Cash and Short-Term Funds

Investors have been married to their money market funds for the better part of the last two years.

Here we are, another calendar quarter down with one more to go in 2024, and investors have yet to see a “hard landing” emerge.

Volatile interest rates have spurred investment capital into motion. Clients often ask where they should allocate on the yield curve.

The FOMC lowered the Fed Funds rate by 50 basis points at their September meeting. This was the first cut in over four years and the start of what is expected to be a multi-year easing cycle.

The tendency to blindly follow these rules has led investors towards prematurely de-risking and over-estimating the likelihood of recession.

Fed easing cycles and lowered target interest rates impact various economic sectors, such as mortgages, consumer credit and cash investments.

One of most dangerous habits of a speculative crowd is the tendency to use unconditional averages and unconditional probabilities regardless of how extreme market conditions have become. This is like stepping into a house with two rooms, one with the temperature at 0 degrees and one at 140 degrees, and expecting a temperature of 70 either way.

Turbulent market conditions can make anyone nervous. Here's what investors should know about dealing with them.

Cash strategies may seem safe, but inflation can bite into returns. Instead, investors can try to outperform inflation with equities.

Everything I’ve learned and experienced in 50+ years of watching the economy tells me not to expect a soft landing. But maybe that’s because I’ve never actually seen one.

As the Fed shifts its stance, investors must now weigh the broader economic implications.

After the Fed's 50-basis-point rate cut, big banks kick off earnings season amid fears that lower rates could hurt the net-interest income that propelled growth the last two years.

We are currently in the “everything market.” It doesn’t matter what you have probably invested in; it is currently increasing in value. However, it isn’t likely for the reasons you think. A recent Marketwatch interview with the always bullish Jim Paulson got his reasoning for the rally.

We expect bond yields to trend gradually lower—but it may be a bumpy ride. These seven strategies may help investors take advantage.

We believe municipal bonds currently offer a compelling balance of risk and reward for investors in higher tax brackets.

While agency mortgage-backed securities offer compelling valuations, not every mortgage is created equally.

The last two years brought challenges for investors across all walks of life, but particularly for retirees.

Fixed income strategy and opportunities have remained relatively unchanged over the past few months. However, the much-talked-about monetary policy change has commenced.

On September 18, the Federal Reserve cut the Federal funds rate, as expected, announcing at the same time that the Fed will continue to reduce its balance sheet. In my view, both of these decisions were appropriate. The Fed reduced short-term rates by 50 basis points, which was consistent with economic conditions that remain near the threshold of recession.

Since mid-2022, when the Federal Reserve was in the midst of its aggressive hiking cycle, investors piled over $1.6 trillion into money market funds, which include Treasury bills.

As GMO celebrates its 30th anniversary managing emerging debt this year, we offer our comprehensive guide to emerging debt markets. Given the tumultuous recent events – a global pandemic, defaults, repricing of interest rates, relentless strength in the U.S. dollar – we’ll focus on the Why as a starting point. Then we’ll dive into the proliferating How, covering strategies and vehicles.

With the decision on Wednesday to lower interest rates (for the first time since March of 2020) by a substantial 50 basis points (bps), rather than the 25 bps cut we typically see at the beginning of an easing cycle, the Fed is showing confidence that the disinflation trend will continue.

The yield curve measures the difference between short-term, intermediate-term, and long-term Treasury yields.

Regardless of which administration takes power after an election, a balanced portfolio has made strong gains in the years immediately after.

On the back of recent cooling in economic growth, an uptick in unemployment, and moderating inflation, the Federal Reserve (Fed) looks set to begin its rate-cutting cycle at its September meeting.

We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”

We often write about the opportunity for fixed income investors to lock in relatively attractive long-term rates. And we would argue that investment consultants and financial advisors have no more important charge than to convince their clients to take advantage of this while they still can.

When we’re viewing markets, it’s not surprising sentiment shifts quickly if we don’t instantly see the anticipated results. Market pundits quickly point fingers and determine the Fed, economists, and participants are wrong. Reactions can be powerful in number and sway momentum for stocks and/or bonds.

As tax season draws nearer, advisors and investors increasingly look to their portfolio to optimize exposures for taxation purposes.

Elevated budget deficits imply growing US Treasury issuance. Receding demand from central banks could leave more price-sensitive buyers to pick up the slack. Who are the buyers of US government debt, and how is the market responding? In part two of our series, let’s examine Treasury market supply and demand.

The KraneShares Sustainable Ultra Short Duration Index ETF (KCSH) offers low risk income investing with notable yields and diversification.

The flexibility offered through individual bonds translates well for tailoring individual financial goals and needs.

Hastily, investors have turned their worry about inflation into worry about a recession. The catalyst was Friday’s unexpectedly disappointing unemployment number.

The members of the Bank of England’s Monetary Policy Committee (MPC) are probably not intimately familiar with Taylor Swift’s back catalogue. If they were, Swift’s hit “Cruel Summer” may have been ringing in their ears when cutting rates today for the first time since March 2020.

Today’s passive index investing requires active choices, as customization and innovations in index funds have resulted in new considerations for investors and the potential for greater control.

Jeff and Ron discuss the state of the economy, inflation, the bond and stock markets, and they outline, in broad terms, their current investments.

We are approaching a turning point in policy decisions as the FOMC attempts to walk the fine line of hitting their inflation targets while maintaining a healthy labor market.

It's been another strong first half for the U.S. ETF industry, with overall flows set to challenge or surpass historic records.

The momentum we've seen in U.S. equity markets over the past year continued in the second quarter of 2024. With large technology stocks leading the wave, the S&P 500 index has risen 23% in the 12 months ended June 30.

There are many advantages and risks associated with any investment. Whether you are buying a stock, a house, a business, or a bond, each investment has unique characteristics that allow an investor to gain from particular investment features with varying risks.

The stock market is not a balloon that gets bigger when money “flows into” it. It doesn’t get smaller because money “flows out” of it. Holding the number of shares constant, the stock market gets bigger if investors pay a higher price for those shares. Period.

Relatively high yields mean investors who have been focusing on short-term securities wouldn't need to sacrifice much yield if they chose MBS to help limit their reinvestment risk.

A Structured Protection ETF like CPRJ can offer robust tax benefits for investors seeking to move cash or get exposure to small-cap equities.

Portfolio Manager Daniel Siluk believes subsiding inflation and declining interest rates underpin a compelling argument for investors to reallocate funds away from money market strategies toward shorter-dated bonds.

In the post-pandemic fiscal landscape, government debt trajectories may be volatile, but appear broadly sustainable.

With high yields and compelling opportunities, we think the muni market looks exceptionally attractive today.

Investors continue to pile into bond funds, looking to add yield now before the Federal Reserve starts instituting rate cuts.

Earnings season is just around the corner. It could prove critical to justifying the record rally we’ve seen thus far in 2024.

The expert and you are in a car and the expert is driving. After awhile, you notice that the expert is driving the car by looking through the rearview mirror. Concerned you ask him why he’s not looking ahead as he drives.

We’re borrowing from the upcoming Paris Summer Olympics for our quarterly theme – with a twist. Instead of using the most popular events (like gymnastics, swimming, and track & field) to express our views, we’ll go beyond the spotlight.

Don’t miss out. Prepare to take advantage of opportunities in the second half.

How to help position your portfolio in anticipation of an economic downturn.

Market expectations for Federal Reserve rate cuts in 2024 have shifted dramatically, from six cuts expected at the start of the year, to barely one or two at this writing. Here’s why we think the US economy’s resilience and the year-to-date increase in yields may prolong an attractive opportunity in fixed income.

I may as well just say it. Based on the present combination of extreme valuations, unfavorable and deteriorating market internals, and a rare preponderance of warning syndromes in weekly and now daily data, my impression is that the speculative market advance since 2009 ended last week.

It’s certainly a challenging time to be an investor. It's probably why a call for caution and diversification seems to be getting louder.