There has been quite a few articles lately proclaiming the death of the Equities culture.
With PIMCO’s Gross getting full attention with his “extreme” views, below is an in depth explanation of Equities Returns.
Full report below, courtesy of Ben Inker.
The first half of 2012 is over – and the risk on/risk off trade is still alive and well.
There’s nothing like a spot of volatility to keep investors on their toes.
June was marked by a continuation of the markets’ recent obsession with events in Europe, but with a greater dose of unpredictability, both in terms of the news flow and how investors chose to respond to it. For instance, one of the best-performing asset classes was Spanish equities, which benefitted first from some bottom-fishing when that country’s government finally requested bailout assistance for the country’s troubled banks. Spain’s stocks ended the year with a bang, rallying on the final trading day of the year when word came that eurozone political leaders had reached an agreement to funnel financial support to troubled banks without adding to sovereign debt loads.
For all those that still think Spain is just going down, sorry. IBEX put in a stellar performance last month, managing squeezing many of those “smart” new shorts.
Peter Tchir has been rather spot on regarding the markets lately. Here are some weekend thoughts worth reviewing.
You can read about Europe from a lot of other sources this weekend. I maintain that when a Grexit became a real possibility, they finally looked at what it would mean and became scared of the risk. Since then there has been a change of attitude. I saw it in the Spanish bailout, and I continue to see it. You can debate all day long about what Merkel says, or what the facilities can or can’t do, but if the EU has changed their approach, and has the will, they can find a way to give this one heck of a kick down the road.
High Yield is positive for the year no matter which day you bought it
Why would retail investors switch to equities when they have found a new and underinvested asset class that yields 7%? I’ve pulled up HYG here to show that there is now not a single purchase that would have a negative total return. Even if you top-ticked the market in February, the coupon income has saved you. This is true for the mutual funds I looked at as well.