Bonds

When Interest Rates Rise

On May 13, 1981, the three-month T-bill rate was 17.01%, when the Dow was under 1,000. During March 2013, three-month rates were 0.12%. When rates do begin to rise, whenever that may be, the over $30 trillion U.S. bond market may be in for a wild ride.

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Fixing Credit Reports

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401(k) Trustees

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Earnings Per Share

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MLPs

TIPS Concerns

Treasury inflation-protected securities (TIPS) are issued by the U.S. Treasury and are designed to keep pace with CPI increases. The first TIPS were issued in 1997. TIPS comprise two parts: a real return and a CPI adjustment every six months. The “moving part” is the CPI change. The “real return” is a locked-in rate that stays the same until the maturity date. Investors earn a fixed rate of interest on an ever-increasing amount of principal.

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Grey Divorces

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Client Language

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Oil

Municipal Bond Default Update

The long-term default rate for GO bonds, which represents 40% of the municipal bond marketplace, is just 0.01%. According to Municipal Market Advisors, municipal bond segments with the highest default rates are: [1] community development districts (17% of issues), [2] assisted living (5% of issues), [3] independent living (4% of issues), [4] nursing home (3% of issues), and [5] telecom (3% of issues).

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High-Yield Bonds

High-Yield Bonds

From 2008 to 2012, investment-grade and high-yield corporate bond funds doubled in size, to $1.2 trillion and ~ $250 billion, respectively. The U.S. junk bond market is estimated to have an overall value of $1 trillion. Over the past 15 years, the “spread” between high-yield corporates and Treasurys was six percentage points. As of February 2012, the high-yield bond index was yielding 7.3%, far below its 15-year average of 10%.

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I Savings Bonds

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High-Yield Bonds

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