When the interest rate environment changes, investors face unique challenges, especially when it comes to replacing a maturing bond. For instance, many local investors hold the NROCC (National Road Operation and Construction Company Ltd.) 9.375% bond maturing in November. They received 50% of the principal in 2023, when yields and coupons were at record highs, allowing reinvestment at similar or better rates for the medium to long term. However, just a year later, these investors will struggle to find comparable yields.
If you find yourself unable to replace a bond with one offering a similar or better return, it may be time to change...
We are now officially in the last quarter of the year, and some would say time flies when you are having fun. Although, many fixed income investors would probably beg to differ and say the last two years were not fun due to market volatility. How quickly we forget the opportunities the volatility presented!
The Federal Reserve hiked its benchmark interest rate 11 times between March 2022 and July 2023, held them steady at a historic high for more than a year and finally announced rate cuts in September of this year. As we approach the end of 2024, now would be an ideal time for investors to begin to review their portfolios and reassess the...
As the landscape of fixed-income investments continues to change, the upcoming maturity of NROCC (National Road Operation and Construction Company Ltd.) 9.375% bonds presents both opportunities and challenges for investors as they find themselves at a crossroads concerning their next steps. With the maturity date approaching in November 2024, it is crucial for bondholders to devise effective strategies for reinvestment. This juncture provides an excellent opportunity for investors to reassess their strategies, consider market dynamics, and make informed decisions regarding reinvestment.
Investors in the NROCC 9.375% bond will remember that...
In a decisive move aimed at preserving economic expansion, the U.S. Federal Reserve (Fed) recently cut its policy rate by a larger-than-expected 0.5% or 50 basis points (bps), bringing the federal funds target range down to 4.75%-5.0% from 5.25%-5.5%. This marks the first reduction in four years, signalling the beginning of a new easing cycle. The rate cut is an important step designed to gradually remove restrictive monetary conditions and ultimately reach a neutral rate of approximately 2.9%. The rate adjustment is widely viewed as a proactive approach, following the most aggressive tightening campaign in four decades, and it is likely to...
When life changes, money inevitably changes too. Major life events often prompt reevaluating financial priorities, strategies, and habits. Understanding the intersection of life transitions and financial adjustments is crucial for maintaining financial health and achieving long-term goals. In our recent client survey, many of our respondents said that they chose to invest with Sterling Asset Management after a major life-changing event. We have also discovered that people view financial planning as a simple process and are not prepared for these changes. In reality, there is no cookie-cutter solution to the number of financial challenges that...
As interest rates remain low, many issuers of debt (e.g. bonds, corporate notes, etc.) will look for possible ways of reducing their interest expenses. They may do this by executing call options and reissuing debt at lower rates. These lower rates will reflect the current market levels for...
May 23, 2021
Due to the heavy influx of news that we receive daily, you may have missed out on some financial news and the opportunities presented by the tremendous volatility in the U.S. stock, Mutual fund, and Bond markets as well as the various upheavals in other global markets. Market volatility...
May 16, 2021
How often have you heard the terms “bull” or “bear” used in the investing world to describe general actions, attitudes, or sentiment, either of an individual asset or the market conditions? As common as these terms are, defining, understanding, and remembering what they mean is not always...
May 09, 2021
One of the many things I have observed during this pandemic is how similar people and Investments are. I know this seems like a strange thing to say but journey with me for a few and you will see the similarities too.
One of my friends and I had a conversation about curfew compliance a...
May 02, 2021
How often do you re-assess how much money you will need to last you through your retirement? Did you know that this figure will change based on the interest rate environment? Interest rates affect how much money you need to put aside each month for retirement. It also affects what your...
Apr 25, 2021
The U.S. equity markets have attracted a lot of interest in recent months as the economic recovery takes shape (i.e., V-shaped recovery) and even accelerates. Indeed, the equity markets have had a tremendous run since their COVID-19 meltdown in March 2020 which resulted in the major U.S...
Apr 18, 2021
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