April 22, 2016
“The Fed is now hostage to the markets,” Scott Minerd warned Consuelo Mack as they discussed market challenges and opportunities on a recent edition of PBS' WealthTrack. “The problem is that as central banks around the world keep searching for new ways to stimulate the economy, it’s creating imbalances, so we’re slowly seeing asset classes get inflated.”
For investors, this dynamic creates an unusual conundrum: Where to find assets that represent value given the heightened risk inherent in a global economy awash in manipulated liquidity. In the following video series, including highlights from the interview, Minerd shares insights on how careful security selection and a disciplined approach to investing can help steer investors through challenging market conditions.
This material is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. This material contains opinions of the speaker but not necessarily those of Guggenheim Partners or its subsidiaries. The speaker's opinions are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information.
The market value of fixed income securities will change in response to interest rate changes and market conditions among other things. In general, bond prices rise when interest rates fall and vice versa. High yield securities present more liquidity and credit risk than investment grade bonds and may be subject to greater volatility. Investments in asset-backed securities, floating rate senior secured syndicated bank loans, and other floating rate securities involve special types of risks, including credit risk, interest rate risk, liquidity risk and prepayment risk. Some asset-backed securities, including mortgage-backed securities, may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices very volatile.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Guggenheim Partners, LLC. ©2016, Guggenheim Partners, LLC.
Shortening duration, maintaining an investment-grade portfolio, and generating attractive yields do not have to be competing investment objectives for core fixed-income investors.
After several quarters of low volatility, tight spreads, and abundant liquidity, financial conditions are shifting.
New developments in fiscal policy, the labor market, and the neutral interest rate suggest that the expansion could extend into the latter half of our recession range.
Global CIO Scott Minerd and Head of Macroeconomic and Investment Research Brian Smedley provide context and commentary to complement our recent publication, “Forecasting the Next Recession.”
In his market outlook, Global CIO Scott Minerd discusses the challenges of managing in a market melt up and highlights several charts from his recent piece, “10 Macro Themes to Watch in 2018.”
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