Morningstar Runs the Numbers

Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.

<0% Karin Anderson explores how world-bond funds are handling negative yields in Japan:

A negative-yielding JGB can still generate capital gains by rolling down the yield curve as the bond nears maturity, which would cause its yield to fall further if the yield curve maintains its current shape. JGBs can also realize gains if Japanese interest rates slip deeper into negative territory. However, there is the risk that if rates fall too far, the negative yield would wipe out any potential capital gains.

2 Conservative Christine Benz on how investors can be too cautious when managing their retirement portfolios:

Considering that the Social Security trust fund is projected to run dry in 2034, maintaining conservative assumptions about Social Security benefits may seem like an extremely prudent tack. But assuming that retirees 40 years hence will get zip, nothing, nada from Social Security is a pretty big stretch, given that some fairly simple, albeit controversial, fixes--such as means-testing, extending the full retirement age, or raising the cap on income that's subject to Social Security tax--can put the program on firmer footing.

2 Housing Economies Bob Johnson observes the differences between the sales of new and existing homes:

If you look at a 12-month rolling average, new home sales are growing at about 10%. That sorts out all the monthly volatility. So, 10%, that's a pretty good number. On the other hand, existing home sales continued to slow a little bit and are running more like 3%. So, it's a very interesting phenomenon.

3 Booms In a Stock Strategist report on the steel industry, Andrew Lane notes the three booms that have boosted prices above the long-term trend:

When we look at the World Bank Metals and Minerals Price Index (which is largely derived from prevailing copper, aluminum, and iron ore prices) since 1960, three investment boom periods are evident, with the China investment boom clearly the most impactful in terms of magnitude and duration.

38 in 1991 Even casual tennis fans might enjoy this oral history of the unexpected performance of Jimmy Connors at the 1991 U.S. Open:

"I've said it many times. That was the best 11 days of my career, and I didn't even win the tournament."

5 Mistakes Also from Christine Benz--what investors shouldn't do with their cash holdings:

… something unusual has happened: Security types that offer FDIC protection, such as certificates of deposit, bank-offered money market accounts, checking and savings accounts, and online savings accounts, are actually outyielding security types without those guarantees.

50 Years The Wall Street Journal looks at half a century of Star Trek:

The pilot episode fell behind schedule and was over budget, costing $616,000--or about $4.7 million in today's dollars--only to get rejected by NBC. The network asked the producers to try again, and "Star Trek" finally made it to air, premiering 50 years ago, on Sept. 8, 1966. It was groundbreaking (a diverse crew represented all regions of Earth on the Starship Enterprise) and prescient (their "communicators" were flip phones 30 years before their time).

5.8 Andrew Bischof highlights a four-star utility that's trading at a small multiple:

Calpine (CPN) offers investors the opportunity to own a best-in-class independent power producer at a substantial discount to fair value, trading at just 5.8 times our 2016 free cash flow forecast.

Most Popular Articles, Videos, and Securities

Most Popular Articles

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Most Popular Videos

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