Emerging Market Bond Quotes

. . . the bond bubble, the tech bubble, the stock bubble, the emerging markets bubble, the housing bubble. . . One by one they had all burst, and their bursting showed that they had been temporary solutions to long-term problems, maybe evasions of those problems, distractions. With so many bubbles-so many people chasing ephemera, all at the same time-it was clear that things were fundamentally not working.

Investment Owner’s Contract I, _____________ ___________________, hereby state that I am an investor who is seeking to accumulate wealth for many years into the future. I know that there will be many times when I will be tempted to invest in stocks or bonds because they have gone (or “are going”) up in price, and other times when I will be tempted to sell my investments because they have gone (or “are going”) down. I hereby declare my refusal to let a herd of strangers make my financial decisions for me. I further make a solemn commitment never to invest because the stock market has gone up, and never to sell because it has gone down. Instead, I will invest $______.00 per month, every month, through an automatic investment plan or “dollar-cost averaging program,” into the following mutual fund(s) or diversified portfolio(s): _________________________________, _________________________________, _________________________________. I will also invest additional amounts whenever I can afford to spare the cash (and can afford to lose it in the short run). I hereby declare that I will hold each of these investments continually through at least the following date (which must be a minimum of 10 years after the date of this contact): _________________ _____, 20__. The only exceptions allowed under the terms of this contract are a sudden, pressing need for cash, like a health-care emergency or the loss of my job, or a planned expenditure like a housing down payment or a tuition bill. I am, by signing below, stating my intention not only to abide by the terms of this contract, but to re-read this document whenever I am tempted to sell any of my investments. This contract is valid only when signed by at least one witness, and must be kept in a safe place that is easily accessible for future reference.

From an asset-allocation perspective, when we talk about diversification, we're talking about investing in multiple asset classes. There are six that I think are really important and they are US stocks, US Treasury bonds, US Treasure inflation-protected securities [TIPS], foreign developed equities, foreign emerging-market equities and real estate investment trusts [REITS]. p473

Exciting news,” she said. “Today we’re going to study three different types of chemical bonds: ionic, covalent, and hydrogen. Why learn about bonds? Because when you do you will grasp the very foundation of life. Plus, your cakes will rise.” From homes all over Southern California, women pulled out paper and pencils. “Ionic is the ‘opposites attract’ chemical bond,” Elizabeth explained as she emerged from behind the counter and began to sketch on an easel. “For instance, let’s say you wrote your PhD thesis on free market economics, but your husband rotates tires for a living. You love each other, but he’s probably not interested in hearing about the invisible hand. And who can blame him, because you know the invisible hand is libertarian garbage.” She looked out at the audience as various people scribbled notes, several of which read “Invisible hand: libertarian garbage.” “The point is, you and your husband are completely different and yet you still have a strong connection. That’s fine. It’s also ionic.” She paused, lifting the sheet of paper over the top of the easel to reveal a fresh page of newsprint.

THE GLOBE | Unlocking the Wealth in Rural Markets Mamta Kapur, Sanjay Dawar, and Vineet R. Ahuja | 151 words In India and other large emerging economies, rural markets hold great promise for boosting corporate earnings. Companies that sell in the countryside, however, face poor infrastructure, widely dispersed customers, and other challenges. To better understand the obstacles and how to overcome them, the authors—researchers with Accenture—conducted extensive surveys and interviews with Indian business leaders in multiple industries. Their three-year study revealed several successful strategies for increasing revenues and profits in rural markets: Start with a good distribution plan. The most effective approaches are multipronged—for example, adding extra layers to existing networks and engaging local partners to create new ones. Mine data to identify prospective customers. Combining site visits, market surveys, and GIS mapping can help companies discover new buyers. Forge tight bonds with channel partners. It pays to spend time and money helping distributors and retailers improve their operations. Create durable ties with customers. Companies can build loyalty by addressing customers’ welfare and winning the trust of community leaders.

Ionic is the ‘opposites attract’ chemical bond,” Elizabeth explained as she emerged from behind the counter and began to sketch on an easel. “For instance, let’s say you wrote your PhD thesis on free market economics, but your husband rotates tires for a living. You love each other, but he’s probably not interested in hearing about the invisible hand. And who can blame him, because you know the invisible hand is libertarian garbage.” She looked out at the audience as various people scribbled notes, several of which read “Invisible hand: libertarian garbage.” “The point is, you and your husband are completely different and yet you still have a strong connection. That’s fine. It’s also ionic.” She paused, lifting the sheet of paper over the top of the easel to reveal a fresh page of newsprint. “Or perhaps your marriage is more of a covalent bond,” she said, sketching a new structural formula. “And if so, lucky you, because that means you both have strengths that, when combined, create something even better. For example, when hydrogen and oxygen combine, what do we get? Water—or H2O as it’s more commonly known. In many respects, the covalent bond is not unlike a party—one that’s made better thanks to the pie you made and the wine he brought. Unless you don’t like parties—I don’t—in which case you could also think of the covalent bond as a small European country, say Switzerland. Alps, she quickly wrote on the easel, + a Strong Economy = Everybody Wants to Live There. In a living room in La Jolla, California, three children fought over a toy dump truck, its broken axle lying directly adjacent to a skyscraper of ironing that threatened to topple a small woman, her hair in curlers, a small pad of paper in her hands. Switzerland, she wrote. Move. “That brings us to the third bond,” Elizabeth said, pointing at another set of molecules, “the hydrogen bond—the most fragile, delicate bond of all. I call this the ‘love at first sight’ bond because both parties are drawn to each other based solely on visual information: you like his smile, he likes your hair. But then you talk and discover he’s a closet Nazi and thinks women complain too much. Poof. Just like that the delicate bond is broken. That’s the hydrogen bond for you, ladies—a chemical reminder that if things seem too good to be true, they probably are.” She walked

What does this mean in practical terms? Let’s keep things simple, ignore private equity and commercial real estate, and focus just on the broad stock and bond market. You might buy three funds: an index fund offering exposure to the entire U.S. stock market, an index fund that will give you exposure to both developed foreign stock markets and emerging stock markets, and an index fund that owns the broad U.S. bond market. Suppose we were aiming to build a classic balanced portfolio, with 60 percent in stocks and 40 percent in bonds. Here are some possible investment mixes using index funds offered by major financial firms:     40 percent Fidelity Spartan Total Market Index Fund, 20 percent Fidelity Spartan Global ex U.S. Index Fund and 40 percent Fidelity Spartan U.S. Bond Index Fund. You can purchase these mutual funds directly from Fidelity Investments (Fidelity.com).     40 percent Vanguard Total Stock Market Index Fund, 20 percent Vanguard FTSE All-World ex-US Index Fund and 40 percent Vanguard Total Bond Market Index Fund. You can buy these mutual funds directly from Vanguard Group (Vanguard.com).     40 percent Vanguard Total Stock Market ETF, 20 percent Vanguard FTSE All-World ex-US ETF and 40 percent Vanguard Total Bond Market ETF. You can purchase these ETFs, or exchange-traded funds, through a discount or full-service brokerage firm. You can learn more about each of the funds at Vanguard.com.     40 percent iShares Core S&P Total U.S. Stock Market ETF, 20 percent iShares Core MSCI Total International Stock ETF and 40 percent iShares Core U.S. Aggregate Bond ETF. You can buy these ETFs through a brokerage account and find fund details at iShares.com.     40 percent SPDR Russell 3000 ETF, 20 percent SPDR MSCI ACWI ex-US ETF and 40 percent SPDR Barclays Aggregate Bond ETF. You can invest in these ETFs through a brokerage account and learn more at SPDRs.com.     40 percent Schwab Total Stock Market Index Fund, 20 percent Schwab International Index Fund and 40 percent Schwab Total Bond Market Fund. You can buy these mutual funds directly from Charles Schwab (Schwab.com). The good news: Schwab’s funds have a minimum initial investment of just $100. The bad news: Unlike the other foreign stock funds listed here, Schwab’s international index fund focuses solely on developed foreign markets. Those who want exposure to emerging markets might take a fifth of the money allocated to the international fund—equal to 4 percent of the entire portfolio—and invest it in an emerging markets stock index fund. One option: Schwab has an ETF that focuses on emerging markets.

According to BIS data, professionally managed funds increased their stake in emerging market equity and bonds from $900 billion to $1.4 trillion between 2008 and 2014.11 Set against global totals running into the tens of trillions, those were not huge numbers. But they were comparable to the stock of toxic subprime assets, which had caused such havoc in 2007–2008, and to the debts of Greece, Spain and Ireland, which had destabilized the eurozone in 2010–2012. After subprime and after eurozone sovereign debt, were emerging markets to be the next volume in the “trilogy” of debt crises?12

To reiterate, in the upwave, debt is increased and financial wealth and obligations rise relative to tangible wealth to the point that these promises to pay in the future (i.e., the values of cash, bonds, and stocks) can’t be met. This causes “run on the bank”-type debt problems to emerge, which leads to the printing of money to try to relieve the problems of debt defaults and falling stock market prices, which leads to the devaluation of money and in turn to financial wealth going down relative to real wealth, until the real (inflation-adjusted) value of financial assets returns to being low relative to tangible wealth. Then the cycle begins again.

30 percent—Domestic equities: US stock funds, including small-, mid-, and large-cap stocks 15 percent—Developed-world international equities: funds from developed foreign countries, including the United Kingdom, Germany, and France 5 percent—Emerging-market equities: funds from developing foreign countries, such as China, India, and Brazil. These are riskier than developed-world equities, so don’t go off buying these to fill 95 percent of your portfolio. 20 percent—Real estate investment trusts: also known as REITs. REITs invest in mortgages and residential and commercial real estate, both domestically and internationally. 15 percent—Government bonds: fixed-interest US securities, which provide predictable income and balance risk in your portfolio. As an asset class, bonds generally return less than stocks. 15 percent—Treasury inflation-protected securities: also known as TIPS, these treasury notes protect against inflation. Eventually you’ll want to own these, but they’d be the last ones I’d get after investing in all the better-returning options first.

It’s importance, however, is bigger than that. Treasury securities are the risk-free yield curve for all of the financial markets. That’s right, the yields of Treasury Bills, Notes, and Bonds from overnight to 30 years make up a yield curve that is used to price all other fixed-income securities. The Treasury market is the reference rate for interest rates. Treasurys are a tool for pricing corporate bonds, municipal bonds, emerging market bonds, federal agencies, mortgage-backed securities, and other dollar assets. On top of that, they’re also a tool for speculation and hedging risk.

The book doesn't have to be all about U.S. Treasurys, but that's mostly what it’s about. U.S. Treasuries are the foundation of the Repo market. However, these days there are Repo transactions in just about any financial instrument: federal agencies, municipal bonds, corporate bonds, foreign government bonds, emerging markets bonds, mortgage loans, etc.

The data bears this out. In addition to a “persistence scorecard,” S&P Dow Jones Indices publishes snapshots of how many mutual funds beat their benchmarks. Most years, a majority underperform their indices, whatever the market. Over multiple years, the data becomes progressively grimmer. As of June 2020, only 15 percent of US stock-pickers had cumulatively managed to surpass their benchmark over the last decade. In bond markets, it is a similar tale, albeit varying depending on the flavor of fixed income. The data is more favorable for fund managers in more exotic, less efficient asset classes, such as emerging markets, but on the whole the data is clear that in the longer run most fund managers still underperform their passive rivals after fees.

In any market, as in any poker game, there is a fool. The astute investor Warren Buffett is fond of saying that any player unaware of the fool in the market probably is the fool in the market. In 1980, when the bond market emerged from a long dormancy, many investors and even Wall Street banks did not have a clue who was the fool in the new game. Salomon bond traders knew about fools because that was their job. Knowing about markets is knowing about other people’s weaknesses. And a fool, they would say, was a person who was willing to sell a bond for less or buy a bond for more than it was worth.

as inflation has fallen, so bonds have rallied in what has been one of the great bond bull markets of modern history. Even more remarkably, despite the spectacular Argentine default - not to mention Russia’s in 1998 - the spreads on emerging market bonds have trended steadily downwards, reaching lows in early 2007 that had not been seen since before the First World War, implying an almost unshakeable confidence in the economic future.

There are six that I think are really important and they are US stocks, US Treasury bonds, US Treasury inflation-protected securities [TIPS], foreign developed equities, foreign emerging-market equities, and real estate investment trusts [REITs].

And, as inflation has fallen, so bonds have rallied in what has been one of the great bond bull markets of modern history. Even more remarkably, despite the spectacular Argentine default – not to mention Russia’s in 1998 – the spreads on emerging market bonds have trended steadily downwards, reaching lows in early 2007 that had not been seen since before the First World War, implying an almost unshakeable confidence in the economic future. Rumours of the death of Mr Bond have clearly proved to be exaggerated. Inflation has come down partly because many of the items we buy, from clothes to computers, have got cheaper as a result of technological innovation and the relocation of production to low-wage economies in Asia. It has also been reduced because of a worldwide transformation in monetary policy, which began with the monetarist-inspired increases in short-term rates implemented by the Bank of England and the Federal Reserve in the late 1970s and early 1980s, and continued with the spread of central bank independence and explicit targets in the 1990s. Just as importantly, as the Argentine case shows, some of the structural drivers of inflation have also weakened. Trade unions have become less powerful. Loss-making state industries have been privatized. But, perhaps most importantly of all, the social constituency with an interest in positive real returns on bonds has grown. In the developed world a rising share of wealth is held in the form of private pension funds and other savings institutions that are required, or at least expected, to hold a high proportion of their assets in the form of government bonds and other fixed income securities. In 2007 a survey of pension funds in eleven major economies revealed that bonds accounted for more than a quarter of their assets, substantially lower than in past decades, but still a substantial share.71 With every passing year, the proportion of the population living off the income from such funds goes up, as the share of retirees increases.

FID employees sold and traded bonds, including government bonds, junk bonds, mortgages, and emerging markets debt. FID salesmen and traders took huge risks, and FID profits were much more volatile than those of IBD, but when Morgan Stanley had a really good year, it was because of FID. FID was on the trading floor, where there were no flip books. A new sales-and-trading associate had only three tasks: (1) Feed your boss, (2) withstand abuse, and (3) learn.

It wasn’t clear what “emerging” meant, or how these markets might “emerge.” Still, it sounded awfully good, and it helped cloud the fact that the emerging bond an investor bought actually was a Peruvian loan that hadn’t paid any interest since the 1800s.

When emerging markets cannot pay foreign debts, options vanish. Unavoidable defaults shut off access to global capital markets. Without access to capital, economies contract. Local currency becomes worthless. Printing more money invites inflation and hyperinflation. Poverty proliferates. Governments that cannot provide for their populations do not last long. Chaos opens the door to empty promises by authoritarians armed with populist slogans and freelance militias. Advanced economies are not invulnerable, as history has shown repeatedly. It’s worth noting that in 1899 cautious investors sought safety in one-hundred-year bonds issued by the Habsburg Empire that ruled Austria-Hungary. When the anarchist Gavrilo Princip assassinated Austria’s archduke Ferdinand in June 1914, an act that ignited World War I, sovereign Habsburg bonds were still holding their value relative to other European bonds. In other words, no experts saw the end coming. Within four years, the Habsburg Empire was history. Two decades later, the postwar debt and reparations bills that nearly smothered Germany helped usher in World War II.

_____________ ___________________, hereby state that I am an investor who is seeking to accumulate wealth for many years into the future. I know that there will be many times when I will be tempted to invest in stocks or bonds because they have gone (or “are going”) up in price, and other times when I will be tempted to sell my investments because they have gone (or “are going”) down. I hereby declare my refusal to let a herd of strangers make my financial decisions for me. I further make a solemn commitment never to invest because the stock market has gone up, and never to sell because it has gone down. Instead, I will invest $______.00 per month, every month, through an automatic investment plan or “dollar-cost averaging program,” into the following mutual fund(s) or diversified portfolio(s): _________________________________, _________________________________, _________________________________. I will also invest additional amounts whenever I can afford to spare the cash (and can afford to lose it in the short run). I hereby declare that I will hold each of these investments continually through at least the following date (which must be a minimum of 10 years after the date of this contact): _________________ _____, 20__. The only exceptions allowed under the terms of this contract are a sudden, pressing need for cash, like a health-care emergency or the loss of my job, or a planned expenditure like a housing down payment or a tuition bill. I am, by signing below, stating my intention not only to abide by the terms of this contract, but to re-read this document whenever I am tempted to sell any of my investments. This contract is valid only when signed by at least one witness, and must be kept in a safe place that is easily accessible for future reference.

The arch-capitalist began his working life as a bond trader at Greedspin in New York in the 1960s. He rose to become one of the firm’s most successful M& A advisers during the 1980s and 1990s. His role in the disastrous merger of General Chocolate and ByteBack in 2000 led to his departure in 2004, following an official investigation into irregular practices. “I have no regrets about that deal. For General Chocolate, it was a case of either eat or be eaten.” The sommelier arrives with the red wine, quickly followed by the main course. Churn impales his meat, cuts it into squares and dispatches it to his molars. His songbird side order–a dish which is now banned in the EU on animal rights grounds–is skewered and consumed, beak-to-tail, in a single mouthful. “Do you know, they drown it alive in Armangac!” he exclaims as he noisily munches through the bones. Establishing a pattern which was to be repeated, Churn bounced back from the General Chocolate fiasco in a new guise. In 2005, he re-emerged as the Chairman of RearView Capital Partners, the private equity firm, at a time when huge sums were raised and invested at the peak of the credit bubble. “I have always tried to find the hot areas of the market where I can facilitate the flow of money. In our business, flows mean fees. It’s really very simple.

When playing a bear market, the same rules hold: You want to diversify your risks, especially knowing that collapses move even faster than rallies. You need to decide how much safe cash or near cash you want to hold to sleep at night and to handle financial emergencies, like the loss of your job or your house. Then decide how much to put into longer-term high-quality bonds, like those 30-year Treasuries and AAA corporates, but I think it’s still premature to make this move at the time of this writing, in August 2017. Then decide how much you want to put into a dollar bull fund or the ETF UUP, which tracks the U.S. dollar versus its six major trading partners. If you’re willing to risk part of your wealth, you can also bet on financial assets going down—from stocks to gold. Stocks are the one type of financial asset that goes down in either a deflationary crisis, like the 1930s, or an inflationary one, like the 1970s. So shorting stocks is the best way to prosper in the downturn, either way. But don’t leverage this bet. The markets are simply too volatile. You can short the stock market with no leverage by simply buying an ETF (exchange-traded fund) like the ProShares Short S&P 500 (NYSEArca: SH). It’s an inverse fund on the S&P 500, so if the index goes down 50 percent, you make 50 percent. The ProShares Ultrashort (NYSEArca: QID) is double short the NASDAQ 100, which is likely to get hit the worst. If you make this play, just do a half share, to avoid that two-times leverage (hold the other half in cash or short-term bonds). Direxion Daily Small Cap Bear 3X ETF (NYSEArca: TZA) is triple short the Russell 2000, which is also likely to lead on the way down. So buy only a one-third share of this one, to remain without leverage. (That means the money you allocate here should be one-third in TZA and two-thirds in cash, to offset the leverage.) And unlike the gold bugs, I see gold collapsing. It’s an inflation hedge, not a deflation hedge. If gold rallies back as high as $1,425—on my predicted bear-market rally—then it could easily drop to around $700 within a year. Your last decision is whether to risk some of your funds betting on gold’s downside, for the greatest potential returns. You can buy DB Gold Double Short ETN (NYSEArca: DZZ)—double short gold—at a half share, to offset the leverage, or just simply short GLD, the ETF that follows gold. There you have it. How to handle the coming crash.

33% US Total Bond Index 27% US Total Stock Index 14% Developed (Foreign) Markets Index 14% Emerging Markets Stock Index 12% US REIT Index (Real Estate)

The fervour accompanying these events may be deceptive. If it expresses nothing more than the zeal with which the countries of the East are casting aside the bonds of ideology, or if it is a mimetic fervour - a tribute, as it were, to those liberal countries where all liberty has already been traded in for a technically easy life - then we shall have found out definitively what freedom is worth, and that it is probably never to be discovered a second time. History offers no second helpings. On the other hand, it could be that the present thaw in the East may be as disastrous in the long term as the excess of carbon dioxide in the upper atmosphere, that it may bring about a political greenhouse effect, and so overheat human relations on the planet that the melting of the Communist ice-sheet will cause Western seaboards to be submerged. Odd that we should be in such absolute fear of the melting of the polar ice, and look upon it as a climatic catastrophe, while we aspire with every democratic bone in our bodies to the occurrence of just such an event on the political plane. If in the old days the USSR had released its gold reserves onto the world market, that market would have been completely destabilized. Today, by putting back into circulation their vast accumulated store of freedom, the Eastern countries could quite easily destabilize that very fragile balance of Western values which strives to ensure that freedom no longer emerges as action but only as a virtual and consensual form of interaction; no longer as a drama but merely as the universal psychodrama of liberalism. A sudden infusion of freedom as a real currency, as violent and active transcendence, as Idea, would be in every way catastrophic for our present air-conditioned redistribution of values. Yet this is precisely what we are asking of the East: freedom, the image of freedom, in exchange for the material signs of freedom. This is an absolutely diabolical contract, by virtue of which one signatory is in danger of losing their soul, and the other of losing their creature comforts. But perhaps - who knows? - this may, after all, be the best thing for both sides. Those societies that were formerly masked - Communist societies - have been unmasked. What is their face like? As for us, we dropped the mask long ago and have for a long time been without either mask or face. We are also without memory. We have reached the point of searching the water for signs of a memory that has left no traces, hoping against hope that something might remain when even the water's molecular memory has faded away. So it goes for our freedom: we would be hard put to it to produce a single sign of it, and we have been reduced to postulating its infinitesimal, intangible, undetectable existence in a (programmatic, operational) environment so highly dilute that in truth only a spectre of freedom floats there still, in a memory every bit as evanescent as water's.

Large-cap U.S. Stock S&P 500 Index Midcap U.S. Stock S&P Midcap 400 Index Small-cap U.S. Value stock Russell 2000 Value Index Non-U.S. Developed stock MSCI EAFE Index Non-U.S. Emerging stock MSCI Emerging Markets Index Real Estate Dow Jones U.S. Select REIT Index Natural Resources Goldman Sachs Natural Resources Index Commodities Deutsche Bank Liquid Commodity Index U.S. Bonds Barclays Capital Aggregate Bond Index Inflation Protected Bonds Barclays Capital U.S. Treasury Inflation Note Index Non-U.S. Bonds Citibank WGBI Non-U.S. Dollar Index Cash 3-Month Treasury Bill

Ionic is the ‘opposites attract’ chemical bond,” Elizabeth explained as she emerged from behind the counter and began to sketch on an easel. “For instance, let’s say you wrote your PhD thesis on free market economics, but your husband rotates tires for a living. You love each other, but he’s probably not interested in hearing about the invisible hand. And who can blame him, because you know the invisible hand is libertarian garbage.” She looked out at the audience as various people scribbled notes, several of which read “Invisible hand: libertarian garbage.” “The point is, you and your husband are completely different and yet you still have a strong connection. That’s fine. It’s also ionic.