Market up today. Why? Oversold and everyone too bearish. Is it a long term bottom? Hell no. People is stupid. They will all get excited with a 100 point move in the SPX... then to 1600...
Well that does sound like a weird portfolio. But we all build them differently to fit our different needs. I've had some bad days this year but I'm actually just looking forward to these dips as it enables me to buy more with a better price.
I haven't touched treasury bonds at all in many years - not for clients, nothing. Been buying a bit more gold lately.
Today I looked at some of the t-bill rates.. because I have a bit of cash just sitting there and I haven't really figured out how to get it to beat inflation while still keeping it liquid and super safe. Well t-bills weren't going to cut it with their silly yields. For the treasury bonds... well I guess it would be an option if you can't find better corporate bonds for the same maturity but I get the feeling that you won't have any issues finding those.
I guess that those who are heavily invested in the market are just going to have to take a wait and see approach. I mean the stock market tends to be a bit volatile anyway. It may be one of the things that we will just have to adopt a long term approach to, as investment professionals always recommend anyway. It may be that it will correct itself next week like Corzhenz says, barring any natural disasters or especially bad news.
A couple of problems with bonds as an investment (not talking income, whole other ballgame) in general these days (aside from relatively low coupons on the average) are: 1) that older bonds in the secondary market are trading at ridiculous premiums overall due to 7 years of zero interest; and 2) also that fairly young existing bond issues will tend to drop in value in the secondary markets as the fed continues to hike - IF they do, of course. It's been pretty tough to buy at a decent price in the secondary market in the last 7 years or so, and will likely be tough to hold relatively young existing bonds in general and not notice at least a little downside fluctuation as rates rise. I have found over the years that the best time to start buying existing corp and muni bonds as an INVESTMENT (not necessarily for income) is when rates are likely at their peak, and will likely soon be lowered incrementally for many months (and perhaps years) to come. When considering buying or holding any bonds in a tactical portfolio where income is not the primary objective, it is generally better to stick to short term debt when rates are low and likely to be rising... and to buy and hold longer term debt for a while when rates are high and likely to be coming down. When someone is buying bonds for income, they may not have the luxury of being able to wait and try to time the market just right.
This is exactly the thing nowadays though, there simply isn't any relatively safe short term debt out there that would be anywhere close to your average rate of inflation. Then again I'm investing for income... but the situation still remains the same with short term debt. I simply can't find anything out there that would be worth it. I do have longer term bonds and I don't mind using those, even in the current situation, as long as the yield to maturity and the risk profile meet what I'm after. That is for corporate bonds of course, I don't really see the point in grabbing government debt at these levels when I can easily match the current yield with stock from dividend aristocrats. All that being said, my main idea is to hold the bonds until maturity and just enjoy the coupon payments along the way.
I would buy gold or silver as a long term investment. It's always going to have value, and it's going to be safer for you to invest in than any government bond or treasury which could default. Isn't part of China's problem the fact that the US treasury bond investments couldn't be repaid to them in the first place?
The GBP's still falling against the dollar, but I'd expect it to straighten out fairly soon. It had to fall somewhat on the news of a referendum on Britain's place in the EU, but this situation is much less significant than many actually realize. Even if the people vote to leave the EU, it wouldn't happen straight away, if ever at all. Will still have to watch closely though. Things could get interesting.
it is almost as damaging to the EU if GB stays in the EU because you can look at all the concessions they got, and you are going to see some other countries wanted special treatment. I can imagine in many national elections there are going to be candidates stepping up who are going to run as a candidate who will demand more from the EU, especially on immigration issues. the deal the UK is getting is too good for other countries not to try it.
