Stocks or Bonds

Stocks or Bonds for Your Retirement Account? Stocks are riskier than bonds which is why they have a higher expected return. The right risks, taken Foolishly, can pay off in the long run. “Behold the turtle. He makes progress only when he sticks his neck out.” — James Bryant Conant, American diplomat In our Foolish Steps to Retirement, we recognize that we’re going to have to take risks to reap rewards. Market risk (the chance you will lose money) and reward (the chance that your investments will head skyward) travel…

ETF Trends in Q1 2016

3 ETF Trends in Q1 2016 (XLU, VNQ) Three trends in exchange traded funds (ETF) in Q1 2016 are a recovery in rate-sensitive funds, strength in emerging market ETFs and strong flows into precious metal ETFs. Gains in these ETFs are reversals of major trends from the previous year, when low inflation and increases in short-term interest rates combined to put downward pressure on these groups. One major development crucial to the first quarter of 2016 was the Federal Reserve’s shift to a more dovish policy in response to financial market volatility…

Don’t Panic Over Falling Inflation Expectations

Alarms are ringing over how much expected inflation has fallen in recent months. Bond markets are betting that five to 10 years from now, inflation will be roughly half the Fed’s 2% target. The University of Michigan reports on household expectations today; its last survey found long-term expectations hit an all-time low earlier this month. This has unsettled some Federal Reserve policy makers and many outside analysts, because low expectations can be self-fulfilling. It’s fueled calls for the Fed to stop raising rates, or even cut them. But the drop may be misleading: It is heavily driven by…