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Schwab Investing Brief

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Extra Credit: The Lowdown on Enhancement Programs for School District Bonds
by Cooper J Howard and Rob Williams
August 23, 2016

Looking for extra protection for your school district bonds? Consider munis backed by state credit-enhancement programs.

What Does Strong Job Growth Mean for Bond Investors?
by Kathy A Jones
August 11, 2016

Healthy recent U.S. employment growth suggests the Fed could raise rates again this year. Here's what investors should consider doing now.  

Munis: How to Invest in Infrastructure-Backed Bonds
by Cooper J Howard and Rob Williams
August 02, 2016

Politicians are talking more about the need to invest in America’s infrastructure. Here’s what you need to know about investing in revenue-backed municipal bonds.

Healthy and Wealthy: How Planning Can Boost Your Well-Being
by Rob Williams
July 28, 2016

Research has shown that planning can be an effective way to reinforce behavior that’s good for your health and your finances.

Do TIPS Make Sense When Inflation Is Low?
by Collin Martin
July 26, 2016

Yields on Treasury Inflation-Protected Securities may not fully reflect the potential for rising prices, which could make them attractive. 

With a Whimper Instead of a Bang: Is the Great Bond Bull Market Over?
by Kathy A Jones
July 20, 2016

U.S. Treasury yields might have bounced, but global economic weakness will likely keep prices under pressure.

Market Stress: How Emotions Can Hurt and Help Your Portfolio
by Rob Williams
July 06, 2016

Emotional reactions to market stress can knock a portfolio off course. Here’s how you can prepare.

Puerto Rico Looming Default and Restructuring Bill: What You Need to Know
by Cooper J Howard and Rob Williams
June 30, 2016

Puerto Rico is on the brink of potentially the largest municipal default in U.S. history. What could that mean for your bond portfolio?

Brexit: What Does It Mean for U.S. Corporate Credit?
by Collin Martin
June 28, 2016

U.K. voters’ decision to leave the EU could mean increased volatility in U.S. credit markets. Here are some tips to help your portfolio weather the storm.

Brexit: What Does It Mean for the Bond Market?
by Kathy A Jones
June 24, 2016

Amid market turmoil, investors are flocking to U.S. Treasuries. What else can investors expect as a result of Brexit?

What investors need to know about helicopter money
by Jeffrey Kleintop
June 13, 2016

The return of deflation in Japan has led some to call for the use of “helicopter money” which we see as unlikely to be effective at boosting growth, but may raise the risks to the global financial system.

Waiting for a Fed Rate Hike: Bond Investments That May Make Sense Now
by Collin Martin
June 09, 2016

The Federal Reserve is likely to raise rates again this year, but that doesn’t mean fixed-income investors need to wait on the sidelines for a better entry point.

State Municipal Bonds: Should Slowing Tax Revenue Growth Worry Investors?
by Cooper J Howard and Rob Williams
June 02, 2016

State tax revenue growth has been slowing—should municipal bond investors be worried?

Bond Index Investing: Why You Should Track More Than One Benchmark
by Kathy A Jones
May 19, 2016

Bond market changes mean that even mutual funds and ETFs tracking a broad bond index could expose investors to more risk than they realize. 

5 Cases Where Out-of-State Munis Might Make Sense
by Cooper J Howard and Rob Williams
May 10, 2016

Out-of-state municipal bonds may not offer in-state tax advantages, but they could still help diversify a muni portfolio.  

The ECB’s Latest Plan: What Does It Mean for U.S. Corporate Bonds?
by Collin Martin
May 05, 2016

The European Central Bank is poised to buy corporate bonds. Here’s how its plan may affect the U.S. investment-grade corporate bond market.

Retirement Spending: How Much Can You Afford?
by Cooper J Howard and Rob Williams
May 03, 2016

What’s the right spending level in retirement? The 4% rule is a good starting point for planning, but individual considerations still apply.

Mixed Signals From the Bond Market: Something’s Got to Give
by Kathy A Jones
April 21, 2016

If you’ve done well recently by investing in high-yield and long-term bonds, take heed: It’s unusual for both to outperform at the same time.

Bond Ladders: A Useful Tool for Retirement Income
by Rob Williams
April 18, 2016

Bond ladders can help you manage cash needs in retirement, allowing you potentially to take more risk elsewhere in your portfolio.

Pension Woes: Why Chicago Doesn’t Represent the Entire Muni Market
by Cooper J Howard and Rob Williams
April 11, 2016

Pensions represent a burden on the $3.7 trillion muni market but most municipalities are able to meet their regular pension expense.

Looking for Extra Yield? The Case for Preferreds
by Collin Martin
April 11, 2016

Preferreds share characteristics with both stocks and bonds, and offer higher yields than most traditional fixed income investments.

Will Rising U.S. Debt Levels Keep the Fed On Hold?
by Kathy A Jones
April 04, 2016

Rising interest rates could add to the national debt burden, but that isn’t likely to deter further Fed hikes.

How to Build a Bond Portfolio
by Rob Williams
March 21, 2016

The bond market is large and complex, so it helps to focus on bonds that provide diversification, stability and income. 

Not Always Tax Free: 7 Municipal Bond Tax Traps
by Cooper J Howard and Rob Williams
March 10, 2016

If you're interested in tax-free municipal bonds, you might want to keep an eye out for these seven tax traps.

Is That High-Yield Bond Too Good to Be True?
by Collin Martin
February 25, 2016

High-yield bonds may look appealing, but they come with additional default and volatility risks.

Don’t Look Back: Surviving in a Low-Yield World
by Kathy A Jones
February 25, 2016

The Fed's rate increase hasn't offered bond investors the relief they were seeking, so caution remains the order of the day.

Corporate Bond Investors: Check Your Sectors
by Collin Martin
February 18, 2016

The recent drop in commodity prices is a reminder that sector risk can shake up the corporate bond market.

How Will Low Oil Prices Affect Municipal Bonds?
by Cooper J Howard and Rob Williams
February 12, 2016

Will low oil prices hurt your municipal bonds? It depends on the types of issuers and where they’re located.

Currency Wars: Is a Weaker Currency Good or Bad?
by Michelle Gibley
February 03, 2016

What can currency wars do for an economy?

Where Does the Fed Go From Here?
by Kathy A Jones
January 28, 2016

Having just raised interest rates and expressed optimism about the outlook for the economy and inflation, Federal Reserve officials can hardly reverse course just because of volatile stock markets. 

Corporate Bonds: Tread Carefully in High-Yield Market in 2016
by Collin Martin
January 20, 2016

Despite temptingly high yields, we see risks in the high-yield bond market. Low commodity prices, low liquidity and deteriorating fundamentals could lead to further price declines in 2016.

Fixed Income Outlook 2016: New Year, Same Road Map
by Kathy A Jones
January 15, 2016

Bond markets could struggle with uncertainty this year, so investors may want to avoid risky bonds. 

Municipal Bonds: After Outperforming Stocks in 2015, What's Ahead in 2016?
by Cooper J Howard and Rob Williams
January 13, 2016

Municipal bonds not only outperformed most other major bond categories in 2015, but the S&P 500 Index, as well.

Why the Chinese Currency Decline is Rattling Markets
by Kathy A Jones
January 07, 2016

The steady Chinese currency decline since last August has sent chills throughout the global markets. Here’s why, and what investors should know.

Chinese Stock Market Selloff: What’s New, What’s Not
by Jeffrey Kleintop
January 04, 2016

The Shanghai Composite’s 7% drop may not be as concerning as it first appears. Some of the weakness may be a delayed reaction to the Chinese stock market decline last July.

Know What You Own: Why Not All General Obligation Bonds are Created Equal
by Cooper J Howard and Rob Williams
December 09, 2015

The outcome of the Detroit bankruptcy illustrates how important it is for municipal bond investors to know what they own.

Investing in Bonds: Should You Choose Individual Bonds or Bond Funds?
by Rob Williams
December 09, 2015

When investing in bonds, should you choose individual bonds or bond funds? Here are a few guidelines.

Treasury Inflation-Protected Securities Can Provide Inflation Protection Over the Long Haul
by Collin Martin
December 04, 2015

Although low inflation means shorter-term Treasury Inflation-Protected Securities are less attractive, longer-term TIPS can benefit investors seeking inflation protection.

3 Levers to Help Your Retirement Income Last in a Declining Market
by Rob Williams
December 01, 2015

When the market dips, you can adjust your allocation, rein in spending, or buy annuities to help make your portfolio last. We discuss which levers work best.

Is the Federal Reserve Rate Hike Mystery About to Be Solved?
by Kathy A Jones
November 12, 2015

Changes to the Federal Reserve's economic model, coupled with a strong October jobs report, suggest the Fed may finally be on the verge of hiking interest rates.

Why the Illinois Downgrade Shouldn't Scare You Away From State Municipal Bonds
by Cooper J Howard and Rob Williams
November 06, 2015

Although Illinois and a few other states are suffering financial troubles, most states' municipal bonds offer strong credit quality and relatively attractive yields.

Why Barbells and Bond Ladders May Make Sense As a Fed Rate Hike Nears
by Collin Martin
October 28, 2015

Bond barbells and ladders can allow investors to benefit from fixed income investments even as the Federal Reserve is expected to hike interest rates.

6 Reasons Foreign Treasury Selling Is Unlikely to Affect Interest Rates
by Kathy A Jones
October 16, 2015

Although foreign investors have been selling U.S. Treasuries recently, we believe this is unlikely to lead to higher interest rates.

Help Keep Volatility From Derailing Your Retirement Plan
by Rob Williams
October 12, 2015

To help lower the damage from volatility and keep your retirement plan on track, consider investing a chunk of your portfolio in relatively stable assets that can withstand wild price swings.

Preferred Securities Can Offer Opportunities for Yield-Seeking Investors
by Collin Martin
September 30, 2015

Preferred securities can offer benefits to long-term, yield-seeking investors, even if the Fed raises rates this year. 

The First Rate Hike: Watch the Dollar
by Kathy A Jones
September 24, 2015

We explain why the U.S. dollar is a key factor in Federal Reserve decisions to change—or not change—interest rates.

Getting to Know Pre-Refunded Bonds
by Cooper J Howard
September 10, 2015

Looking for high-credit quality bonds? Consider "Pre-Re's."

After Greek Turmoil, Should You Give European Stocks a Chance?
by Michelle Gibley
September 08, 2015

We think there are more reasons to be bullish than bearish about European stocks. 

How Floating Rate Bonds Should Benefit When the Fed Raises Rates
by Collin Martin
September 01, 2015

Floating-rate bonds benefit when the Fed finally begins to raise rates—but not all of them will see immediate gains. 

Why Are Bond Yields Falling If the Fed Is Going to Hike Interest Rates?
by Kathy A Jones
August 19, 2015

Diminished inflation expectations, slow global growth, and changing demographics are some of the forces driving persistent low yields in U.S. bonds.

How Has the Rise in Distressed Debt Affected the High-Yield Bond Market?
by Collin Martin
August 11, 2015

An increase in distressed debt is making risky high-yield bonds even riskier, yet investors haven't been compensated with better performance.

How the Municipal Bond Insurance Market Has Changed Since the Great Recession
by Cooper J Howard and Rob Williams
August 06, 2015

Bond insurance can add a layer of protection, but tends to come with a slightly higher cost and lower yield on the bonds it covers.

What Does the Dollar's Strength Mean for Investors?
by Kathy A Jones
July 23, 2015

The dollar's strength tends to restrain commodity prices and inflation, and boost the performance of U.S. assets relative to foreign investments. 

Corporate Bond Outlook: Volatility, Price Declines May Lie Ahead
by Collin Martin
July 16, 2015

While corporate bond yields have risen this year on expectations of an interest rate hike, we think they may have room to increase further.

Currency Hedging: 5 Things You Need to Know
by Michelle Gibley
July 16, 2015

Consider your time horizon before employing currency hedging for your international stock investments.

With Puerto Rico Debt "Not Payable," Odds of a Restructuring Increase
by Cooper J Howard and Rob Williams
July 13, 2015

We believe Puerto Rico's likely debt restructuring will have a limited impact on the rest of the municipal bond market.

Can Bond Funds Make Sense When Interest Rates Rise?
by Rob Williams
July 09, 2015

Short-term bond funds have turned in the best performance of any major bond fund category in the last three rate-tightening cycles.

China's Stock Plunge – What You Need to Know
by Michelle Gibley
July 08, 2015

China’s stock market has fallen dramatically. What are the implications and what should investors do?

Global Bond Investing: Why You Should Worry About Currency Risk
by Kathy A Jones
June 18, 2015

With the dollar strong and U.S. interest rates poised to rise, we explain how currency risk from international bond investing could compromise your portfolio. 

7 Reasons You Should Care That an Emerging Markets Index May Add Chinese Stocks
by Michelle Gibley
June 16, 2015

As China’s markets expand and more of its stocks become accessible to international investors, its importance in your portfolio will likely grow. 

Bond Market Liquidity Could Shrink When Rates Rise
by Kathy A Jones
June 15, 2015

When the Federal Reserve raises interest rates, market liquidity could become a problem for bonds.

Mortgage-Backed Securities: Single Security Plan for Fannie Mae, Freddie Mac Moves Forward
by Collin Martin
May 29, 2015

A proposal for a single common mortgage-backed security that could be issued by either Fannie Mae or Freddie Mac recently took a step closer to reality.

Chicago's New Junk Bond Rating: Implications for Muni Markets
by Cooper J Howard and Rob Williams
May 20, 2015

What do investors need to know now that Moody's Investors Service has slashed Chicago's bond rating two notches to below investment grade?

Surging Bond Yields: Temporary Correction or New Trend?
by Kathy A Jones
May 15, 2015

Although the steep rise in yields since mid-April looks overdone to us, yields may keep climbing as easy foreign central bank policies raise expectations for growth and inflation.

International Investment: Political Risk May No Longer Be a Reason to Avoid Europe
by Jeffrey Kleintop
May 13, 2015

As mainstream parties regain ground lost to newer rivals, the increased political stability is making Europe more attractive for investors.

Why Corporate Profits Are Falling and What It Means for the Stock Market
by Jeffrey Kleintop
May 04, 2015

With global economic growth on the upswing, we think the recent decline in global corporate profits will be short-lived. 

Corporate Bonds vs. Municipals: Which Make More Sense Now?
by Rob Williams and Collin Martin
April 29, 2015

With after-tax yields comparable to corporate bonds, are municipals now an opportunity for traditional corporate bond investors? 

Mastering Global Diversification: What the Masters Tells Us About the Markets
by Jeffrey Kleintop
April 15, 2015

As economic growth becomes more widespread, global investment diversification has become more crucial for investors.

FAQ: Tax Tips for Retirement Income
by Rob Williams
April 10, 2015

Our tax tips for cutting your bill to the IRS can help increase your retirement income and allow your portfolio to last longer.

One of the Most Important Indicators of Growth Has Turned Positive for Europe
by Jeffrey Kleintop
April 01, 2015

Loan growth is picking up in the eurozone, which could indicate more spending and hiring, and increased growth for the European economy down the road.

4 Reasons Japanese Stocks Could Continue to Rise
by Michelle Gibley
March 31, 2015

Japanese stocks deserve a look from investors for reasons that go beyond Abenomics and the Bank of Japan's quantitative easing program.

March Madness in the Stock Market: Which Factors Will Win the Influence Game?
by Jeffrey Kleintop
March 18, 2015

If we looked at stock market drivers as akin to the NCAA's March Madness, which factors would most influence the results?

The Fed, Housing Prices, Stocks and the Theory of Everything
by Jeffrey Kleintop
March 13, 2015

Should the Federal Reserve raise interest rates before the U.S. housing market has fully recovered?

Your Retirement Plan: How to Transition Your Portfolio for Retirement
by Rob Williams
March 13, 2015

Learn how a smart plan to shift your investments over time can position your portfolio to be ready for retirement.

Opportunities with Preferred Stocks and Securities
by Collin Martin
March 05, 2015

With the average yield on preferred stocks at an all-time low, investors may want to take an active approach to investing in these securities.

How to Create a Sustainable Retirement Spending Plan
by Rob Williams
February 25, 2015

To set up a sustainable retirement spending plan, we recommend tapping multiple sources of cash flow.

Global Earnings Per Share Could Rebound Soon
by Jeffrey Kleintop
February 18, 2015

After peaking for the third time in eight years, will global earnings per share continue falling, or will they bounce back?

Schwab Bond Insights: Bank-Loan Funds, Green Bonds
by Cooper J Howard, Rob Williams and Collin Martin
February 17, 2015

In this issue, we cover the risks of bank-loan funds, and explain how green bonds work.

What Changes Will New Congress Bring for Investors?
by Michael T Townsend
February 09, 2015

Even with Republicans in control of the new Congress, we think the gridlock will persist on many issues. Here's our list of key dates and issues to watch.

Don't Be Fooled by Currency This Earnings Season
by Jeffrey Kleintop
February 04, 2015

Earnings growth in Europe is expected to outpace the U.S. this year, but a critical factor is the euro's weakness against the dollar.

Eurozone Economy: The ECB Can't Save It
by Jeffrey Kleintop
January 22, 2015

Unless structural reforms are taken to address the root causes of deflation, any boost to the eurozone economy from the ECB's actions this week will likely be temporary. 

Federal Reserve: What's the Outlook for Interest Rates in 2015?
by Kathy A Jones
January 22, 2015

With inflation below the Fed's target but economic growth on the upswing, the interest rate outlook is fuzzy in 2015.

Retirement Income Strategies: 3 Key Building Blocks
by Rob Williams
January 15, 2015

We outline three key building blocks to help develop your retirement income strategies.

International Investments 2015: Top 5 Global Issues to Watch
by Michelle Gibley
January 14, 2015

If you're considering making international investments in 2015, we recommend you keep these issues in mind. 

Contrarian Investing: Be Prepared for the Top 5 Surprises in 2015
by Jeffrey Kleintop
January 07, 2015

In five areas of economics and finance, investors may want to be ready for possible surprises with a contrarian investing plan.

Top 5 Ways Chinese Consumers Are Altering Global Investing
by Michelle Gibley
December 08, 2014

As the Chinese economy transitions to a more consumer-led growth pattern, global investors should be paying attention.

Will International Stocks Outperform in 2015?
by Jeffrey Kleintop
November 25, 2014

The U.S. current account—a measure of trade and investment flows in and out of the U.S.—may provide clues to where international stocks are headed relative to U.S. stocks.

What Central Banks Have Learned About Interest Rate Hikes
by Jeffrey Kleintop
November 13, 2014

A number of economies have had to reverse interest rate hikes in the last five years. What have central banks learned from this experience?

What the “Shutdown” by Europe's Government Means for Stocks
by Jeffrey Kleintop
October 30, 2014

While the European Central Bank is prevented from enacting more aggressive stimulus, the European stock market may underperform.

How Earnings Season Is Like Homecoming for Investors
by Jeffrey Kleintop
October 15, 2014

Earnings season is a time for investors to focus on the traditional measure of value: earnings.

Retirement Income Planning: What's Your Risk Capacity?
by Rob Williams
September 30, 2014

You've probably heard about risk tolerance, but when it comes to retirement income planning, a more important thing to understand is your risk capacity.

Fannie Mae and Freddie Mac: Reform of Housing Giants Remains in Limbo
by Michael T Townsend
July 01, 2014

With efforts to reform Fannie Mae and Freddie Mac stalled this year, it will likely be 2015 before we see another attempt at reform. 

Bonds: What You Need to Know About Yields
by Collin Martin
April 10, 2014

It's not hard to understand yield to maturity and the other types of bond yields. Here's what you need to know.


Investors should consider carefully information contained in the prospectus, including investing objectives, risks, charges and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.

Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income and small capitalization securities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.