The Fixed Income Channel

Behind Davis Advisors’ “Wall of Mistakes”

Danton G. Goei joined Davis Advisors in 1998. He is a portfolio manager for the Davis Large Cap, Global, and International Portfolios and a member of the research team for other portfolios. In this interview, he discusses those funds and why Davis maintains a “wall of mistakes” that immortalizes its investment blunders.

Scenario Planning: Expectations for Interest Rates

An entire generation of advisors and investors has grown up observing interest rates that only go down and bond prices that only go up. But with potentially volatile interest rates, investors may experience losses in their fixed income portfolios if they don’t adapt to a variety of different scenarios. This guide takes a look at strategies to help investors pursue their financial goals amid changing interest rates.

High Yield Train Wreck

The first defaults will occur at the lowest end of the problematic market: high yield or “junk” bonds. They will play a role comparable to subprime mortgages in the last crisis. We’ll see mortgage problems as well, but I think overleveraged companies will be the core problem.

Building a Better U.S. Economy

This shouldn’t surprise anyone, but public trust in the federal government is eroding. Sixty years ago, 75 percent of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Seventy-five percent! You can’t get 75 percent of people to agree on anything now, as the recent “Laurel or Yanny” video proved.

‘Simplification Day’ for Oil & Gas MLPs: What Investors Need to Know

We believe the news is evidence of a broader shift toward simpler corporate structures in the midstream energy sector – a trend that supports our investment approach and our constructive view of the sector.

Equity-Sector Leadership Can Shift Amid Rising Interest Rates

In an environment in which interest rates have been steadily rising — the 10-year US Treasury yield has moved up almost 75 basis points since its recent low in September 2017 — one question that investors face is the potential effect of this phenomenon on equity sectors. Which sectors might be winners or losers in a rising rate environment?

The Madness of Crowding Out

Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.

Yields Look Overextended and Ready for Mean Reversion

The 10-year Treasury yield has been the topic of conversation lately among fixed-income investors. Earlier this month, the T-note closed above 3 percent for the first time since July 2011, prompting some market watchers to call time on the three-decade Treasury bull market. (Bond prices fall as yields rise, and vice versa.) For other investors, these concerns might extend into the $3.8 trillion municipal bond market.

Tackling Student Debt and College Savings Plan Myths

The cost of a college education continues to rise, and along with it, student debt. Roger Michaud, senior vice president and director of college savings for the Franklin Templeton 529 College Savings Plan, and Mike O’Brien, director, Program Marketing, Global Client Marketing, look at how mounting student debt could have a long-term impact on one’s future.

John Williams Takes the “Under” on Expected Rate Hikes

John Williams, one of the newest members of the Federal Open Market Committee, wrote an article titled “The Future Fortunes of R-star: Are They Really Rising?” where he summarized his views on real neutral interest rates.

How to Convert an Acquaintance to a Prospect without Being Awkward

How should you approach a casual acquaintance and open the dialogue about working together?

Why Trade Deficits Are Not Necessarily a Bad Thing

Today, I want to disagree with a widely-held view by the mainstream media and President Trump that trade deficits are always a bad thing. I also want to disagree with the idea that trade deficits with the US mean that our trading partners are taking advantage of us.

Communication Bloopers

Here are examples of things you do or say that create barriers to sales.

When Clients Spend Themselves into Oblivion

What do you do when one of your best clients is spending their way into oblivion?

Gundlach Defends Technical Analysis

Criticism of technical analysis ranges from bemused skepticism to claims of harebrained alchemy. Few investors as well-respected as Jeffrey Gundlach admit to using it. But yesterday, he explained why he relies on technical analysis under certain conditions.