Tag Archive

PIMCO’s Bill Gross Cashes in U.S. Treasurys. What Should the Rest of Us Do?

By John S. Tobey

It’s official. Bill Gross is divorced from the U.S. Treasury. The PIMCO Total Return Fund, the largest U.S. mutual fund at about one-quarter trillion dollars, now holds no U.S. Government securities. What’s up? Is the U.S. about to be downgraded? Is it bankrupt? Or is this a political thing? None of the above, according... »

Investors Jump Back Into U.S. Stock Mutual Funds

By John S. Tobey

The Investment Company Institute just reported the second week of significant inflows into U.S. stock mutual funds. The two-week total (through January 19) is $6.7 billion. Is this a sign of the top? Absolutely not. It shows the investors have shaken off 2010’s mega-risk/global-risk mindset that produced 34 straight weeks of U.S. stock mutual... »

The Fed’s Unbalanced Decision: Stockholders Win, Bondholders Lose

By John S. Tobey

The Federal Reserve Open Market Committee decided to maintain the status quo (option #1 in the previous article, “Forecast for Bondholders: How the Fed’s Dilemma Will Affect You”). What does this decision mean for investors? »

Forecast for Bondholders: How the Fed’s Dilemma Will Affect You

By John S. Tobey

Previously, I discussed whether the Fed was paying attention to inflation’s apparent resurgence (“Tame Inflation Just Growled – Is the Fed Listening?”). Today, let’s talk about the box the Fed is in, what its choices are and how the direction chosen would affect bondholders. (more) This article is posted on SeekingAlpha.com »

US Stocks vs. Bonds – The Obvious Choice

By John S. Tobey

Occasionally (rarely) there are times when the next investment trend is obvious. Today looks like one of those times. »

Retail Sales Indicate a Happy New (Stock Market) Year in 2011

By John S. Tobey

Do you have lingering doubts about the US economy? Is that worry keeping you out of the stock market? It’s understandable- We’ve been bombarded for months with warnings about impending crises and collapses. But it’s time to exit the past- The proof of recovery is here. Accepting that fact is the key to successful... »

Are Bond Fund Outflows a Warning Sign? Not yet.

By John S. Tobey

The Wall Street Journal proclaims, “As Bonds Flag, Stocks Beckon” (Abreast of the Market, by Mark Gongloff, December 6). Here’s their take: “After a stellar two-year run, the bond market is stumbling and a number of investors are betting that stocks will post better returns in the coming months. “Among the signs being held... »

Bondholder Alert: Disconcerting News from the Federal Reserve

By John S. Tobey

Fed Vice Chair states the obvious. Two lessons learned: Easy money can lead to leverage and speculation Markets cannot be counted on to self-correct Wow! That reaction is not for the lessons. It’s for the admission that the Fed had to relearn them. US financial history is filled with examples. Indeed, the Federal Reserve... »

/Quick Point/ – Goldman Sachs Says Sell Bonds, Buy Stocks

By John S. Tobey

Paraphrasing the tag line in the old EF Hutton ad, “When Goldman Sachs speaks, investors listen.” »

Is the Bond Market Changing Direction?

By John S. Tobey

Whether you call it a bubble or not, investors’ love affair with bonds may be ending. Longer-term bond losses in the last three weeks have been about one-half year’s interest income. It may not seem possible. After all, corporate bond yields rose only 0.22% from their 3.74% historic low on August 24 to 3.96%... »

Vanguard’s New ETFs Defy Anti-US Stock Trend – Do They See Something Coming?

By John S. Tobey

Customary Wall Street practice is to follow the trend. Investment product creation and marketing tends to take the easy road. By focusing on what investors want now, firms figure they will simply change tactics when people want something different. In the end, however, the investor-client base that bought near the top feels taken advantage... »

Scrambling for Income? Avoid Being Carried Away by the Crowd

By John S. Tobey

The search for income is in high gear. With short-term investments providing little yield, investors are seeking out alternatives. There are large flows into all types of bonds, including riskier emerging market (third world) and low quality (junk). Even specialty securities like royalty trusts are finding wider appeal. Are these moves unhealthy and signs... »

Deflation – How It Can Exist Even As the Economy Recovers

By John S. Tobey

Deflation is being presented as a force that trips up the economy. The simple reasoning: As prices fall, consumers and businesses postpone buying, thereby causing prices to fall further. Hence, a downward-spiraling cycle. Like many of the negative forecasts we have read over the past months, this one is overly simplistic. It ignores two... »

Bond Rating Agencies Now Held Liable – Why That Is a Good Thing

By John S. Tobey

A provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act is the liability of bond rating agencies (e.g., Moody’s and Standard & Poor’s) whenever their ratings are included in formal SEC registration materials. The result: The bond rating agencies now are  disallowing their ratings from being used. Without them, securitized bond offerings... »

A Double Dip to Enjoy: Interest Rates

By John S. Tobey

There continues to be an ongoing discussion about the economy potentially double dipping (AKA a repeat performance of the 2007-2008 bad times). Along with that worry is the stock market plummeting, with some pundits predicting a calamitous plunge. (I think Robert Prechter holds the current record with his Dow Jones Industrial Average forecast of... »

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