Pages Menu
TwitterRssFacebook

Posted by on May 23, 2014 in Laif Meidell

Market rise sheds light on investor bias

Market rise sheds light on investor bias

By Laif Meidell, CMT, president of American Wealth Management, and portfolio manager of the AdvisorShares Meidell Tactical Advantage ETF (MATH)

 
The Standard & Poor’s 500 staggered higher on Thursday, gaining 1.15 percent over the past five trading days while closing higher four out of the past six days. Although this is not a significant gain for the number of days the S&P 500 has closed in the positive, it sheds light on investors’ upward bias or buy-the-dips mentality over the past week. Should the bulls be able to maintain the same fortitude we’ve recently seen, they could win the current game of tug of war the bulls and bears appears to be in.

Lower-quality bonds took their cue from the stock market’s positive bias with the Barclays U.S. Convertible Bond Index gaining 1.76 percent over the past five trading days and the JP Morgan Emerging Market Bond Global Index higher by 0.23 percent over the same time period. Although convertible bonds outperformed the S&P 500 over the past week, they have underperformed over the past three months, with the Barclays U.S. Convertible Bond Index declining 0.66 percent.

The longer-term trends this year continue to favor foreign bonds, with the JP Morgan Emerging Market Bond Index higher by 4.38 percent over the past three months and the DB Global Government ex-U.S. Inflation Linked Bond Index gaining 4.6 percent over the same time period.

High-quality bonds, such as the Barclays U.S. 20+ Year Treasury Bond Index, are still higher than the S&P 500 over the past three months, gaining 3.87 percent versus 2.56 percent, respectively. However, high-quality bonds fell to the bottom of our list for the week, with the Barclays U.S. 20+ Year Treasury Bond Index declining by 1.54 percent over the past five trading days.

This commentary originally published in the Reno Gazette-Journal.   Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.

david@mediaworksllc.com

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.

X