The Income Channel

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.

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Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended Tuesday at 3.03% and the 30-year bond closed at 3.21%. The 2-10 yield spread is now at 0.54%.

Income Investing for a Rising Rate Environment

Advisors face two problems in today’s market: how to find yield in a low interest rate environment and how to protect against rising rates. Join experts from XA Investments and Octagon Credit Investors and learn ways to position clients’ portfolios to take advantage of rising rates. We’ll discuss the benefits of floating-rate loans and collateralized loan obligations (CLOs) and how best to access them.

Participants will learn about:

  • Rising Rates and Floating-Rate Credit—Floating-rate credit will fare better than traditional fixed income when interest rates rise.
  • Accessing Institutional Alternative Credit Strategies—Learn what to look for in these alternative investment opportunities and the importance of an experienced manager.
  • CLO Debt and Equity Investments—See the portfolio benefits of CLOs by understanding their historical performance, current yields and correlations to traditional asset classes.

Dangerous Yield Curves Ahead?

There’s new rumblings about an inverting yield curve ahead. Is it time to panic? Time to stick our heads in the sand? Or time to think sensibly?

Second Quarter Hedge-Fund Strategy Outlook: K2 Advisors

In their second-quarter (Q2) 2018 outlook, K2 Advisors’ Research and Portfolio Construction teams share their views on why investors should not fear the return of market volatility—and why it may unlock opportunities for active managers. We believe offering these insights will help investors better understand the rationale for owning retail mutual funds that invest in hedge strategies.

Strategic Income Outlook

Written in 1606, Shakespeare’s words are just as relevant today. Tweets and eye-catching headlines dominate the news cycle and many conversations, but when you parse them for impactful content, you realize it’s mostly just white noise.

How Washington Will Spend Your Taxes in 2018

Today we’re going to look at how Washington spends our tax dollars. Specifically, we’ll look at a new report which shows how the federal government spends the income tax paid by the average family – and how they spend even more than what’s collected to create massive budget deficits year after year after year.

Mr. Market Grasps the Esoteric

We are reminded of Ben Graham’s Mr. Market analogy. In his analogy, the stock market is like having a business partner (Mr. Market) who offers to either buy or sell his half of the business to you, based on how the business is doing.

April 2018 Economic Outlook

Conditions we are seeing today are more normal than recent years, when investors grew accustomed to record low interest rates, a near-absence of inflation and the subdued volatility. We expect coordinated global economic expansion will continue through 2018, although improvements in some economic fundamentals may have peaked.

Two Ways Tax Reform Is Impacting Muni Bonds

The Tax Cuts and Jobs Act of 2017 included a number of changes that have directly impacted the $3.7 trillion municipal bond market.

Consumer Confidence Increased Moderately in April

The latest Conference Board Consumer Confidence Index was released this morning based on data collected through April 12. The headline number of 128.7 was an increase from the final reading of 127.0 for March, a downward revision from 127.7. Today's number was above the Investing.com consensus of 126.0.

Yes. It's a Bubble. So What?

With sky-high valuations in the US stock market, and what we believe is a tech bubble that has dangerous implications for other areas of the market, we suggest four actions investors can take now to avoid the inevitable bursting of the bubble, and which will likely benefit their portfolios’ long-term performance potential.

Don’t Fear the Yield Curve Reaper

The yield curve has flattened significantly recently and has elicited headlines of impending doom, heightened recession risk and investor consternation…is the worry overdone?

Home Price Surge Continues in February, Led by Western States

With today's release of the February S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.83% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.3% for the last two-plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.

Global Trade and the Unsustainability of Federal Debt

While it may appear the post-Bretton Woods covenant was a win-win pact, there is a massive cost accruing to everyone involved. The U.S. is mired in economic stagnation due to overwhelming debt burdens and a reliance on record-low-interest rates to further spur debt-driven consumption.