By Gordon Pape Special to the Star Fri., Nov. 23, 2018 Interest rates are rising. When that happens, bond prices drop. It’s one of the basic rules of investing. But how is that playing out in today’s investment climate? You may be surprised. The Bank of Canada has raised interest rates three times this year, with another quarter-point move possible in December. You would normally expect that such aggressive action would significantly knock down bond prices. However, the FTSE Russell Canadian Universe Bond Index was down only 0.12 per cent year to date as of the Nov. 16 close. In other words, only a tad below break-even. Government bonds took the biggest hit, off 0.22 per cent as a group. Corporate bonds were actually ahead 0.16 per cent. Not big numbers either way. And what about stocks? To that point, the S&P/TSX Composite Index was down 6.5 per cent for 2018. Where would you have rather had your money? Mutual fund returns reflect a similar … [Read more...] about Rates are heading up. Time to buy bonds?
Vanguard california municipal bond fund
By Dawn Lim The Wall Street Journal Mon., Nov. 19, 2018 Vanguard Group is lowering the minimum amounts customers need to invest to get cheaper prices on more than three dozen of its index funds. The $5.3 trillion (U.S.) indexing giant’s move is the latest salvo in Vanguard’s push to lure investors from rivals at a time asset managers are under pressure to slash the costs of funds. Starting Monday, the firm is lowering the minimums for admiral shares—a share class that costs less than regular investor classes—to $3,000 from $10,000 for 38 index mutual funds. The funds make up the majority of Vanguard’s index funds that are available to individual investors and include some of the industry’s largest stock and bond index funds. Vanguard became the world’s second largest asset manager by launching some of the cheapest funds in the industry. That strategy has since been copied by many of its peers. Now the Malvern, Pa.,-based firm … [Read more...] about Vanguard ratchets up index-fund price battle
By Derek Horstmeyer The Wall Street Journal Sun., Nov. 4, 2018 For older investors considering which allocations to overweight and underweight in their retirement accounts, the advice most frequently given by financial advisers for years has been to favor the bonds. This was good advice once. But not any longer. No one is saying bonds shouldn’t play a big role in our investment portfolios, especially as we get older. Bonds are less subject to big price swings than stocks. They also spin off cash with their regular interest payments, and so can produce much-needed income in one’s later years. But bonds no longer hold big tax advantages when it comes to choosing the contents of an IRA or other tax-sheltered/tax-deferred account. Recent research suggests that the best type of investment to overweight in a tax-advantaged retirement account is an actively managed REIT or small-cap equity fund. This isn’t surprising given that actively managed funds tend to … [Read more...] about The case against having a bond-heavy retirement account
BOSTON: Funds run by BlackRock Inc and Vanguard Group backed all directors at gunmaker Sturm Ruger & Co Inc despite the company's rare rejection of talks with the world's top asset managers, disclosures to regulators on Thursday showed.The votes by the gunmaker's largest investors stood in contrast to support BlackRock and Vanguard gave to a measure calling on Sturm Ruger to report on the safety of its products, which passed over the board's objections at the company's annual meeting on May 9.Neither BlackRock nor Vanguard would discuss in detail their votes at the meeting. It drew attention amid a nationwide youth-led gun control movement following a mass shooting at a Florida high school in February that killed 17 people, one in a decades-long series of shootings at U.S. schools, colleges and workplaces.Sturm Ruger declined to comment on the filings by the funds with the U.S. Securities and Exchange Commission on Thursday. BlackRock holds about 18 percent of shares … [Read more...] about Limited engagement: Top funds backed gunmaker Ruger board despite no talks
Elected officials in Berkeley, California, are exploring the launch of an initial coin offering to raise funding for affordable housing. Berkeley City Council Member Ben Bartlett said the idea came from a desire to create some financial independence from the federal government. President Donald Trump has threatened to cut federal funding from sanctuary cities, and has specifically targeted Berkeley in tweets. The City of Berkeley, one of the epicenters of liberal California, is considering a turn to cryptocurrency to reduce its reliance on federal funding in the Trump administration. Berkeley would become the first city in the US to hold an initial coin offering (ICO) – a type of crowdfunding campaign that’s become popular in the past year. The city would raise funds by selling digital assets called “tokens” that are backed by municipal bonds, a type of security issued by the local … [Read more...] about A major California city is turning to cryptocurrency as a possible hedge against Trump cutting off its funding