Take Advantage of Shift From Bonds to Stocks

For several years, investors have anticipated a “great rotation” from bonds into equities, and for several years, they were dead wrong. In fact, even as equities were quietly rising for the past years, both domestic and international money has continued to surge into bonds. At long last, that is beginning to reverse, which demands a reconsideration of strategies that seemingly have worked so well and so easily for so long. As long as bond prices were rising, pouring money into assets that had a certain return looked like a slam dunk. No longer.

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Junk Bonds Are Back!

Interest rates have been falling once again. The yield on the 10-year U.S. Treasury, which acts as a global benchmark of sorts, dipped as low as 2.44 percent last week, which is well below where rates began the year—and lower than at most points throughout the 20th century and into the first decade of the 21st.* At no point between 1961 and 2011 were rates as low as they are now, and for most of that time, the yield on the 10-year was above 6 percent.

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Canceling the debt ceiling apocalypse

Before we begin, let it be said that the looming possibility of the U.S.'s default on its own debt is a not-insignificant issue. Let it also be said that the U.S. government may be unwilling to pay interest on its multi-trillion dollar publicly-held debt as of mid-October, and that this carries substantial risks. And, finally, let it be said that this is something we should most definitely avoid.

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A Reminder to All Investors: Bonds Are Not Safe

The old stock market cliché "sell in May, and go away" had so far proved untrue this year. Instead, it is the bond market -- so often perceived as steady, low risk and dependable -- that has bitten investors. In fact, June was one of the worst months for bonds in many years. The declines were steep enough to serve as an acute reminder that nothing, and I do mean nothing, in the financial world is without risk.

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COLUMN - Stormy markets, smooth seas

You could be forgiven for missing the latest installment of market panic over the past ten days. It came and went like a summer thunderstorm, passing over the global financial landscape quickly and violently. But unlike meteorological events that inflict actual harm, the sharp gyrations of financial markets have increasingly less relationship to real-world economies and exist in their own never-never land of self-fulfilling prophecies and conventional wisdom.

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Should You Put Your Savings in a Chinese Bank Account?

In the middle of last month, the Bank of China quietly announced a startling new bank account available to America citizens. At one of three Bank of China branches in the United States–two in New York and one in Los Angeles–an American can walk in, open an account and convert their grubby dollars into the currency of the hottest, and arguably the most important, economy in the world, the Chinese renminbi.

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Why Beijing Wants a Strong Dollar

Twenty years ago, in the wake of the suppression of the student movement that had taken over Tiananmen Square, it seemed as if China's brief opening to the world had come to an end. In fact, 1989 marked the beginning of China's supercharged path to economic reform. The results have been tremendous: China is now the second pillar of the global economy and is increasingly vital given the vulnerability of the United States.

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