Long-term investors in funds may have to contend with taking losses for quite some time Ali Masarwah 1 April, 2021 | 4:38AM I used to think the perfect reincarnation would be to be reborn as a president or a pope. Or as a star baseball hitter. But today, I would be reincarnated as the bond market: You can intimidate anyone. This bon mot of James Carvill, an advisor to the Clinton administration, has more than just a grain of truth to it. If a crisis hits the bond market, even the biggest stock losses fade. Bond crashes often have a systemic component. The core of the Great Financial Crisis was a debt crisis, even if immense equity losses are more enduring in our memories. And when the U.S. Treasury market faltered and liquidity problems emerged amid the Coronavirus Crash in March 2020, it was a much bigger alarm signal for professional investors than the losses suffered by TSX, S&P 500 and co.
Walgreens Boots Alliance is one of the Dogs of the Dow. Joe Raedle/Getty Images The Dogs of the Dow and other income investment strategies have enjoyed a bounce so far in 2021, while convertible bonds remain hot and the preferred stock market has experienced a small pullback. High-dividend stocks are faring well as investors rotate into value-oriented strategies. Bulls say the run could last a while given how much high yielders have lagged behind in recent years. The Dogs of the Dow, which are the 10 highest-yielding stocks in the 30-stock Dow Jones Industrial Average, were up 4% year-to-date through Thursday, topping the overall index, which gained 1%. That followed a poor 2020, when the 10 Dogs returned negative 7.7% including dividends, far behind the Dow’s 9.7% total return.
To the Editor: Andrew Bary’s comprehensive, balanced article, “Best Income Investments for 2021” (Cover Story, Jan. 1), spotlights the potential for electric utilities. I concur. Utilities are essential for everyone; they generate earnings 24/7, and if you don’t pay the bill, your power is cut off. The reinvested yield from that underappreciated sector justifies holding those stocks for the long term. Joel Goodman, Centennial, Colo. To the Editor: Enterprise Products Partners is best of breed and proved its superior management, business model, and resilience back in March and April, when it had no problem remaining solvent and maintaining its dividend, and was able to go to issue debt as a safety valve that the market priced at a very low yield.