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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
|
2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Why the Fed Can't Make Up Its Mind |
The Motley Fool - May 31, 2011 - By Dan Caplinger
For more than a year now, a huge debate has brewed about where interest rates are headed next. Yet even after all that time, the answer to the long-awaited question of when those supposedly inevitable interest rate increases will finally start to happen hasn't appeared.
In fact, officials at the Federal Reserve, which is responsible for setting short-term interest rates, seem more divided than ever. Although their recent announcements have had unanimous votes, members of the Fed have made speeches and other announcements in between meetings that suggest some serious discord among the group. That leaves investors asking a vital question: How should you invest for the uncertainty resulting from the current standoff?
What's up at the Fed
From looking at Fed announcements, you wouldn't think there was any disagreement at all. Late last month, the Fed unanimously chose to continue its policy of keeping rates low, with plans to continue doing so for an extended period. Although the Fed is apparently taking the forward step of ending its current QE2 program on schedule at the end of June, it dismissed both recent strength in the economy and higher prices as not justifying any quicker action to raise interest rates.
But that hasn't stopped dissenters from making their voices heard. Thomas Hoenig, who is the president of the Federal Reserve Bank of Kansas City and a non-voting member of the Federal Open Market Committee, said over the weekend that past experience has shown the negative consequences of keeping interest rates too low for too long. Not only does the increasingly apparent influence of rising inflation worry Hoenig, but also the potential for disruptions in the behavior of investors that extended low rates have caused.
How savers are coping
That last point should ring true with plenty of conservative investors. Even just a few years ago, savers could count on earning 3% to 5% on ultra-safe short-term investments like bank money market accounts or Treasury bills. That allowed them to earn a reasonable income on their nest eggs without worrying about taking on market risk from stocks or interest rate risk from longer-term bonds.
Now, though, the near-zero income potential of short-term investments have forced those savers to resort to higher-risk investments. On the fixed-income side, savers have had to replace Treasuries with the higher-yielding corporate bonds that SPDR Barclays High Yield Bond (NYSE: JNK ) and iShares iBoxx High Yield Corporate (NYSE: HYG ) own. Junk bonds have gotten those investors back to the 5% and higher yields that they're used to, but at the cost of owning longer-maturity bonds that carry interest rate risk as well as assuming the default risk from issuers with lower credit quality. Similarly, some have turned to municipal bond investment iShares S&P National Muni Bond (NYSE: MUB ) for better rates and tax-free treatment, but have taken on the considerable credit risk of ailing state and local governments.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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