Published Sun, 11 Aug 2019 07:49:47 -0400 on Seeking Alpha
Ok, one more bond post. I thought I was done with this little series of bond TAA posts, but based on some feedback and some very astute questions from my subscribers, I decided I needed to do one more.
So, here is the basic question I received, "Aren't you concerned about inflation, fiat currency debasement, etc.? What about gold and commodities?" Usually, my answer to gold and commodities is NO! I don't like dead assets in a portfolio. By dead assets, I mean assets that have zero yield, whether that be in terms of cash flow or coupon payments. It is a personal bias, yes, but backed up with data. In general, over time they don't add anything to a diversified TAA portfolio. In fact they reduce returns and increase drawdowns. Other assets in the portfolio on the risk-on side (real estate and emerging markets for example) usually do as well or better in an inflationary environment.
But what got me thinking this time was that the question came from the risk-off perspective and that it was framed differently. What if bonds are now also a zero-yielding asset? Or, in a world of negative rates, zero-yield assets are the higher-yield option? Yeah, OK. That is a different world and I need to reconsider my original premise. The question for me now is what about potentially adding gold to risk-off types of TAA strategies, specifically TAA bond strategies.
Note: I looked at adding commodities to the risk-off side as well. Like on the risk-on side, they make things worse, not better, in... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ISHARES JPMORGAN USD EMERGING MARKETS BOND FUND||113.92||0.0||0.00||6.17||5.43|
|ISHARES IBOXX $ HIGH YIELD CORPORATE BOND FUND||87.32||0.0||0.00||4.60||5.27|
|SPDR GOLD TRUST||141.32||0.0||0.00||0.00||0.00|
Older articles featuring Ishares Jpmorgan Usd Emerging Markets Bond Fund (EMB):VWOB: Value In EM Bonds With 5.3% Yield Despite Near-Term Pressures
DoubleLine Income Solutions: 8.6% Yield With A Curious Rally To Start 2020
EMLC: Yield At A Reasonable Price
The 3 Yields: A Passive Allocation Income Investors Can Use To (Substantially) Reduce Risk And Maximize Yield
As Negative‑Yielding Bonds Set New Records, Flexible Investing May Offer Benefits
High Yield Shines Among EM Corporate Bonds
Despite Steepening Yield Curve, Investors Embrace Bond Funds In April
A Fully Inverted Yield Curve, And Consequently A Recession, Are Coming To Your Doorstep Soon
High Yield Energy Debt: The Writing Is On The Wall/Oil
Cash, Bonds, Rates And Yields Are All Still Sending Nervous Signals