stocks

What Is Cost Basis?

What is cost basis? Cost basis is the purchase price or original value of an asset or investment. It’s used to calculate capital gains and losses for tax filings.

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Bonds Improve on Late Day Risk Aversion; Thoughts on Liquidity

Bonds Improve on Late Day Risk Aversion; Thoughts on Liquidity Bonds began the day in slightly weaker territory, but eventually turned green with help from a flight-to-safety in Europe.  A few hours later, US markets did the same thing, resulting in even better gains for Treasuries.  10s dropped under 3.40% and MBS gained more than an eighth of a point.  In other news, we’re seeing more and more confusion (and misinformation) regarding the notion of illiquidity in the bond market. Today’s video for MBS Live members discusses that in greater detail.  Econ Data / Events Jobless Claims 191k vs 197k f’cast, 192k prev Market Movement Recap 08:46 AM modestly weaker in Europe. Additional selling on corporate issuance and First Republic pre-market rally.  10yr up 6bps at 3.513.  MBS down 3 ticks (0.09). 12:11 PM Slow, steady gains in bonds with MBS outperforming 10yr Treasuries.  MBS up almost a quarter point.  10yr just hit ‘unchanged’ at 3.451. 01:38 PM Off the best levels, but still stronger on the day.  MBS up an eighth.  10yr down .2bps at 3.449. 03:45 PM Yields drop to best levels on flight-to-safety trading heading into the 3pm CME close.  Stocks fell in concert.  10s down 6+ bps at 3.387.  MBS up nearly a quarter point.

Vanguard Says Don’t Give Up on the 60/40 Portfolio

Of all the choices an investor has to make, asset allocation could be the most important. Deciding how to split up the money you invest among different asset classes requires clarity of purpose and an understanding of each category’s advantages … Continue reading →

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Bonds Manage to Hold Gains Despite Risk Recovery

Bonds Manage to Hold Gains Despite Risk Recovery Everything has been driven by the “risk-on, risk-off” movements relating to the banking sector over the past 2 weeks.  The only brief exception was on Fed day, but markets still managed to fall into a flight-to-safety pattern by the end of that day.  Another flight-to-safety showed up overnight–this time driven by Deutsche Bank.  EU bonds led US bond yields lower, but the momentum reversed course before 7am ET.  The rest of the day saw stocks and EU bonds trudge back toward or above yesterday’s levels.  US bonds managed to hold some of the gains with 3.382 emerging as a good pivot point for 10yr yields.   Econ Data / Events Durable Goods -1.0 vs 0.6 f’cast, -5.0 prev Durables, excluding aircraft/defense 0.2 vs 0.0 f’cast, last month revised to 0.3 from 0.8 Markit Services PMI 53.8 vs 50.5 f’cast, 50.6 prev Market Movement Recap 09:15 AM 10yr down 11.2bps at 3.302.  MBS up more than a quarter point on Deutsche Bank concerns.  10:00 AM Losing ground after PMI data and a correction in EU bonds.  10yr down 5.6bps at 3.359.  MBS down an eighth on the day and a quarter point from AM highs. 11:18 AM Recovering a bit.  MBS back near unchanged levels.  10yr down 6bps at 3.356. 02:50 PM MBS still near unchanged levels.  10yr now down only 4.5bps at 3.369

How Long Will $3 Million Last in Retirement?

How long $3 million will last in retirement depends on your spending habits and investment returns. While your spending habits are largely under your control, some costs such as healthcare expenses are not perfectly predictable. Likewise, while you can probably … Continue reading →

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Mortgage Rates Inch Down to Lowest Levels Since Early February

Over the course of the past two days, the average conforming 30yr fixed rate has moved down to the lowest levels since early February for most lenders.  In nuts and bolts terms, that’s a drop of more than half a percent. Yesterday accounted for a much larger portion of the improvement as lenders continued updating their offerings in response to Wednesday afternoon’s bond market movement (courtesy of the Fed).  Bonds ultimately improved today due to a flight to safety in the broader market.  In other words, investors sold riskier assets like stocks and bought safer assets like bonds.  Excess bond buying results in lower rates, all other things being equal.  Could the improvements continue?  That depends what you’re willing to sacrifice for them.  In the current case, the price of lower rates would likely be more bad news for the banking system.  While nothing catastrophic happened on that front today, the market remains a bit nervous about the prospect of more unexpected drama.