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☆ Buy these 12 stocks to profit from higher-than-expected price growth, according to an inflation fund manager who beat 96% of his competitors last year
▼ + stars: | 2023-02-16 | by ( James Faris | ) www.businessinsider.com time to read: +4 min

Top fund manager Simon Lack shared 12 top stocks to buy while inflation remains hot. The news confirmed what Simon Lack, a 37-year market veteran who runs a leading inflation fund, has long suspected: that price growth will remain an issue for investors throughout 2023 — and possibly beyond. If high inflation is the new normal, the Fed will struggle to achieve its goal of stabilizing prices, Lack said — at least not without causing a recession. His Rational Inflation Growth Fund (IGOAX) finished in the top 4% of its category in 2022 after beating its index by 14 percentage points, according to Morningstar. By contrast, his fund goes on offense by owning stocks in sectors that benefit from high prices.

☆ Investors show 'no inflation fear' as they snap up bonds, equities and sell cash - BofA
▼ + stars: | 2023-02-03 | by ( ) www.reuters.com time to read: +2 min

Equity funds got a $16 billion injection while bonds saw inflows of $7.8 billion, BofA said citing EPFR data, as investors showed conviction in both asset classes. In another sign of investors' confidence that global inflation may have peaked, cash funds saw $300 million in outflows, while gold funds logged outflows of $1.3 billion. Investors bought $7.3 billion of investment grade bonds and shed $1.6 billion of Treasury Inflation-Protected Securities - the 23rd week of outflows from the inflation-sensitive bonds. Tech names wrapped up their tenth consecutive week of outflows, although it was the smallest outflow in the last ten weeks. It has clocked up its biggest three-month surge since August 2020, driven by strong emerging market flows and strong stock market breadth, BofA said.

☆ Fed's Jerome Powell 'didn't fight back' against the stock market with his confident stance on inflation, says 'Bond King' Jeffrey Gundlach
▼ + stars: | 2023-02-02 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

DoubleLine CEO Jeffrey Gundlach said Fed Chair Jerome Powell didn't fight back against the stock market in his Wednesday speech. Powell radiated an air of confidence with his encouraging comments about inflation – and it resonated with investors. The US central bank hiked interest rates by 25 basis points on Wednesday as it pushes ahead with its fight against inflation. And he obviously did not fight back against market pricing," Gundlach said in a CNBC interview. That has proved successful in cooling inflation, with latest reading coming in at 6.5% - the lowest in over a year.

☆ Bond king Jeffrey Gundlach says he expects one more Fed rate hike
▼ + stars: | 2023-02-01 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

DoubleLine Capital CEO Jeffrey Gundlach said he sees one additional rate hike from the Federal Reserve before the central bank ends its tightening cycle. The Fed on Wednesday raised its benchmark interest rate by a quarter percentage point, taking its target range to 4.5%-4.75%, the highest since October 2007. The so-called bond king said Fed Chairman Jerome Powell had a "clarifying" statement at the press conference Wednesday, saying the real yields are positive across the curve. In Powell's press conference, the Fed chief said the central bank could conduct a few more rate hikes to bring inflation down to its target. Asked if Gundlach sees the Fed cutting rates this year, he said it's a coin flip, depending on the incoming inflation data.

☆ Vanguard's global head of portfolio construction explains why the 60/40 portfolio still offers investors the best chance of long-term success even after a dismal year — and lays out the key investment
▼ + stars: | 2023-01-12 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +5 min

Despite abysmal returns in 2022 there's a reason the 60/40 portfolio is a classic, says Vanguard. Long hailed as the cornerstone investing strategy, the 60/40 portfolio swiftly fell out of favor with investors after its returns were annihilated last year. But as equity valuations collapsed in 2022 so too did the 60/40 strategy, with an illustrative portfolio plunging 12% from the beginning of the year to December. In 2023, he predicts that the equity market returns between 5% and 6% — not anywhere near the dizzying gains of 2021, but far from last year's collapse. Furthermore, last year's massive correction may actually spell a brighter future for the 60/40 portfolio over the longer term.

☆ Inflation, recession and earnings among factors to drive U.S. stocks in 2023
▼ + stars: | 2022-12-28 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +4 min

The S&P 500 (.SPX) is down nearly 20% year-to-date with only a few trading days left in 2022, on pace for its biggest calendar-year drop since 2008. S&P 500 timeline in 2022Inflation, and the Fed's degree of aggressiveness in trying to contain it, will likely remain a critical factor driving equity performance as 2023 gets under way. Recessions tend to hit stocks hard, with the S&P 500 falling an average of 29% during recessions since World War Two, according to Truist Advisory Services. Investors are also concerned that corporate earnings estimates may not have fully factored in a potential slowdown, leaving more downside for stocks. Consensus analyst estimates project S&P 500 earnings to rise 4.4% in 2023, according to Refinitiv IBES.

☆ Here are the 7 investments the top-ranked inflation fund on Morningstar used to hedge against higher prices this year — and how the portfolio will change as inflation peaks in 2023
▼ + stars: | 2022-12-21 | by ( James Faris | ) www.businessinsider.com time to read: +4 min

The AXS Astoria Inflation Sensitive ETF is the top-ranked inflation fund of 2022. Greg Bassuk of AXS Investments shared how his firm invests with inflation high. It's hard to imagine a better first year than the one the AXS Astoria Inflation Sensitive ETF (PPI) just had. But Greg Bassuk, CEO of AXS Investments, is confident that his firm's fund can continue to provide solid returns as inflation stays higher than normal — even if the rate starts to slide. That means that the AXS Astoria Inflation Sensitive ETF will stick with its seven-part portfolio of TIPS, precious metals, agricultural products, and stocks in the energy, financials, industrials, and materials as inflation stays higher than normal in 2023.

☆ Inflation backdrop may soon increase appetite for this roughed-up bond play
▼ + stars: | 2022-12-11 | by ( Noah Sheidlower | ) www.cnbc.com time to read: +1 min

The appetite for Treasury inflation-protected securities ETFs, otherwise known as TIPS, may soon increase. TIPS ETFs are indexed to inflation, so their principal value is adjusted up when inflation rises. Despite major inflows in 2020, TIPS ETFs have been seeing meaningful outflows this year. Investors might have made tactical allocations towards TIPS ETFs and maybe they're pulling that back a little bit." TIPS ETF , which is down 16% so far this year.

☆ I-Bonds Aren’t the Only Way to Fight Inflation
▼ + stars: | 2022-12-02 | by ( Jason Zweig | ) www.wsj.com time to read: 1 min

If you’ve been thinking that this year’s miserable returns on stocks and bonds have put a safe retirement out of reach, think again. Thanks to the recent rout in bond prices, Treasury inflation-protected securities, or TIPS, have turned into a cheap form of insurance for the first time in more than a decade. Buying and holding them in your retirement portfolio can help assure you of a lifelong stream of income that won’t be devoured by the rising cost of living.

☆ BlackRock unit tells investors it's time for a new portfolio playbook
▼ + stars: | 2022-12-02 | by ( Weizhen Tan | ) www.cnbc.com time to read: +4 min

Work your cash; buy bonds Chaudhuri said it was time to rethink the role of bonds, as a higher-rate environment sees fixed income yields rise. BlackRock also said investors can earn income in the "comparative safety" of cash-like instruments through ultra-short duration securities. Reallocate away from growth stocks Growth stocks, such as Big Tech, were an investor favorite in an era of low rates. But this year, tech stocks have been among the worst-performing sectors . Live with inflation Inflation is set to stick around, given the continued strength coming from services and shelter, according to BlackRock.

In a surprise move, the Canadian government said earlier this month that it had decided to cease issuance of real return bonds (RRBs), citing low demand. That makes them an expensive form of financing for the government, but cost should not be the only consideration, investors say. The median allocation by defined benefit pension plans, a major category, to RRBs was 5.2% in 2021, data covering members of the Pension Investment Association of Canada (PIAC) shows. U.S. Treasury Inflation-Protected Securities (TIPS) could act as a proxy but are not an exact hedge against Canadian inflation. Breakeven rates are the difference between yields on nominal and real return bonds.

The Producer Price Index measures inflation at the firm level, showing the change in prices paid for the supplies, materials and services that businesses use, and for the final goods that retailers resell. Prices for final goods less volatile commodities and shipping costs rose 0.2% in October, continuing a slow pace for those "core" items. The model shows the Fed rate now rising only to 4.75%-5.00% in March, whereas a week ago it showed the Fed rate likely exceeding 5% by then. The breakeven-inflation rate on the 5-year Treasury Inflation Protected Security slid to the lowest in a month at 2.38%. Shepherdson has been focused on the producer price index as more important than usual because of market distortions driven by the pandemic, and said that a drop in the index's margin components would influence the direction of consumer prices going forward.

☆ Conquer inflation and rake in income by following this investing playbook, says the mind behind a top-performing $4 billion fund
▼ + stars: | 2022-11-07 | by ( James Faris | ) www.businessinsider.com time to read: +8 min

A peaceful early expansion environment with growth, low inflation, and falling rates starts to sour in the early overheating stage, when red-hot growth and low rates spark high inflation. How to invest in a low inflation economic cycleEarly expansion: Expansion, low inflation, falling ratesWhat works: Stocks broadly outperform, followed by income stocks and real estate investment trusts (REITs). How to invest in a high inflation economic cycleEarly expansion: Expansion, low inflation, falling ratesWhat works: Stocks broadly work best, followed by income stocks and REITs. Late overheating: Expansion, high inflation, rising ratesWhat works: Income stocks, commodities, and stocks tied to real assets outperform with growth, inflation, and rates high. Early stagflation: Contraction, high inflation, rising ratesWhat works: TIPS outperform as growth weakens and inflation stays high while income stocks do fine with inflation high.

Nov 4 (Reuters) - Even as global central banks rapidly tightened financial conditions this year, U.S. households, banks and businesses have so far been able to adapt, Federal Reserve Vice Chair Lael Brainard said as the Fed released its semiannual report on financial stability. More than half of those participating in the survey cited market liquidity and stress as a "salient risk," an issue not mentioned at all in the Fed's May financial stability report. TREASURY MARKET CONCERNS REVISITEDThe report noted deteriorating liquidity in the Treasury market, but said that overall it had functioned smoothly over the last few months. Liquidity conditions were particularly poor for older vintages of bonds - so-called "off the run" securities - and for Treasury Inflation Protected Securities, the report found. The Inter-Agency Working Group on Treasury Market Surveillance - comprising officials from the Fed Board, Treasury, New York Fed, Securities and Exchange Commission and Commodity Futures Trading Commission - is expected to provide an update on its progress toward enhancing the resilience of the Treasury market, the Fed said, though it did not provide a timeline for that.

☆ What rising interest rates mean for your credit, loans, savings and more
▼ + stars: | 2022-11-02 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +11 min

“Interest rates have increased at the fastest pace in 40 years,” said Greg McBride, chief financial analyst at Bankrate.com. They’re offering far higher rates – with some topping 3% currently – and have been increasing them as benchmark rates go higher. At the most recent auction in October, for instance, the 5-year TIPS had an interest rate of 1.625%. Home loans: Lock in fixed rates nowMortgage rates have been rising over the past year, jumping more than three percentage points. That said, “don’t jump into a large purchase that isn’t right for you just because interest rates might go up.

☆ Stocks and bonds are struggling. Give these strategies a shot instead, say Goldman and others
▼ + stars: | 2022-10-27 | by ( Weizhen Tan | ) www.cnbc.com time to read: +4 min

Both stocks and bonds have struggled this year, leaving investors with few alternatives. Stocks and bonds usually move in opposite directions, but that hasn't been the case this year. Trend-following strategy Adopting the so-called trend-following strategy this year would pay off for investors, according to Goldman and Wells Fargo in recent notes. Portfolio diversification can, and often should, include more than stocks and bonds," said Hazlitt Gill, retail investment research senior manager. Alternative investments UBS in an Oct. 21 note said investors can use structured investments to "tilt the odds favorably."

☆ Sell stocks in a bear market rally and look to this alternative, JPMorgan strategist says
▼ + stars: | 2022-10-25 | by ( Ganesh Rao | ) www.cnbc.com time to read: +3 min

But it has also seen multiple weeks where stocks have risen by more than 5% despite slower economic growth expectations. Such bear market rallies, according to Madison Faller, global investment strategist at JPMorgan Private Bank, were well suited for investors to sell stocks ahead of a more significant market fall. Last week, Bank of America also advised clients not to trust the recent market rally as its research pointed toward further declines in the stock market. iShares 0-5 Year TIPS Bond ETF: It has exposure to short-term U.S. Treasury Inflation-Protected Securities (TIPS). iShares 1-5 Year Investment Grade Corporate Bond ETF: It has exposure to U.S. corporate bonds with maturities between one to five years.

☆ Yields are popping. Here's how you can jump on the 'short-lived' opportunity, according to analysts
▼ + stars: | 2022-10-21 | by ( Weizhen Tan | ) www.cnbc.com time to read: +3 min

Yields popped again on Wednesday , with the 10-year Treasury surging to its highest since July 2008 to 4.136. "For investors, the significant increase in short-term yields has important implications and has provided short-term opportunities that we have not seen in over two decades," said Brian Rehling, head of global fixed income strategy. "Unfortunately, the nature of short-term maturities implies these opportunities may be relatively short-lived." iShares 0-5 Year TIPS Bond ETF: It has exposure to short-term U.S. Treasury Inflation-Protected Securities (TIPS). "Short-term maturities with maturities in 6- to 12-months anticipate Fed rate moves."

read moreThe yield on the benchmark 10-year Treasury hit 4.338% earlier, the highest since November 2007. The two-year U.S. Treasury yield , which typically reflects interest rate expectations, surged to 4.639%, the highest since August 2007. We'll continue to see more calls for a slowdown (in Fed policy) as we feel more and more pain in risk markets," he added. The gap between yields on two- and 10-year Treasury notes , was at -27.5 basis points, that's the steepest since mid-September. The 10-year TIPS breakeven rate was last at 2.525%, reflecting the average inflation the market has priced in for the next decade.

☆ The urgent search for the perfect inflation hedge
▼ + stars: | 2022-10-20 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

But when inflation takes off, stocks and bonds become positively correlated, rising and falling together. The failure of bonds and stocks to deliver protection when inflation spikes has forced investors to seek other hedges. “Each attempted inflation hedge has its particular attractions, risks, and shortcomings,” wrote the journalist Henry Hazlitt in 1978. Hazlitt wrote that the only reliable inflation hedge is to end inflation. If the Fed loses its battle against rising prices, more people will come to appreciate the insurance they provide.

☆ Goldman says stay defensive and overweight cash
▼ + stars: | 2022-10-19 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +3 min

Investors should be defensively positioned in their portfolios and holding cash on the sidelines through the end of the year, according to Goldman Sachs. The firm is specifically overweight cash and commodities, neutral on credit and bonds and underweight equities for the next few months. Not near the market bottom The view comes as global monetary policy continues to tighten in response to persistently high inflation. 60/40 drawdown, has deepened," wrote Mueller-Glissmann, adding that growth stocks have also deteriorated further amid high inflation. "We are looking for peaks in inflation, hawkishness, recession risk, risk premia and investor bearishness."

☆ Anthony Scaramucci says the wild reversal in stocks was the start of an upswing as the bear market ends and short-siders give up
▼ + stars: | 2022-10-14 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

Thursday's wild stock reversal wasn't a bear market rally and could be the start of a new upswing, Anthony Scaramucci told CNBC. I think there was full-blown capitulation on the short side yesterday and lots of institutional buying." "We are, in my opinion, coming to the end of this bear market," Scaramucci told CNBC on Friday. "This could've been a bear market rally, but I don't think so. Scaramucci also pointed to other encouraging market signals, including the TIPS 10-year breakeven rate that's now around 2.20%.

☆ Ray Dalio says buy forward the fundamental things you'll need, and shares 3 additional tips that can help investors navigate the current economic environment.
▼ + stars: | 2022-10-13 | by ( Laila Maidan | ) www.businessinsider.com time to read: +4 min

Ray Dalio says we will be searching for a true store hold of wealth for the next 10 years. On Tuesday, Bridgewater Associates founder Ray Dalio took the stage during the Greenwich Economic Forum to discuss the state of the global economy. Central to his discussion was the belief that the Federal Reserve will need to navigate between inflation and a weak economy going forward. But the magnitude of the current economic crisis is not something we're used to, he noted. What is the true store hold of wealth will be the question of our time, Dalio said.

☆ How to make inflation-protected bonds work in your portfolio as interest rates rise
▼ + stars: | 2022-10-12 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

It's been a tough year for bonds, including Treasury inflation-protected securities, or TIPS, an inflation-linked asset. Despite recent losses, TIPS offer portfolio diversification amid market uncertainty, experts say. However, bond values and market interest rates move in opposite directions, making TIPS values drop as the Federal Reserve has hiked rates. However, TIPS have outperformed the S&P 500 Index , which is down nearly 24% over the same period. TIPS — particularly TIPS funds with shorter average maturities — have offered a cushion amid double-digit losses for the stock and bond markets, he said.

☆ Factbox: What are index-linked bonds and why is the Bank of England is buying them?
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +3 min

REUTERS/Phil Noble/File PhotoLONDON, Oct 11 (Reuters) - The Bank of England said on Tuesday it would buy index-linked government debt as part of its emergency programme to try and quell turmoil in the debt market. Following is a summary of what index-linked bonds are and why the BoE is buying them. The recent surge in inflation globally has increased demand for index-linked bonds by investors, but their sensitivity to rising interest rates means many have fallen in value this year. Britain's stock of index-linked debt stood at around 558 billion pounds ($617.54 billion) on Tuesday, making up about a quarter of the government's debt portfolio, a bigger share than in many other rich economies. The BoE said it would buy up to 5 billion pounds of index-linked bonds a day, the same as its maximum for normal bonds.

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