It’s practically an investing axiom that government bonds are much less volatile than equities. But that depends on how you look at it. In fact, our research suggests that income streams from stocks are actually much less volatile than those of government bonds. (more…)
US interest rates look set to rise in 2015, and that’s unsettling for some fixed-income investors. But here’s the good news: US bonds aren’t the only game in town. (more…)
Nelson Yu and Morgan C. Harting
Emerging-market (EM) equities are far more turbulent than their developed-world peers. But there are several things investors can do to capture the attractive return potential while reducing volatility. Staying active is the lynchpin for success. (more…)
Financial markets have faced an increasing array of geopolitical risks this year. In our view, investors should put these events into the right context and focus on how individual companies might be affected when considering their potential impact on equity positions or allocations. (more…)
In late 2013, the 10-year US Treasury yield hit 3%, spooking investors who thought the bond bubble was bursting. Prognosticators urged investors to abandon bonds. And then—they waited. (more…)
Kent Hargis (pictured) and Chris Marx
After nearly nine months of calm, equity market volatility has returned and is threatening investors with the prospect of losing money. We believe the recent episode in US and global stocks reinforces the case for having a strategic allocation to equities that can withstand shocks. (more…)
Seth J. Masters and John McLaughlin
Many investors with little appetite for risk think cash is the safest asset class. After all, if you have no investments, you have no investment risk. That’s true enough, but it’s reassuring only if you ignore inflation and taxes. And of course, most individuals do pay taxes and everyone experiences inflation. (more…)
Many investors think US stocks are due for a correction: They feel that the market has run too far, that the Fed has been slow to act, that complacency has created pockets of excess. Do these gut feelings mean a major equity correction looms? Not yet, in our view.
High-yield bonds’ attractive income has made them popular in today’s low-rate environment. But market complacency has caused callable-bond investors to ignore a lurking risk: duration extension in a rising-rate scenario.