The Banking Industry Looks Strong but Keep an Eye on Nonbank Lenders
https://youtu.be/xAmrxd9NERQ?si=-2s7iQEx768kSq-m The banking industry is looking strong, with loan default rates remaining low — a sign that banks are managing credit risk well. Consumers are holding up too, with wage growth roughly keeping pace with inflation, though after taxes real income is still lagging. Nonbank lenders are a different story. The recent bankruptcy of Tricolor […]
Why Own Fixed Income Securities
https://youtu.be/6_-yyPibvj8 People own fixed income securities for two main reasons – providing an income stream and less volatility in their investment portfolio. We currently like fixed income securities, but not in one area. Watch our video to find out why to own fixed income securities and the one area you should avoid at this time.
Maximizing Returns: How Active Investing in Bonds Triumphs Over Passive Strategies
Welcome to the elaborate world of bond investments, where strategic decisions define future returns. At the core of bond investment strategies lies the iShares Core U.S. Aggregate Bond ETF, commonly referred to as the Agg. This ETF forms the foundation of passive bond investing, mirroring the vast landscape of the US investment grade bond market. […]
Higher for Longer: Inflation & Interest Rates
https://youtu.be/WjaF6t5XxlA Inflation and interest rates will be higher for longer. Copper, oil, and wages will cause inflation pressure over the next few years, which will make it difficult for the Federal Reserve to cut interest rates. Watch this market update to learn more.
Bear Market – Where do we go from here?
https://youtu.be/aEewVQbWMvU We are officially in a bear market and the THORdex is now saying the market is fairly valued. However, the Federal Reserve has yet to make a dent in raising the unemployment rate and job openings are plentiful. This is different than the bear markets of 2000-2002 and 2008-2009. During these time periods the […]
Federal Reserve’s Impact on the Bond Market
https://youtu.be/8ibLEWWiJt8 The Federal Reserve has blown out their balance sheet to almost $9 trillion and currently own 25% of all agency mortgage securities. Watch our video to understand why this is not a time to own the “general” bond market.
Bonds – Credit Risk is getting to an Extreme!
https://youtu.be/3vadv_sQbUc THOR’s credit risk model is sending a cautionary signal. This at a time when bond spreads are historically narrow (i.e., 1999 and 2008) and covenants are non-existent. Is your bond portfolio taking too much credit risk today? Watch our market update video to learn more.
Stock and Bond Yields – Not Enough To Live On!
https://youtu.be/bapRbVp1giAThe “real” yields for both bonds and stocks are negative. The last time that both stocks and bonds generated negative real yields was back in early 70’s. Investors cannot just rely on yield to generate income. THOR understands this dilemma and believes portfolio’s need to be more dynamically managed to maintain appropriate withdrawal rates.
3 Strikes: High Yield Corporate Bonds
https://youtu.be/JgK44UF3XGM In 2020 there was a historic amount of corporate debt downgraded because of the pandemic and increased amount of issuance. Today we see 3 reasons to be cautious of high yield corporate bonds: Strike 1 – Investor protection has collapsed since 2014 and today over 85% of bonds are “covenant lite”. Strike 2 – […]
Bond Duration: Measuring Interest Rate Risk In Your Portfolio
https://youtu.be/FyodXv4xeV4 Bond duration is a good indicator of how much interest rate risk you have in your bond portfolio. In simple terms, “duration” is the mid-point at which an investor receives half the present value of their original investment back from a bond. Ten-year Treasury Bonds issued in 1980 with a yield of 15% had […]