Salient to Investors: The traditional move to fixed-income-heavy asset allocation in retirement planning poses risks and limitations, especially given expanding life expectancy. First, today’s unconventional monetary policy raises the inflation risk. Second, long-duration government bonds and high-grade debt carry the risk of capital loss. A 10-year Treasury and similar debt could decline more
READ MORE... →Salient to Investors: David Kelly at J.P. Morgan Funds recommends a balanced portfolio because most investors are very conservative, bonds are expensive, and stocks are cheap. Kelly said: Valuations are extreme, which only makes sense if you believe we are on the brink of a financial disaster. All we have to do is
READ MORE... →Salient to Investors: Nigel Gault and Paul Edelstein at IHS Global Insight expects payroll growth won’t be enough to reduce the unemployment rate. Doug Roberts at Channel Capital Research said most of the rally is being driven by QE. Wasif Latif at USAA Investments said Spain will need to accept the offer from the ECB. bad
READ MORE... →Salient to Investors: Ethan Harris at Bank of America Merrill Lynch said central bank actions have clearly been a major factor in the market rally. Larry Kantor at Barclays said a modestly growing economy with depressed cyclically sensitive sectors is a relatively stable and safe environment, and when combined with a central bank
READ MORE... →Salient to Investors: Bloomberg calculates that Australian stocks of explorers of shale rock in the U.S. and Canada sell for a median of 11 times reserves versus 14.3 times for equivalent North American companies. RBS Morgans say this valuation gap may lure acquirers. Ben Griffiths at Eley Griffiths Group expects many more transactions involving Australian players
READ MORE... →Salient to Investors: Padhraic Garvey at ING Bank said yields will stay low as growth remains weak. Carl Lantz at Credit Suisse said 10-yr yields will fall to a record 1.35 percent by Dec. 31. Bloomberg survey of economists predict the 10-yr yield will rise to 1.80 percent by Dec. 31. Bank
READ MORE... →Salient to Investors: Joyce Chang at JPMorgan Chase said QE3 puts emerging-market corporate and sovereign debt in a sweet spot by reducing bond supply and prompting investors to seek higher-yielding debt – modest borrowing by emerging-market governments and companies has avoided a supply glut. Chang favors commodity-related currencies including the Russian ruble, Mexican peso and
READ MORE... →Salient to Investors: Investors will soon be more concerned about missing out on the rising markets than preparing for the next leg of the bear market. Gold will make a serious run at $2,000. Short-selling is a great strategy but risks mandatory buy-ins. Read the full article at http://seekingalpha.com/article/890301-how-to-prepare-for-the-bear?source=intbrokers_regular
READ MORE... →Salient to Investors: Equity markets will trend higher even if economic activity continues slow for a prolonged period. Any market correction over 10% is a buying opportunity. Asset markets are critical in the current environment and markets will not crash or collapse for the foreseeable future. The banking system has been flooded with enough
READ MORE... →Salient to Investors: Expect the market to consolidate before the next QE-driven euphoric market advance. The market does not necessarily react immediately to liquidity-driven catalysts. Stocks traded higher for nine days after Lehman collapsed before the sell off began. Stocks initially trade lower once they receive QE from the Fed. A slowing global economy,
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