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The bond market is having a tough start to the year as the Barclays Capital Aggregate Total Return Bond Index (the ETF AGG is a tracker for this index) closed down 0.12% for the first quarter of the year. This is the first negative quarterly return since 2006. The bond market has been in a multi-decade long bull market, with record low interest rates and a stock market that has seen some of the worst drawdowns in history. Over its 37-year history, the BarCap index has produced an average annual return of 7.86%, which is very good. Over that time, it has had only two negative years, in 1994 and 1999.

The main reason for the negative first quarter return is that rates have moved up slightly as investors are becoming more comfortable again with equities, and have been reducing their exposure to bonds in favor of stocks. Many investors bought lower yielding treasures for safety purposes, but if rates rise they will see their value drop. The 20-plus year treasuries, in particular, will drop pretty hard. Investors need to watch their bond holdings closely. Emerging market, high yield and convertible bonds should produce much better returns than treasuries over the long term. Stay nimble and pay close attention to what the Fed says going forward. Any statement by the Fed that rates may move higher will send the longer term treasuries plummeting.

We have been reading and hearing a lot about Bitcoin lately. Bitcoin is a four-year-old digital currency. It's designed to allow worldwide payments with extremely low processing costs. It's basically online money, virtual tokens that can be exchanged for goods and services at places that accept it. It is transferred over a peer-to-peer (P2P) network. Some say it is going to revolutionize global finance. I'm not sure if that will happen, but it is a very interesting concept. When you write your friend a check, money from your account is withdrawn from your bank, and then transferred to her bank, and then she withdraws it as cash (maybe). With Bitcoin, there are no middlemen (other than the users that comprise the network itself). Money goes straight from you to whomever you transfer it to through the Bitcoin P2P network, with no intermediary agency passing along the chips.

There are not yet a lot of places that accept Bitcoins, but there some advantages to using it. There are no middlemen or transaction fees. You can exchange a Bitcoin for real currency. As of right now, a Bitcoin is worth from 5 to as high as 7 in overnight trading. This all sounds wild, doesn't it? But if you think about what has been going on in Cyprus, the average citizen with deposits at their banks might have been better off with Bitcoins.