Posts belonging to Category Market Developments



Alternative Investments are no Panacea

 

Why do investors continue to be enamored with hedge funds and other alternative investments? The press recently reported that institutional investors are expected to increase allocations to hedge funs by 300% this year, and hedge fund assets are expected to increase by 11% to $2.5 trillion, according to the 11th annual survey of institutional investors [...]

J.P. Morgan to Cut Thousands of Jobs

 

J. P. Morgan Chase has announced plans to cut 17,000 jobs over a two-year period and cut $1 billion of expenses this year.  The announcement was made at an Investor Day presentation in New York.  The bank employs nearly 260,000 people worldwide.  Over the past several years, CEO Jamie Dimon reportedly had been adamant that [...]

Merrill Lynch Settles Wage and Hour Class Actions

 

Merrill Lynch has agreed to pay $12 million to settle wage and hour class action lawsuits filed by employees seeking compensation for overtime.  The period in dispute is between 2010 and 2012.  The employees are referred to as “client associates,” whose job is to support the financial advisers by serving clients and developing new business [...]

Will More Brokers Switch Firms this Year?

 

The number of brokers switching firms is expected to be higher than average this year for a number of reasons.  Among the reasons is a proposed new rule requiring brokers to disclose signing bonuses to clients, which is viewed as very likely to be approved.  If brokers switch firms before the rule becomes effective, they [...]

Is a Stock Market Correction Imminent?

 

Individual investors who sold and fled the stock market are starting to buy stocks again as stock prices have risen significantly off their lows in March 2009.  According to contrarian philosophy, the return of panic sellers to the market is a sign of a market top and an imminent correction. If so, retail investors will [...]

Bubbles are Plentiful in the Investment Markets

 

Experts are seeing signs of bubbles in stocks, bonds and farmland.  This froth is basically the result of the Federal Reserve’s policy of credit easing – implemented primarily by its purchase of Treasuries and mortgage securities, which lowers interest rates and drives investors into riskier assets. The Fed’s primary reason for doing this is to [...]

More Investors Believe the Stock Market is Rigged

 

The sense that the stock market is rigged became the majority view of disgusted investors in 2012, according to a Yahoo Finance article, “In 2012, Many Felt the Market Was Rigged.” This view is attributable to many factors, including the complexity and lack of transparency of multiple exchanges and alternative networks and the degree to [...]

Hedge Funds – Too Much Hype, Too Little Performance

 

The financial press is increasingly critical of an investment product it glamorized in the past ? hedge funds. As a group they have underperformed unmanaged stock and balanced fund indices for the last 10 years while enriching fund managers. Yet more hedge funds continue to come on line. The question is why do they continue [...]

Municipal Bonds Plummet

 

The lowest yields in 40 years and concern over their tax-exempt status sent municipal bonds into their worst monthly decline since 2010, according to InvestmentNews (“Munis take worst pounding since Meredith Whitney”). As of December 21, municipals were on track to lose 1.9 per cent of their market value for the month. Thanks to the [...]

Are Municipal Bonds Headed for a ‘Train Wreck?’

 

CNNMoney’s well-respected senior editor-at-large, Allan Sloan, has a warning for municipal bond investors ? look out below, because even investment grade municipal bonds are mega-inflated by lighter-than-air interest rates and are sure to pop when interest rates (and tax rates) rise. Repeat: high grade munis, he says, are at risk (“Municipal bonds: A train wreck [...]

More Experts View Bonds as High Risk

 

Many experts believe that fixed income has become a high-risk asset class, more so than at any time in recent years. Demand has pushed bond prices way up and yields way down. Bond sales for 2012 are expected to break the 2009 record of $1.024 trillion. Investors’ average allocation to fixed income is 26%, double [...]

Investors’ Appetite for Risk is on the Decline

 

American investors’ confidence and risk tolerance remain low despite the stock market rebound. The 2008 global financial crisis, the dot com bubble burst before that, and a volatile stock market dominated by hedge funds and computerized trading appears to have permanently reset the risk parameters of most older investors. According to a recent study (the [...]

Recent Investment Survey Provides Interesting Revelations

 

New research confirms that investors still do not trust financial markets and regulators do not believe they are able to police them. Commenting on a survey done by State Street Center for Applied Research, Wall Street Journal columnist Jason Zweig observes that individual investors’ behavior contradicts their stated goals, and that institutional investors are plunging [...]

UBS to Shed 10,000 More Employees

 

UBS has announced a major a cost-cutting overhaul that will eliminate 10,000 jobs. The positions will be eliminated mostly from its investment banking division. UBS cited increased regulatory capital requirements and persistent problems in the global economy as reasons for the cuts. The move also follows scandals involving the investment banking division, including a $2.3 [...]

More Investment Concerns Regarding the Impending ‘Fiscal Cliff’

 

Investors and their advisers should be very cautious about purchasing and holding municipal bonds and municipal bond funds, and be mindful of the possible deleterious effects of the fiscal cliff that is rapidly approaching.