11:00 PM
the hand that starves
Unknown
fixed-income , investment , qe3 , stocks
Investors are starving for yield. With the Fed's QE3 program going and shifting the curve to riskier fixed income assets, yields are being driven down. Investors are soaking up bonds. With this money printing mentality we see there is no more risk-free assets. Investors are dumping their money into bonds and getting a better yield than what money market and savings accounts are paying.
There, however, is a pitch for buying good quality stocks. Macro-economic factors need to be weighed more carefully. Equities are always competing for market share with fixed-income assets. These are unprecedented times. The Fed's artificially low interest rates make fixed-income investment a guaranteed loser. When QE3 was announced, I had the feeling that investors were being fed some good tidings for investing in Treasuries. But now what I heard was too good to be true.
There, however, is a pitch for buying good quality stocks. Macro-economic factors need to be weighed more carefully. Equities are always competing for market share with fixed-income assets. These are unprecedented times. The Fed's artificially low interest rates make fixed-income investment a guaranteed loser. When QE3 was announced, I had the feeling that investors were being fed some good tidings for investing in Treasuries. But now what I heard was too good to be true.