This is my fourth quarterly examination of various fixed income markets. I generally try and publish the article by the beginning of the second trading week following quarter-end, giving me time to analyze trailing results and synthesize my thoughts. Given Friday's outsized rally in long Treasuries due to BOJ easing and a meaningful miss on the U.S. non-farm payrolls print, perhaps I need to shorten my timeline.

The recent market move notwithstanding, the first quarter of 2013 should be a microcosm of the market we will see over the next several years. Slowly rising Treasury yields produced anemic bond returns in the first quarter with most higher risk instruments outperforming due to modestly compressing credit spreads. The days of equity-like returns in domestic fixed income fueled by monetary accommodation are likely largely in the rearview. This article will discuss how to position your fixed income portfolio in a market

As the Dow Jones Industrial average (DIA) breaks through its all-time high and the S&P500 (SPY) is bumping up against the range, investors want to know: Is this an okay time to keep buying?

To make this assessment, an investor needs to do a relative assessment based on where the market is currently trading. In the case of the S&P 500, the most used conventional model is the PE multiple. It is simple in concept. If you have the data, take the current trading value of the index and divide by the current level of earnings of all the companies in the index to get the PE ratio. Then, you can interpret the ratio relative to current expectations for earnings and possibly relative to where the ratio has been in past similar market conditions to judge whether the market is over or undervalued.

But is this a good way to

Why did CMBS perform well in 2012 and what lies ahead

In 2012, the CMBS (commercial mortgage-backed securities) market had a significant rally as is evident from the table below showing bond spreads over swaps.

Not only were the spreads tighter significantly over the year, the performance was better than expectations by almost any measure. Issuance for the year was $48 Bn compared to forecast of $38 Bn. The new issue 10 year AAA spread to swaps ended at 90 compared to forecast of 140, and new issue BBB spreads ended at 410 compared to a forecast of 587 (all forecasts are averages of predictions by market participants as published in Commercial Mortgage Alert). The spread tightening was not