For savvy investors, a silver lining in home price declines
By Chad Cristo on February 17, 2011
The Obama administration’s proposal to wind down Fannie Mae and Freddie Mac could change the mortgage market and may make it more challenging for individuals to obtain a mortgage. But as Jeff Knight details, even in this past year’s weak housing market there were investment opportunities. By investing in a segment of the residential mortgage-backed securities (RMBS) market, Putnam’s absolute return funds sought gains while looking to temper portfolio volatility, even as the headlines told of ongoing struggles in the housing sector.
Read Jeff’s insight at putnam.com
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The political eruptions in Egypt and elsewhere in the Middle East remind us that market volatility remains an ever-present possibility for investors. The reasons to expect volatility in 2011 go well beyond populist uprisings overseas. The worldwide financial crisis of 2008 resulted in … 
Last year’s investment environment was marked by volatility in both the stock and bond markets. And with $10.8 trillion in cash still on the sidelines, according to Putnam research, many investors are clearly concerned about risk.
Historically, many mutual fund investors have achieved portfolio diversification by maintaining static allocations to a small number of focused fixed-income funds, namely intermediate-term bond funds and government bond funds. In fact, ICI reports that nearly half of all mutual fund investors have … 
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