Tag - rising interest rates

REITs | Bricks in the Wall of Worry? | Sheaff Brock

Real Estate Investment Trust Valuations—Bricks in the Wall of Worry?

The “Wall of Worry,” an informal expression used in financial jargon since the 1950s, refers to a market uptrend that occurs when there is significant uncertainly about stock price sustainability. But what about REITS? Are these stock/real estate hybrids bricks in the “Wall” as well? “Long before investors fell in love with Facebook and Amazon.com or even the hot stocks of past generations such as utilities and railroads, real estate inspired dreams of wealth,” writes John Coumarianos. “Some financial advisers and pundits helped [...]

Sheaff Brock Preferred Stock portfolio | question marks about rising interest rates

Preferred Stock—Expect the Question; Consider the Answer

The unrelenting search for reliable investment income is an important theme in retired clients’ investment plans, and preferred securities certainly share the limelight. What’s more, given the current buzz about the new tax law, it’s hard to ignore the fact that certain features of the law can favor investing in preferred stock, potentially increasing the demand for high-income investment vehicles. The question: As you’re discussing this very topic at the tennis club, expect the question: Interest rates are on the rise. By [...]

Interest Rate Signs Increasing in Size | Managing Interest Rate Risk for Preferred Stock Income | Sheaff Brock Investment Advisors

Managing Interest Rate Risk in a Preferred Stock Portfolio

If I invest in preferred stock for the income just when interest rates are rising, won’t I be setting myself up for losing money? “Not necessarily,” contends JR Humphreys CFA, CAIA, Senior Portfolio Manager at Sheaff Brock Investment Advisors. Humphreys explains that, “increasing interest rates is usually the result of an improving economy that could lead to credit rating upgrades for the preferred equity, resulting in a higher price.” Many investors have the perception that preferred securities are highly interest-rate [...]

Sheaff Brock Investment Advisors | Indianapolis | Preferred Stock Performance | Asset Class

Will Higher Interest Rates Huff and Puff Your House Down?

Ever since (think back approximately a year-and-a-half) rates began their slow upward movement, income investors have experienced a certain degree of worry about the “big bad wolf” blowing down their carefully constructed investment “abodes.” Thankfully, as Sheaff Brock senior portfolio manager JR Humphreys, CFA, CAIA explains, if you’ve “built” for the longer term (planning a longer holding period), there may be little reason for concern. In fact, Humphreys pointed out in an October interview with our SheaffBriefs editor, since December [...]

Sheaff Brock | rising interest rates | Dave Gilreath Sheaff Brock | income-bearing investment strategies | REITs | Preferred Stocks

Do Rising Interest Rates Put Investors Behind the Curve? It Ain’t Necessarily So.

Rates are rising. They will likely keep rising; accept that and adjust, is the message astute investors should be receiving. Rates are rising. They will likely keep rising; accept that and adjust, is the message astute investors should be receiving. When we compare the rates on U.S. Treasury bonds now to those of one year ago, Sheaff Brock Managing Director Dave Gilreath observes, at every maturity, rates are higher now by 60 to 95 basis points. Actually, he adds, U.S. 10-year [...]

Sheaff Brock REITs portfolio investment performance rising interest rates

REITs in a Rising Interest Rate Environment

Concerned that, as soon as interest rates start moving in an upward direction, any real estate-related investments you have will be slated to take a “hit”? ’Tain’t necessarily so, according to Alfred Galli in Seeking Alpha. He concludes that “on an historical basis, there is no strong correlation between rates and prices (of real estate).” Michael Orzano of S&P Dow Jones Indices admits there’s growing concern today about how REITs will perform “when interest rates ultimately rise from their [...]

Sheaff Brock Mid-Cap 10 One-Two Punch

The One-Two Punch Potential of Mid-Cap Stocks

Market capitalization? Just a fancy name for a straightforward concept, says Investopedia.com. The market value of a company’s outstanding shares is calculated by taking the stock price and multiplying it by the total number of shares outstanding. (It’s a misconception that the higher the stock price, the larger the company, Investopedia goes on to explain; the true value is affected by the number of outstanding shares each company has in addition to its price.) Used to be, stocks fell into [...]

Boring yawn about bonds boring investment style | Sheaff Brock

The Potential Benefits of Bonds’ Boring Investment Style

When Oppenheimer Managing Director Leo Dierckman asserts that bonds should most definitely continue to be included in investment portfolios—even when interest rates are expected to rise—he means what he says. Dierckman believes that bonds serve as the backbone of both individual and institutional portfolios, and help offset the risks of equity and alternative investment holdings. While the portfolio manager admits that interest rates tend to rise when the economy is improving, which can render lower-paying existing bonds less attractive, those [...]

baseball analogy is bonds may deliver singles or doubles and not home runs | Sheaff Brock

Fixed Income is the Portfolio’s “Boring Backbone”

Should bonds continue to be included in investment portfolios even when interest rates are expected to rise? Most definitely, Oppenheimer Asset Management’s Managing Director Leo Dierckman told our SheaffBriefs editor. In fact, Dierckman went on to say, bonds serve as the backbone of both individual and institutional portfolios, offsetting the risks of equity and alternative investment holdings, and reducing volatility. Using an analogy from baseball, Dierckman cautions investors that bonds can reasonably be expected to deliver “singles” and “doubles,” rather [...]