Investment Strategy Insights

Agency mortgages are those that are explicitly or implicitly guaranteed by the government. There are three GSEs (Government Sponsored Entities); Fannie Mae, Freddie Mac, and Ginnie Mae. GSE mortgages and bonds backed by those mortgages have no credit risk, but do have interest rate risk.

The end of the value trade may be near as investors push prices beyond economic growth expectations.

A wise man once told me that liquidity is a coward, it’s never around when you really need it. It has stood me in good stead over the years. As an investor traversing the decades one tends to occasionally find oneself in a period of alluring illiquidity premiums or times were accessing “the new new thing” is so new that the related market is inherently illiquid or “the smartest guys in the room” have created a new ‘guaranteed moneymaker’ that can only be accessed (via special invitation and high fees) by a select ‘lucky’ few.

I recently discussed why “Free, Isn’t Really Free” regarding the retail investor. While “free trades” have certainly reduced the transaction costs, the selling of data to the highest bidder has likely cost investors more than they saved.

HANDLS Indexes Co-Founder Matthew Patterson joined Jill Malandrino on Nasdaq #TradeTalks to discuss income investing and a vehicle designed for a predictable flow of income.

HANDLS Indexes Co-Founder Matthew Patterson joined Jill Malandrino on Nasdaq #TradeTalks to discuss income investing and a vehicle designed for a predictable flow of income.

Since the “Financial Crisis,” the hope was that inflating asset prices would trickle down into economic growth. Unfortunately, after a decade of monetary interventions and artificially suppressed interest rates, the wealth gap has exploded. More problematic is the Fed has forced investors to take on excess risk due to the lack of alternatives.

The Pier 88 Investment Team is constructive on the convertible bond asset class given a historically high Sharpe ratio, competitive yield, positive correlation with interest rates, risk-reward profile, and a plethora of new issuances allowing for a diversified portfolio to express thematic views.