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Financial Perspectives

with Michael Dubis, CFP

10/07/13

There’s no way the government will default on its debt

I am sick of the fear-mongering by politicians, the media, and some financial talking heads around the possibility that the U.S. will default on its debt if an agreement is not reached on the debt ceiling. I’m going to keep this as simple and short as possible: There is no conceivable way the U.S. government will default on its debt this month.

Posted at 11:11 AM | Permalink | Comments: 2

09/25/13

Does the Fed control the markets?

It feels like it, doesn’t it? For a few years now, the stock market has been on a tear and bond market yields have dropped significantly (at the same time, bond values have risen). Many would argue that a large contributor to that run-up has been the Fed’s quantitative easing/bond-buying policies.

Posted at 07:42 AM | Permalink | Comments

08/05/13

The ‘Great Rotation’ is a silly, nonsensical investment trend

Have you heard about the “Great Rotation” of investor money out of bonds and into stocks? Google it and you will come up with thousands, if not millions, of hits. According to the Great Rotation theory, investors will eventually tire of (or no longer accept) the low yields in the bond markets and rotate their investments to stocks. The concept was originated by a brokerage firm. It has become a media darling. It’s very catchy and simple — perfect ingredients to inspire reaction. Brokerage firms and the media profit when concepts that are catchy lead to transactions.

Posted at 11:39 AM | Permalink | Comments: 1

06/24/13

The markets’ response to Fed news

Stock and bond markets will move really fast and usually at unexpected moments. This is happening as I write. In essentially one month, interest rates on the 10-year Treasury have increased by over 40%, from 1.7% to 2.4% (subsequently, 10-year Treasuries have fallen in value) and markets have dropped about 4%-6%+. Most other equity markets are off by even more because of their higher risk exposure or other-country risks. Very few asset classes other than cash have been stable. This fast-moving phenomenon is why I believe it’s impossible to market time.

Posted at 09:10 AM | Permalink | Comments

05/14/13

‘You can do better!’ … Compared to what?

One of my jobs is to analyze performance and solicitations that clients occasionally get from outside money managers, mutual funds, and other “advisors.” I sometimes hear the saying “you can do better” or “you can do better than what you’re currently doing.” It drives me nuts.

Posted at 07:52 AM | Permalink | Comments

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About This Blog

It is an understatement to say the world has experienced a radical shift in capital markets. There are more layers of information and opinions on the direction of the world than we've seen in decades. The internet and the media do not always make it easier, but Michael Dubis' contribution through IB blogs will help you sift through the noise and give you some perspective. You can find his company online.

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