本文发表在 rolia.net 枫下论坛Time to lock in low mortgage rates
Apr. 18, 2004. 01:00 AM
BILL CARRIGAN
The mutual fund industry has always been an easy target for ridicule by financial writers.
The folks at AIC Limited tell you to Buy, Hold, and Prosper. They claim the key to success is the long-term ownership of "outstanding business." In their 2003 Annual Report the chairman admits that sometimes the shares of a company should be sold because of "a deterioration in the quality of management or a significant adverse change in the demand for its products or services."
Let's assume now that we should Buy, Sell, and Prosper.
The folks at Dynamic Mutual Funds Ltd. are not quite as focused as AIC. They claim that, "As a leading investment company, Dynamic offers a diversity of choice, with each investment option giving you access to a different asset class, geographic region and investment approach."
Their investment options include focused investing, value investing, power investing and growth investing. Almost something for everybody. I think some new offerings such as power-growth investing and focused-value investing could also be an easy sell.
Both companies offer Canadian, American, global and world funds, just to make sure you get lots of diversification.
I think any experienced investment adviser would tell you that you can get diversification, exposure to the global economy, value stocks and growth stocks with the purchase of just one security — namely the TSX listed S&P/TSX60 iUnit or XIU.
On the topic of diversification, a reasonable person would select a blend of soft assets such as stocks and bonds, and hard assets such as a residential home, art, stamps and antique automobiles. Add in your investment in personal skills and you're diversified.
On the topic of the residential home, years ago I had a conversation with the wealthiest man in my neighbourhood. I asked him what his mansion was worth and if he would ever cash in on its value.
"It's worth what I paid for it, and I will stay there as long as I can afford it."
I had just got a quick lesson on two keys to home ownership. Lifestyle and affordability.
On the topic of affordability we have to look at the cost of money (interest rates), which is related to the bond market, and in order to understand the current interest-rate picture we need a little background on the North American bond market.
The "buy-of-a-generation" in the bond market occurred in mid-1981 with the interest rate spike that was created in part by the great commodity price spike and the fear of lenders to lend money — at any price.
It is from that point that commodity prices collapsed, and the great 20-year secular bull market in bonds began. The early stage from 1982 to 1987 was volatile, ending in with the 1987 stock market crash. The stock and bond markets remained under pressure through to the 1990 crisis in Iraq and the first Gulf War.
In the early 1990s, the bond market rose to historical highs and the stock market responded, with all major North American indices hitting all-time highs in early 2000.
Mortgage rates collapsed to 40-year lows. Five-year terms were "out" and the variable rate mortgage was "in." The variable-rate mortgage is now broadly embraced by most experts and homeowners. Keep in mind that most of us finally cave in to embrace a common strategy closer to the end of a bull cycle, in this case the bond market.
Our chart this week shows the daily closes of three interest rate bellwethers. In this case I selected the Morgan Stanley High Yield Inc., which is a closed-end fund that invests primarily in below-investment-grade debt securities (junk bonds). I also selected two listed exchange traded funds, the TSX listed iREIT or Capped REIT Index Fund and the AMEX listed iShares Dow Jones Real Estate fund.
All of these diverse securities are interest-sensitive in that any hint of higher rates will cause investors to sell.
Note the slight time lag in the selling of these issues with the Morgan Stanley junk bond fund peaking in January, 2004. Note now the March top in the REIT fund and the recent collapse of the Dow real estate product.
The message is clear: lock in those low mortgage rates.
--------------------------------------------------------------------------------
Bill Carrigan is an independent stock-market analyst. His Getting Technical column appears Sunday. He can be reached at http://www.gettingtechnical.com on the Internet.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Apr. 18, 2004. 01:00 AM
BILL CARRIGAN
The mutual fund industry has always been an easy target for ridicule by financial writers.
The folks at AIC Limited tell you to Buy, Hold, and Prosper. They claim the key to success is the long-term ownership of "outstanding business." In their 2003 Annual Report the chairman admits that sometimes the shares of a company should be sold because of "a deterioration in the quality of management or a significant adverse change in the demand for its products or services."
Let's assume now that we should Buy, Sell, and Prosper.
The folks at Dynamic Mutual Funds Ltd. are not quite as focused as AIC. They claim that, "As a leading investment company, Dynamic offers a diversity of choice, with each investment option giving you access to a different asset class, geographic region and investment approach."
Their investment options include focused investing, value investing, power investing and growth investing. Almost something for everybody. I think some new offerings such as power-growth investing and focused-value investing could also be an easy sell.
Both companies offer Canadian, American, global and world funds, just to make sure you get lots of diversification.
I think any experienced investment adviser would tell you that you can get diversification, exposure to the global economy, value stocks and growth stocks with the purchase of just one security — namely the TSX listed S&P/TSX60 iUnit or XIU.
On the topic of diversification, a reasonable person would select a blend of soft assets such as stocks and bonds, and hard assets such as a residential home, art, stamps and antique automobiles. Add in your investment in personal skills and you're diversified.
On the topic of the residential home, years ago I had a conversation with the wealthiest man in my neighbourhood. I asked him what his mansion was worth and if he would ever cash in on its value.
"It's worth what I paid for it, and I will stay there as long as I can afford it."
I had just got a quick lesson on two keys to home ownership. Lifestyle and affordability.
On the topic of affordability we have to look at the cost of money (interest rates), which is related to the bond market, and in order to understand the current interest-rate picture we need a little background on the North American bond market.
The "buy-of-a-generation" in the bond market occurred in mid-1981 with the interest rate spike that was created in part by the great commodity price spike and the fear of lenders to lend money — at any price.
It is from that point that commodity prices collapsed, and the great 20-year secular bull market in bonds began. The early stage from 1982 to 1987 was volatile, ending in with the 1987 stock market crash. The stock and bond markets remained under pressure through to the 1990 crisis in Iraq and the first Gulf War.
In the early 1990s, the bond market rose to historical highs and the stock market responded, with all major North American indices hitting all-time highs in early 2000.
Mortgage rates collapsed to 40-year lows. Five-year terms were "out" and the variable rate mortgage was "in." The variable-rate mortgage is now broadly embraced by most experts and homeowners. Keep in mind that most of us finally cave in to embrace a common strategy closer to the end of a bull cycle, in this case the bond market.
Our chart this week shows the daily closes of three interest rate bellwethers. In this case I selected the Morgan Stanley High Yield Inc., which is a closed-end fund that invests primarily in below-investment-grade debt securities (junk bonds). I also selected two listed exchange traded funds, the TSX listed iREIT or Capped REIT Index Fund and the AMEX listed iShares Dow Jones Real Estate fund.
All of these diverse securities are interest-sensitive in that any hint of higher rates will cause investors to sell.
Note the slight time lag in the selling of these issues with the Morgan Stanley junk bond fund peaking in January, 2004. Note now the March top in the REIT fund and the recent collapse of the Dow real estate product.
The message is clear: lock in those low mortgage rates.
--------------------------------------------------------------------------------
Bill Carrigan is an independent stock-market analyst. His Getting Technical column appears Sunday. He can be reached at http://www.gettingtechnical.com on the Internet.更多精彩文章及讨论，请光临枫下论坛 rolia.net