great Recession is over. Don’t pay attention to the Business Cycle Dating Committee of the National Bureau of Economic Research which says it’s too early to call this. There is always somebody who doesn’t get it. Just look around. GDP is growing, and the stock market is up. Companies are hiring temporary help, the step before hiring permanent help. Consumers are spending again, although cautiously. Go to a mall, or a restaurant, or the movies, or an airport, and there are more people there than there were six months ago.
But that doesn’t mean that it is OK to take risks just yet. The recovery is very fragile. Another dip in the economy (the dreaded Double Dip) is possible, although not likely absent a policy error on the part of the Federal Government. Some parts of the world, particularly Euroland and Japan, are having financial difficulties. Individuals and governments are trying to pay off debt they incurred during the party that caused the Great Recession. So you have to be prudent about where you are going to put your money—and for how long. (more…)
Tags: Bonds, Great Recession, Investment Company Institute, Stocks
Posted in Blog, The Market | No Comments »
Thursday, March 4th, 2010
Cigarette makers are required to put health warnings on their cigarette packages. Maybe the Government should be required to put wealth warnings on its decisions.
Federal Reserve Bank Chairman Ben Bernanke has released a game plan for raising interest rates, and has already started to implement that decision with the Fed raising the Discount Rate on February 19th. Other rate rises are sure to come, including rises in the Federal Funds rate—it’s just not clear when and by how much. Rising interest rates mean lower bond valuations for outstanding bonds and higher costs to individuals and businesses carrying various kinds of debt.
The so called Bush tax cuts are scheduled to expire on December 31st of this year. Absent legislation (which is unlikely to come from the current dysfunctional Congress), income tax rates, capital gains tax rates, and estate tax rates will rise January 1, 2011.
Investment accounts need to reviewed and adjusted as necessary in light of these developments. (more…)
Tags: Bernake, Bond Yield, Bonds, Federal Reserve, Interest Rates, Investments, Taxes
Posted in Blog, The Market | 2 Comments »
Friday, February 5th, 2010
Massachusetts Senate Election Creates Uncertainty in Washington
Stock prices normally are driven by earnings and how those earnings are valued (think p/e ratios). Earnings are impacted by the state of the economy. The economy appears to be recovering, although slowly, from its near death experience in the Fall of 2008. So why the 3.5% drop in the market in January?
The victory of the Republican Senate candidate in Massachusetts on January 19th, and the implications of that victory for the passage of the Health Care legislation, or indeed the passage of any major legislation in 2010, roiled the market.
President Obama’s 70 minute State of the Union message the following week indicated that he and his people still are having trouble focusing on just a few priorities to which they might be able to get the Congress to agree
Markets hate uncertainty. And there is nothing but uncertainty in Washington at the moment.
Tom Friedman wrote in the New York Times from the World Economic Forum in Davos, Switzerland that he was being asked about “political instability” in the United States, something he says he has never heard before. “We’ve become unpredictable to the world” writes Friedman. “We’re making people nervous.” And markets hate political unpredictability. That is why people traditionally invested in the United States, instead of in Russia, or Iran or Honduras.
(more…)
Tags: Bonds, CDs, Economy, Stock Market
Posted in Blog, The Market | 4 Comments »
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