Financial Advice for Retirement, Social Security, IRAs and Estate Planning

Bob's Blog on Retirement & Beyond

Learning from an Icon

May 9, 2011

Howard Marks of Oaktree Capital doesn’t appear much in the media. His clients generally are institutional investors: pension funds, endowments, and the wealthy. There’s not much value to his appearing in the regular media, because his clients learn about him other ways. Marks’ forte is investing in distressed assets such as beaten down stocks and […]

Losing Money in TIPS

May 6, 2011

Inflation fears cause people to buy more Treasury Inflation-Protected Securities (TIPS). TIPS have their principal value automatically adjusted for increases in the Consumer Price Index, so investors receive inflation protection that isn’t available from nominal treasury bonds. Unfortunately, the worst time to buy TIPS is when inflation fears are rising. The market price fluctuates with […]

Sinking Commodities

May 6, 2011

Investment markets find a way to correct excesses without much input from outside forces. Commodity prices have been soaring for a couple of years but became almost parabolic after August 2010. As prices rose, investors poured more money into commodities, and businesses and households hoarded some assets. The price increases led to higher inflation around […]

Abandoning Treasuries

May 5, 2011

PIMCO’s Bill Gross in his latest monthly commentary explains in more detail why PIMCO eliminated U.S. Treasury bonds from its portfolios. He’s not concerned about interest raising as quantitative easing ends His concern is that the Fed is determined to keep real treasury yields (market yields minus inflation) negative for an extended period of years. […]

Unwisely Fleeing Tax-Exempts?

May 5, 2011

I’ve been documenting the decline in tax-exempt bonds that began after Labor Day 2010. The decline became worse as investors saw more headlines about the troubled finances of state and local governments. These headline were followed by forecasts of high default rates in the next few years. Investors have been selling their tax-exempt bond mutual […]

Overheating in China

May 4, 2011

One theme I’ve been addressing in Retirement Watch and in my investment webinars is that there’s a conflict between China and the U.S., and China is being slow to resolve it. The tools to resolve the conflict are entirely in China’s hands. The conflict is the U.S. has an easy monetary policy while China needs […]

Knowing When to Diversify

May 3, 2011

“Diversification is only a surrogate, and usually a damn poor surrogate, for knowledge, control and price consciousness.” So says Martin Whitman of the Third Avenue funds. I always urge you to read Whitman’s  quarterly shareholder letters. This quarter, Whitman touches on several topics. Whitman’s funds are focused or concentrated, not diversified. He believes that he […]

El Erian on everything

May 3, 2011

Mohammed El-Erian of PIMCO was on Bloomberg television yesterday for an extended interview. He covered everything from consequences of the death of Osama Bin Laden, the Middle East unrest, unemployment, the state of the U.S. economy, and more. He disagreed with Ben Bernanke on the inflation outlook. El-Erian sdays he hopes today’s higher inflation is […]

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