Retirees Reaching for Yield in Fixed Income Products Need to Think Twice

Shah Gilani | Jun 05, 2020

The free market isn’t free anymore, even though a lot of retired and soon-to-be retired folks think it is.

The truth is nothing in the capital markets moves freely anymore, especially interest rates.

Now, frighteningly, because America has morphed into a quasi-command economy where the Federal Reserve dictates economic policy, retirees don’t understand how dangerous most bonds and fixed income products have become in the new normal “socialized capital markets regime.”.

Here’s what’s being manipulated, why it’s bad, how it’s impacting fixed income investments, and what retirees and soon to be retired investors should be doing instead of putting themselves at great risk.

Flying High With the Airlines When They Take Off Again

Shah Gilani | Jun 03, 2020

Airline stocks have been essentially grounded, for very good and obvious reasons.

But, like the rest of the stock market, as the airlines see the economy opening up, as the TSA tells us there are more travelers every day, as investors rotate into cyclical sectors and beaten down stocks, tarmac tied airline stocks should benefit, big time.

That said, timing the rise of airline stocks and choosing individual names isn’t the easiest game in town.

Fortunately, there’s a simple way to play the sector in one fell swoop.

The U.S. Global Jets ETF (JETS) is well worth looking at, if not taking a long-term position in.

This isn’t a new ETF that was put together so investors could suddenly jump into the beaten down sector. The JETS ETF has been around since 2015. But saying it’s been overlooked would be like calling the Grand Canyon a ditch.

No-one paid much attention to JETS, until it became a highflier recently.

Up until early March the fund had only about $33 million under management, that is tiny for an ETF.

As an investment or trading vehicle it was too small for me or my subscribers to bother with, primarily because of its thin daily volume and spreads that were too large to make getting in or out tenable.

That’s all changed.

More Headlines

  • Runaway Trains, Planes, and Automobiles

    Like a runaway train the market kept barreling ahead last week, make that last month, make that the last two months, actually make that since the March 23, 2020 lows.

    The S&P 500 ended last week up 3%. It ‘s up a whopping 17.79% in the last two months. And is up a mind-bending 36.06% from its March lows.

    So far so good. But, there ‘s a problem. No one knows where the train tracks lead.

    Markets could have gotten off track on Friday. The Dow was down about 300 points as nervous investors pared positions ahead of President Trump ‘s “conference.” But, instead of slamming China and ratcheting up rhetoric, or tossing trade war and tariff threats, the President just pointed a finger and repeated his displeasure with the Mainland ‘s heavy handedness over Hong Kong ‘s future.

    And back up went stocks.

    What pre-conference selling revealed is how jittery investors are, but there ‘s a lot out there that matters

  • Retail Investors Have Been Beating Hedge Funds: Is That Dangerous?

    Just about everything in our lives is different, no thanks to the novel coronavirus.

    One glaring difference is how retail investors have plunged into the stock market since COVID-19 slammed markets and shutdown the country.

    While that’s different enough, what’s vastly different is retail investors, instead of typically selling at the bottom of a plunge, started buying early, have been buyers all the way up, and according to Goldman Sachs research, with their whacky list of favorite stocks have beaten hedge funds and their top holdings.

    Since a ZeroHedge article earlier this week pointed out, “After years of trying and failing to sucker in retail investors into the stock market to allow a long-overdue distribution from top shareholders to mom and pop bagholders, as has been the trend heading into every prior recession…” maybe it’s time to ask, with stocks racing higher heading into another recession, is the new retail trend dangerous?

    The answer is “no,” it’s not dangerous, at least not yet. But, “yet” could be any day now.

    Here’s what you need to know is going on and what it means to your Total Wealth.