MM’s overall market outlook & bond yields
Hi James, In today’s report I gained the impression that while you are expecting the market to rally in the short term you expect the music to stop at some stage this year. You indicated that you are ….. looking to sell into a tech rally, sell the Nasdaq into strength, and lighten up on finances and perhaps resources. This would seem to imply that you will be rather cashed up at some point. I would be keen to know what you anticipate doing with all that cash short of fleeing the country and setting up residence in the Bahamas. Also you commented on Bond Yields having exploded to the upside and are likely to come off. I think you were implying its not a good time to buy bonds. With higher bond yields and lower bond prices the price of the bonds are likely to go up. I know you could hardly live high on the hog on the yield from bonds at present but would that not be a good time to buy bonds given the higher yield and the potential for capital gain from the bonds? Presumably if economies go into recession the price of bonds will go higher. Do you consider there will be a better time in future to buy bonds? There is a notion that one should have a weighting of bonds vs stocks in one’s portfolio with the ratio of bonds to stocks increasing with proximity to retirement. I know you are not meant to give financial advice as such but can I ask whether you think that still applies or is it best to avoid bonds altogether these days? Hope that last question(s) isn’t too convoluted for you. Regards, Peter
