Why Equities and Bonds are Rising

By Michael Keane

Recently, both equities and stocks have gone up. This is not normally the case. But realistically, this is not a normal market. Both the S&P (up over 17%) and the bond ETF TLT (up over 8%) are up for the year. We believe the main two culprits are new money being invested during a time that the Fed has yet to unwind its bond portfolio.

The main reason we are leaning toward is the thought that we are now seeing an effect of how propped up the bond market is by the Fed, which is worrying. With the tax bill debt increase, along with the Fed planning to unwind a portion of their bond portfolio, bond ETF’s like TLT could be in real danger of not just a decrease in price, but an actual crash. 

New money is also being invested and it is being done so in an allocation method. Putting that on top of the Fed purchases, bonds are probably higher than they should be. 

Per disclosure, our partner KDK Options has had, but does not currently have any positions of either SPY or TLT. 

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 **All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing. Please direct all questions and comments to the blog or to kdkfund@gmail.com or on twitter @kdkfund.

Dividend from Ford Received

A dividend from Ford was received. The fund will portions of it for charity, investor payments, and reinvest the rest to increase the compounding.

The Ford holdings are to a point where nearly 10% of its shares are from dividend buybacks. The plan is to continue with this formula without an end date. 

**All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing. Please direct all questions and comments to the blog or to kdkfund@gmail.com or on twitter @kdkfund.