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The unusual combination of challenges currently facing financial markets prompts investors to search for historic parallels. We find that today’s monetary and fiscal landscape looks a lot like that of Europe and the United Kingdom in the late 19th century. At that time, Europe had no effective monetary or fiscal policy with which it might
Today’s low corporate default rate combined with attractive credit spreads and equity valuations provide an attractive climate for convertible securities, according to Putnam’s fundamental research.
Heading into 2012, 79% of financial advisors said volatility would be the biggest challenge facing investors this year. Through the first five months of the year, Europe’s sovereign debt and recession woes, China’s economic slowdown, and decelerating jobs growth in the United States have contributed to market uncertainty and volatility. Find out how advisors are
As indicated by China’s surprise interest-rate cut, global markets offer a variety of macroeconomic conditions and opportunities for active bond investors.
Short-term income securities have attracted interest in recent months from investors seeking opportunities in a moderately growing U.S. economy, but concerned about risk spreading from Europe’s banking sector.
A modest pace of economic recovery has helped to keep the corporate default rate below historical averages and provides favorable conditions for high-yield bonds. Lower-rated bonds may offer higher yields in return for more risk.
There are two main issues at stake in the European debt markets. The first is a short-term liquidity issue: Will these economically troubled European nations have the capital to make the next interest payments on their debts? The answer, for the time being, appears to be yes: Greece, after receiving massive funding infusions, has been
While investors may express commitment to a long-term view, all too often volatility can have a negative impact on behavior and turn potential gains into losses. This common response to uncertainty is demonstrated clearly in DALBAR’s 2012 Quantitative Analysis of Investor Behavior. In the study, DALBAR found that while the Standard & Poor’s 500 Index
Around the world central bank interest-rate policies have diverged to address different challenges, including the eurozone debt crisis, but efforts in the United States, Europe, and Japan to hold short-term rates low could cause movement in long-term interest rates.