Some Bond ETFs Are Having A Good Year

With the Federal Reserve once again in an “interest rate-cutting” mood, some bond investors are making fantastic returns in 2019. Several bond ETFs are beating the S&P 500 year-to-date, despite the popular index increasing by more than 20% thus far in 2019.

Perhaps you are wondering how boring old bonds could be beating top growth and technology stocks in 2019?

Well, the answer is simple; when interest rates fall, long term bonds that have higher “nearly guaranteed” yields become more valuable. If current 10-year Treasury yields are around 1.75%, but you own an older 10-year Treasury bond that is yielding say 3.0%, investors who are looking for safe, reliable yields, will be willing to pay a nice premium for your older 10-year Treasury bond.

Funds such as the Vanguard Long-Term Corporate Bond ETF (VCLT), the Vanguard Extended Duration Treasury ETF (EDV), and the iShares 20+ Year Treasury Bond ETF (TLT) are all increasing in value as interest rates decline. Year to date, these three ETFs are up 21.37%, 25.01%, and 18.36% respectively, all without using any sort of leverage.

The three bond ETFs mentioned above are all increasing in value while current interest rates fall. However, these three funds and many others like them will do the opposite when interest rates begin to climb higher. But, since the Federal Reserve and other central banks around the world are in rate-cutting mode, investors can reasonably expect rates to stay at their depressed states for some time, if not go even lower. Continue reading "Some Bond ETFs Are Having A Good Year"

These Options Are Way Overpriced Heading Into Brexit

Options in the macro markets like gold, bonds, and currencies are priced for a disaster heading into "Brexit" Here's a way to play the pumped up volatility in the options market using Fibonacci and Elliott Wave Analysis.

Learn more about here.

Plan Your Trade, and Trade Your Plan,
Todd Gordon

Why Bond ETF's May Not Be Your Best Choice

Matt Thalman - Contributor - ETFs

One of the greatest things about the world of finance is we have so many different options when it comes to investing. We have stocks, bonds, mutual funds, ETF's, real estate, commodities, metals, currency, the list goes on. But, with all of these different options, it is difficult to navigate through what we should be investing in and what we should leave alone. Each of the different options investors have at their disposal has their own pros and cons.

With that in mind, let's take a look at Bond Exchange Traded Fund's to help determine if they are the best option for you.

Issues with Bond ETF's

First what is a bond ETF? Similar to other ETF's it is a highly liquid asset which investors can trade in and out of daily, hourly, or even by the minute. These funds hold a variety of different "bond's", based on the restrictions the fund manager has set for the ETF. For example the Pimco Total Return Active ETF (BOND) states its own restrictions as following; Continue reading "Why Bond ETF's May Not Be Your Best Choice"