U.S. News: Subprime Loans Are Haunting Investors and Auto Stocks

By Simon Constable

Just when you thought the economy is safe again, the ghost of subprime loans is back. This time it's haunting the auto industry and doesn't bode well for automotive stocks. In fact, the problem is beginning to hurt car companies in myriad ways, including fewer sales.

Subprime refers to riskier loans made to borrowers with a less-than-pristine credit history. The loans, you may recall, had a hand in the global financial crisis. In the years leading up to 2008, banks made many subprime loans to home buyers. The result was the banking industry's overexposure to risky loans and the painful paying of the piper that followed. When the housing market bubble popped and borrowers defaulted, banks – and ultimately taxpayers – were on the hook for the money, and the world economy became mired in a credit crisis. Read more here.

U.S. News: What Britain's Election Means for Investors

By Simon Constable

A surprising result in last week's U.K. election, which left no party with a majority in Parliament, holds possibilities for savvy investors willing to navigate a tumultuous market.

The election "takes an uncertain situation and throws it up in the air," says Jack Ablin, chief investment officer at BMO Private Bank in Chicago. Read more here.

Britain's Houses of Parliament

Photo by Mark Stuckey on Unsplash

U.S. News: Why You Should Buy Converts Now

By SIMON CONSTABLE

The time is ripe for investing in convertible bonds.

You may not have heard of them before, but these hybrid securities can help protect your wealth if interest rates rise or stock prices fall. Convertible bonds are fixed-income securities that can be converted into the stock of the company that issued the bond.

"They can make a lot of sense for investors who want to see some stock market upside but also want to receive a regular interest coupon payment," says Brad McMillan, chief investment officer for Commonwealth Financial Network. Read more here.

U.S. News: The Case for Treasury Bonds

By SIMON CONSTABLE

It's easy to dismiss owning U.S. Treasury bonds as a waste of time, but they play an important role in a portfolio.

Yields on 10-year Treasury bonds have been falling for decades. In July 1981, Treasury yields were more than 15 percent but have since dropped, paying just 2.3 percent recently. The falling yields led many to falsely predict the end of the bond market rally. Bond prices and yields move in opposite directions, so falling yields mean higher bond prices. Read more here.

WSJ: How to Invest When Some Asset Classes Look Expensive

By SIMON CONSTABLE
By some time-tested metrics based on corporate earnings, the U.S. stock market is overvalued. The S&P 500 index, Nasdaq and the Dow Jones Industrial Average all set fresh highs on Friday.
Read more here.

WSJ: What Is Thematic Investing?

By SIMON CONSTABLE

The world has changed, and through necessity so has the world of investing. That has given rise to something called thematic investing. 

“Unfortunately, a lot of investors have built up expectations of investing returns based on the returns of the past,” says Jay Jacobs, director of research at New York-based fund-management company Global X. Read more here,

U.S. News: Is the Retail Business Facing Apocalypse?

By SIMON CONSTABLE

Is there a retail apocalypse?

You could be forgiven for thinking so. Hardly a month seems to go by without a major retailer announcing some trouble. Even the iconic Macy's announced earlier this year it would slash 10,000 jobs.

Judging by recent headlines, things seem to be going from bad to worse, with both The Week and Business Insider calling the industry's troubles a "retail apocalypse" while The Atlantic used the slightly more restrained "retail meltdown of 2017."

The headlines, though, don't tell the whole story. "The media is so focused on the negative aspect," says Jeff Macke, an independent investor in San Diego. "There is a trillion dollar opportunity in retail."

Read more here.