Article Category: Inflation

Seasonal Pattern in Treasuries?

Most investors are familiar with the seasonal pattern in stocks, encapsulated by the old adage, "sell in May and go away." But is there a similar pattern on the fixed income side of the equation? That's what we're going to take a look at today.

Back in 2015, three researchers, Mark Kamstra, Lisa Kramer, and Maurice Levi, wrote a research paper titled, "Seasonal Variation in Treasury Returns." What they found is that the U.S. Treasury market exhibits an annual cycle in which average monthly returns vary over 80 basis points (%) from peak to trough.

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Posted in: Bonds Dollar Federal Reserve Inflation Interest Rates

Corrections are Healthy, Even This One

What's the difference between a correction and a bear market? This seems like a straightforward question, but if your answer has anything to do with percentage declines (as in, a correction is a drop greater than 10%, while a bear market is a decline greater than 20%), you're missing the point.

While those are the generally accepted thresholds that the financial media uses to define corrections and bear markets, I'd argue those definitions are completely arbitrary and serve little purpose other than general classification.

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Posted in: Corrections Federal Reserve Inflation Interest Rates Primary Trend

The Footrace Takes a Turn

After well over a year of smooth sailing, we finally hit an air pocket ... and you know what? It's about time. Markets that go straight up are unnerving, even if you're positioned correctly, and even if history suggests that more gains lay ahead.

We'll get to that last part in a moment, but first, let's talk about what's at the root of this selloff. The first thing we must acknowledge is that over the last two months, this market has been rising at an unsustainable pace.

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Posted in: Corrections Dollar Earnings Federal Reserve Inflation Interest Rates

How to Think About Hedging Against Inflation

One of the topics that seems to be on the minds of investors right now is the idea of rising inflation. The recent global economic upturn, combined with a stimulative tax package, is causing some to believe that we're about to see the whites of inflation's eyes.

If that truly is the case, how should we handle this as investors? Should we move our portfolios into asset classes that have been deemed good "hedges" against inflation?

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Posted in: Federal Reserve Gold Inflation Interest Rates Volatility

More to Come?

Last year over $9 trillion was created in stock market value across the globe- a clear example of how and why stocks remain the best asset class for creating wealth.

How did bonds do?

Using AGG as a proxy - the ETF that tracks the U.S. Aggregate Bond Index - we can see that bonds provided a 3.45% total return (dividends included). This compares to a 20.78% total return for the S&P 500, evidenced by its ETF - SPY.

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Posted in: Bonds Dividends Earnings Economy Inflation Volatility

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