Investors continue to listen for clues from the Federal Reserve (“Fed”) and are making adjustments to their portfolios to brace themselves for an inevitable environment of rising interest rates. Whether the Fed actually increases rates later this year, in 2014 or by the middle of 2015 is somewhat irrelevant as market perception of interest rates has already changed and affected bond prices and their associated yields. Reductions in the Fed’s monthly bond purchase program (which could start as soon as later this year but is more likely to start early in 2014) will also impact bond prices and yields. As result, we would expect the rotational shift out of fixed income funds and into equity and alternative asset class funds to continue.Read more
Monthly Archives: October 2013
Government Shutdown a Convenient Excuse for Market Pullback?
While it is true that there has not been a shutdown of the federal government in over 17 years, the current partial shutdown of the federal government is the 18th such shutdown since 1976. According to a recent “Investment Insights” article from Ashvin Chhabra of Merrill Lynch, the market impact, in the short term, of a U.S. government shutdown - which has been the defined result of a failure of Congress to pass a budget since 1981 - has been relatively insignificant and perhaps slightly positive for equity investors.Read more