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Bond investors brace for the end of Fed stimulus

Friday, October 10, 2014 - 04:04

Some fixed income investors are becoming more conservative in their portfolio allocations while one is actually buying company stock instead of corporate bonds.

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We're inching closer and closer to the end of quantitative easing. That's the Federal Reserve's bond buying program meant to stimulate the economy and it's lines down. Volatility crop up in the usually stapled treasury market. That's had an effect on some fund manager's strategy. We try to be fairly conservative in our credit exposure. We don't like to take too much greater risk we think a lot of security a lot of credit risk. Are overpriced people are trying to get 8910%. Returns on securities. We don't like most of those so we. Are sticking with them the safer. Securities and we think that we can learn consistently courted -- person. And before we heard these types of securities. Singletary expertise isn't mortgage debt what way he -- you can prepare for rising rates he is by holding some adjustable rate mortgages. Another big factor for the bond markets is the recent and significant rise in the US dollar which is trading your for your highs. Aches and that's as great greet me uneasy about investing overseas. Typically when the delegates stronger it has an impact on inflation overall easily lowers inflation. But more importantly it has an impact on emerging market economies especially local currencies. And local countries that have to funded US dollar of those countries typically. -- lower we expect that's gonna happen over the course of some what the fourth quarter but more as we move into 2015. He's not -- emerging markets entirely. But he is steering clear debt base in local currencies. With so many concerns. Looming over bond market's advance is Kathleen Gaffney says -- extent of investors to break from tradition. On the investment grade side we're actually using our flexibility within the Eaton Vance unsigned. Two. Use equities I would rather owned caterpillar comment then caterpillar debt today. On the high yield side again it's more equity light rather than owning traditional high -- we're looking at equity sensitive converts. Or high yield bonds -- actually have some credit risk to them JC Penney and Dell computer are good examples. Of credits that have a lot more to do with what's going on at the company and which direction interest rates are headed. It's not just -- fighting fixed income investments stop picking can be difficult to. Investors prefer using ETS in their portfolios. We -- ahead of ETF provider direction about it all happens -- fun. Which isn't an insider buying and selling is the way to put together a portfolio. Essentially you're sorting through the basic index but then going further in saying OK let's take a look at insider trading. And that insider trading gives you an idea what might be a more attractive stock to own first the entire index by being able to do that and do that methodically and repeatedly. You're able to generate an attractive return. And in our small -- spotlight this week a company you've probably never heard up. John Barr who manages the neat aggressive growth fund is -- -- KPH industries a data and video service provider for the maritime industry. Our calls the company that Netflix that disease he says Katie -- as boosting its business through acquisition. There are two key acquisitions they've done for content and content is king video tell. Brings down the leading provider of training for -- fares. And the training should be delivered the same way over the satellite. To the -- rather than ship to -- ports and then delivered to the -- The second that they bought was this Hedlund media about a year ago and Hedlund has agreements with content providers. And had so provides movies and entertainment and news I'm rob the shop are forecasting a lot.

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Bond investors brace for the end of Fed stimulus

Friday, October 10, 2014 - 04:04