| November 26, 2010 | |
|
In This Issue
Stay Connected Our website provides you with constantly updated information on many areas that impact investors. Get the latest strategies, media clips, on-line calculators and more today. Visit the Knowledge Center Today
How May We Help You? To learn more about our services and find out why Investor Solutions is the right move, simply fill out our information request form.
Visit Our Retirement Center Get informed with hundreds of articles dedicated to retirement strategies, as well as media clips, on-line calculators and more. |
Greetings, Controlling Interest Rate Risk
There has been tremendous talk in the financial media about the possibility of a bond bubble building in the fixed income markets. In response to the financial crisis of late 2008, investors have been trying to mitigate risk by moving assets into less risky investments. The Investment Company Institute reported that from January 2008 through June 2010, outflows from equity mutual funds totaled $232 billion while bond funds have seen $559 billion of inflows. Most investors view bonds and bond mutual funds as a safe haven often failing to realize that you can lose a lot of money in bonds particularly when you are investing funds into securities that are at historically low yields. Whereas a US Ten Year Treasury note yielded 3.97% in January 2008, it currently yields 2.80%.
Seeking Alpha's Jason Aycock recently interviewed Jason Whitby about what Jason would own (or short) if he could choose just one stock or ETF to own. The interview raised some very important and thought provoking points which we wanted to share with you.
Individual Bonds: What the bond traders are hiding For 3 years I worked on one of the best and largest bond trading desks in Chicago. We had some monster companies as clients like Microsoft, Cisco, Ebay and Amazon. We had the ability to implement various strategies. I had access to limitless information, up to the second news wires, instantaneous pricing software and trade information, and favorable pricing because of our order size. Most importantly this was all at my fingertips, easily accessible and decipherable. We had a wealth of knowledge and years of experience, which is why it comes as a surprise to me why an individual investor would want to dabble in the same market as us. Why do individual investors without all these things buy individual bonds as opposed to just buying a bond mutual fund? I see it all the time though. They take on more risk, pay higher costs, are late to react to a company’s changing financial structure and they are often uninformed about what they are actually holding.
|
|
| (305) 443-3339 / 800-508-8500 Disclaimer: Investor Solutions, Inc. is an Investment Advisor registered with the Securities and Exchange Commission. This newsletter is for information purposes only. Information on this newsletter and our website, whether charts, articles, research papers or any statement regarding market or other financial information is not to be construed as investment advice. You should consult your investment advisor, accountant or attorney prior to implementing any investment or financial planning strategy.
© 2010 Investor Solutions, Inc. All Rights Reserved. 3250 Mary Street, Suite 207, Miami, FL 33133
|
|
