Maximizing Business Profits: How to invest your retained earnings
For business owners, managing cash flow effectively is a key component of success. When a business generates surplus cash beyond its current operational needs, one way to maximize value is by investing in the global fixed income market. Fixed income investments, such as bonds and other debt securities, offer a range of benefits including growth […]
Securing Your Legacy II: Financial Goals & the Right Partner
It’s a New Year! -So, get ready to embark on a journey of self-reflection, analysis, and strategic planning. After my previous article Securing your Legacy—Estate Planning and Wealth Creation, I decided to make “Securing Your Legacy” a series, where I will be diving into the different elements of leaving a lasting impact, not just in […]
Savvy in the Short Term
Every investor’s journey is different. Occasionally an investor may receive a financial windfall, be it an investment maturity, proceeds from a tender or sale of property or an unexpected inheritance. When an investor receives a lump sum, they may wonder, “What should I do next?” Before taking any action, they should consider how these funds […]
Lessons learnt this past year!
As the sun sets on the year 2023 and the new year 2024 peeks over the horizon, we look back at the year that was, while looking forward to the opportunities ahead. There are many lessons to be learnt from the experiences of the past year which should mold our decisions with the dawn of […]
Key Considerations When Evaluating a Financial Institution to Invest With
Selecting the right financial institution for your investments is a pivotal decision that requires a thorough evaluation of various factors. Here are some considerations to weigh when choosing where to invest your hard-earned money: Customer Service and Communication: Excellent customer service is a cornerstone of a positive investor experience. Evaluate the responsiveness, professionalism, and communication practices […]
Weather Proofing Your Portfolio
The last few weeks have been quite traumatic for us Jamaicans, first we were very shaken up by an earthquake, which followed on the heels of the one experienced in September, then just a few weeks later, we experienced storm like conditions which understandably would have left several of us still feeling traumatized. As I […]
Securing Your Legacy: Estate Planning & Wealth Creation
You’ve probably heard the expression “You can’t take it with you,” referring to the fact that you won’t be able to take your money or valuables with you when you die. However, if you have a family, you should value building and preserving wealth in order to leave an inheritance for future generations. As a […]
Common Roadblocks to Investing and How to Overcome Them
Investing is a key component of building wealth and achieving financial security. However, many people encounter roadblocks that prevent them from taking the plunge into the world of investments. These roadblocks can be financial, psychological, or related to a lack of knowledge. In this article, I will introduce some common roadblocks to investing and offer […]
How to prepare for your NROCC Paydown
The National Road Operating and Constructing Company, NROCC 9.375% 2024 Bond is set to make a principal payment to bondholders on November 10th, 2023. You should be receiving roughly 50% of the principal amount you own. Be sure to ask your broker about it and prevent the funds from sitting idly in your account. As investors […]
Venezuelan bonds resume trading!!!
Investors worldwide have suffered losses to their investment portfolios as they hold or have held bonds issued by the Republic of Venezuela or the state-owned oil company Petróleos de Venezuela, S.A. (PDVSA). Many bond investors here in Jamaica once owned or still own bonds issued by one or both entities, which are now in default. For […]
What should I do with my Investment Income?
“Christine, what can I do with the income from my investment?” This is a question I’m often asked by prospective and current clients. My response is generally the same: “It depends on your goals and financial needs”. Truly there is no right or wrong answer as it depends on the individual and what ultimately works […]
The Demise of the U.S. Dollar – Real or Overblown?
A client of ours recently asked my opinion on the financial media frenzy debate about the possible demise of the U.S. dollar in the near-term. Concerns range from growing national debt to the emergence of competing currencies and economic shifts. In this article, we’ll explore the arguments for and against the demise of the U.S. […]
Lessons learned as an Investment Advisor
As an investment advisor, I have had the privilege of working with clients from all walks of life and helping them to make informed decisions about their finances. My experiences have been both challenging and rewarding, and over the years, I have learned valuable lessons about the importance of financial planning, risk management, and building […]
Buying assets during times of distress
The saying, “Buy when there is blood in the streets, even if it is your own blood,” is a powerful adage in the world of finance and investing. This statement, which is often attributed to the legendary British banker Baron Rothschild, encapsulates a contrarian approach to investing that can yield significant rewards when applied wisely. […]
Things to Consider Before Investing Your Call Proceeds
When you hold a callable bond, there’s always the possibility that the issuer may decide to redeem it before its maturity date. This usually occurs when interest rates have fallen, allowing the issuer to refinance at a lower cost. But there are other reasons that an issuer may call their bond such as reducing their […]
A Little Bit of This and a Little Bit of That
Have you ever asked an older relative for a recipe and heard “Oh I used a bit of this and a splash of that with no real measurement” but somehow the end product tasted fantastic? Wouldn’t it be great if our investment portfolios acted in the same manner where a random bit of this and […]
Make informed financial decisions
With all the news and information we receive daily, we can feel overwhelmed. In recent times both the local and international financial markets have been flooded with news which can influence our current investment decision-making or make us question the investments we currently have. Being able to filter through the information available to us to […]
Staying high for longer
The U.S. economy is doing better than expected but is not the only one. GDP growth of 2% in Q1 was followed by 2.4% growth in Q2 and the Atlanta Fed GDPNow forecasting model currently suggests growth of 5.9% for the 3rd quarter. The implication of this re-acceleration in U.S. GDP growth is that the U.S. […]
What You Need To Know When Investing In Your 70’s and Beyond
We all know how important investments are as a part of financial planning and how they can provide greater comfort and safety for the future. Although it is popular to encourage young people to invest, it is even more important for clients over the age of seventy to maintain or to begin investing prudently. There […]
Investing for Income
Investing for income is a strategic investment approach where the primary focus is on generating ongoing cash flow rather than capital appreciation. Income investing entails building an investment portfolio that consists of assets such as bonds, dividend stocks, real estate and annuities that generate a regular income stream. This strategy can provide financial stability and […]
Calling the Way to Higher Yields
Last week, Barclays announced the call of its 7.75% Perpetual Additional Tier 1 (AT1) Capital Note with a September 15, 2023 call date. This means that noteholders will get back their principal (i.e. face value) and the interest earned between June 2023 and September 2023. Today, we’ll look at how the note performed, refresh our […]
The Impact of a Change in Senior Leadership on Investments
The appointment of a new Chief Executive Officer (CEO) is a pivotal event for any publicly listed financial corporation, and its effects may send ripples throughout the financial markets. Investors should closely monitor leadership changes as they can significantly impact a company’s stock and bond performance. Given the recent developments at one of the largest […]
Ignoring the noise
To quote the legend Bob Marley there seems to be “so much trouble in the world”. Between newscasts, podcasts, talking heads and social media there is no doubt there has been a lot of noise in the market both globally and locally. When investors get caught up in the noise many may panic sell or […]
The real return on Real Estate
An investment in Real Estate can provide both income and capital gains to the investor. In analyzing the returns on their investment portfolio, many believe that Real Estate as an asset class has shown to be one of the most lucrative over the long term. It is often said that “You cannot lose with brick […]
Positive Start to 2023 Sets the Stage for an Optimistic Second Half
The first half of 2023 has witnessed a robust start to the year that sets the stage for an optimistic outlook for the second half. Despite the lingering scars from the challenges of 2022 as the U.S. Federal Reserve raised its policy rate by an aggressive 425 basis points (bps) or 4.25 percentage points to […]
How to navigate noise in the market
What is noise in the market? In this context, noise refers to information and opinions on a company you are invested (financially or emotionally) in. It includes every tweet, post, click bait news article and blogger that is has something to say on the company you are invested in. “Noise” is usually unspecific, fails to describe […]
Mid-Year Review
The first six months of the year have passed, and the investment landscape continues to be volatile. The days of setting it and forgetting it regarding your portfolio are long over. Many people start a new year with new resolutions and financial goals. As we enter the second half of the year, now is a […]
Time to reinvest…
Throughout the life of a fixed income asset, the interest payment terms and schedule of payments are usually known. These are stated at the inception when the asset/investment is first being issued. The maturity date and conditions of maturity, if any, are also usually stated upfront. Investors holding fixed income assets usually are aware of […]
Understanding Asset Classes in Investing
Investing can be a powerful tool for wealth creation and financial security, but it requires careful consideration and informed decision-making. One crucial aspect of successful investing is understanding asset classes. Asset classes serve as the building blocks of investment portfolios, providing diversification, risk management, and potential returns. In this article, we will explore why knowing […]
Creditors vs. Stockholders
If you own a bond – you are lending money to the issuer. You are mostly concerned about the company’s ability to repay your principal and make your interest payments on time. Your perspective as a bondholder is very different to that of a stockholder. Today we highlight the differences. Some Stockholders like to see […]
Bonds & Real Estate…. Similarities and Benefits
Bonds and Real Estate are two unique investment options allowing you to diversify your portfolio while proving to be a relatively safer investment than stocks, cryptocurrency, and some other assets. Both bonds and real estate are steady investment options with relatively low volatility allowing you to invest worry-free while benefitting from potential capital appreciation and […]
How bond prices work
One of the most confusing components of “bond math” is the pricing. Like most assets – the price is a major determinant of your total return. Today we look at the pricing of fixed income instruments and how your total return is calculated. We present several concepts that are simplified for brevity and all examples […]
De-Dollarization
The dominance of the US dollar has been a hot topic in recent weeks. The consensus is that in the long term there may be a trend toward currency diversification. However, the dollar losing its reserve status will not occur any time soon. As mentioned, investors should not look to immediately exit their US dollar […]
The US Dollar dominance
In a globalized economy, the use of a single dominant currency allows for ease and efficiency of trading between countries. With each country having their own currency, trading with multiple partners is more difficult when having to pay for goods and services from each trading partner in varying currencies. The single dominant currency needs to […]
Navigating economic uncertainty with bonds
In times of economic uncertainty, investors tend to flee to fixed-income securities such as bonds to protect their investments. This is because bonds are considered safer investment options that provides stable returns, especially during a recession. In this article, we will explore why bonds perform well during a recession and the factors that contribute to […]
Healthy habits and your Financial Independence
A healthy lifestyle and financial independence are two of the most important goals that people strive to achieve. By achieving financial independence, you will not only have greater control over your future but also the freedom and flexibility to pursue your own passions and interests. At first glance, it may be difficult to recognize the […]
Buying Bonds (Premium vs Discount)
For new investors the process of buying bonds can be complex, as it involves various terminologies and buying scenarios. Today, we will discuss buying bonds at a premium versus a discount. Let’s start at the beginning, when a bond is issued, it is available for purchase at its face value, which is the amount of […]
Rising interest rates
As we approach the end of the first quarter of 2023 uncertain market conditions continue to prevail. Right on the heels of the failure of Silicon Valley Bank we saw where Credit Suisse was acquired by UBS. Investors will have to continue to navigate choppy waters and analyze their portfolios. It’s never been more important […]
The “Banking Crises” Explained
The only cure for a crisis of confidence and anxiety is an improved understanding of the events that are occurring. We do not need to have a firm grasp of the complexities of every accounting rule on a bank’s balance sheet to make prudent decisions. This article tries to provide readers with a basic understanding […]
Brace yourself……..
The past 2 weeks in the global financial markets have been “eventful”, to say the least. In the United States, Chairman of the Federal Reserve Jerome Powell indicated that interest rates were likely to go higher than previously anticipated, with higher-than-expected incremental rate increases. Financial markets were immediately affected by Mr. Powell’s comments. Later in […]
Navigating a High Interest Rate Environment for longer
Among the few things which are certain nowadays is that uncertainty will persist in global financial markets. Hence, after a brutal year in 2022 for investing, 2023 started out encouragingly for investors as continued signs of cooling inflation fuelled expectations of a further slowdown in the pace of central bank rate hikes and eventually rate […]
Impact of Capital Markets on Economic Growth
Capital Markets plays a key role in the development of an economy. To demonstrate the impact of capital markets on economic growth we will explore the concept of the circular flow of income, what is financial capital, how companies access financial capital, the uses of financial capital and the link to economic growth. An economy […]
IS YOUR MONEY SAFE?
Are you someone who reads all the reviews on Amazon and thoroughly researches a product before adding it to your cart and checking out? Do you research the financial institution where you are depositing or investing your money with the same thoroughness? Recent incidents in the Jamaican financial sector will hopefully make you more discerning […]
My advice to my clients
When my clients ask me what I think about recent developments, I remind them that nothing has changed. I tell them that the same investment principles that I have reminded them of for years still apply. These are some that readily come to mind. The first one is to know your financial institution. Do all the […]
Steps to Become a Smart Investor
The need to invest your money wisely is greater than ever, and this often requires looking beyond the obvious as you must remain vigilant to protect your money. Here are some recommendations that can help you to become a smarter investor by learning to take action to protect and grow your investments. Track your investments […]
How do you define Safety?
The recent developments in our local financial sector have once again resurfaced the issue of risk and safety of our investments. As investors, we frequently neglect to ask the important questions that are needed to assess the safety of our banks, pension savings, investment houses or insurance companies. Assessing the Safety of your bank/investment house […]
Recession investing
If you are approaching retirement and have actively been investing, you have probably been concerned if your portfolio statements show your nest egg decreasing in value due to the downturn in financial markets. As my colleague Dwayne mentioned last week Economists and Analysts are predicting that a recession is likely to occur this year. This […]
“Recession-proofing”
There has been much talk of a US recession or even a global recession occurring in 2023. Economists and analysts are predicting that a recession is highly likely to occur during the year. Some predict a mild recession while others predict a more catastrophic situation. But what is a recession and how should you prepare […]
Wishing for a happier New Year!!!
2022 was a challenging year for international investors from a portfolio valuation perspective as well as for those who needed to or were forced to sell positions during the year. Both stocks and bonds declined appreciably in value as the combination of unprecedented interest rate increases by major global central banks to combat high levels […]
Naughty or nice?
He’s making a list. He’s checking it twice. He’s going to find out who’s naughty or nice… The following investment behaviours or practices will not only land you squarely on Santa’s naughty list but they will also lead to less than optimal performance of your investment portfolio. Naughty investment practices There are many naughty investment […]
Investment Strategies during a High-Inflation Environment
Inflation generally refers to the rate at which prices of goods and services in an economy increase. It affects a country’s economic development both positively and negatively. While excessive inflation leads to economic loss, controlled inflation is necessary for economic growth. All investors should try to understand the impact of inflation on their bond portfolio. […]
The difference between a yield and an interest rate
By far the most frequently asked question we get about bonds is: what is the difference between the yield on the bond and the interest rate on the bond? Today we TRY to demystify this source of universal confusion. The article contains examples for illustration purposes only and statements that are generally true; but to […]
Portfolio reviews and diversification
Last week my colleague Dwayne highlighted the importance of reviewing your portfolio. As he mentioned, a “set it and forget it” approach does not truly allow an investor to maximize their portfolio returns. Ignoring your portfolio and not rebalancing is akin to never servicing your car. Eventually it will break down. This week, I want […]
Review and revision of your portfolio
Gone are the days when an investor could take a “Set it and forget it” approach. Or perhaps those days never really existed, but investors were comfortable with their returns and saw no need for a periodic review of their investments or rebalancing of their portfolios. One would simply invest funds and leave the investment […]
Looking for redemption, call me if you can!
Many bonds are issued today with a call feature which means they can be redeemed or repaid by the issuer prior to their scheduled maturity date. However, the early redemption of a bond is not automatic and highly depends upon the unfolding of events at the issuer level, specifically, and market conditions in general. In […]
Planning for your parents
When thinking about our financial future, we usually think about planning for ourselves- our retirement, our children’s college education, but have you planned for your parents? If they have not properly planned for their future, when they retire or get sick you could find yourself taking care of them as well as yourself. This could […]
Bond Purchases- A Step by Step Guide
Daily I get calls from prospective clients looking for more information on global or international bonds that are recommended or suggested to them. Whether the yields are high or seem low, we patiently explain the details on the bonds and how the process works. If the client is a savvy investor, we address their specific […]
Bond Behaviour
Our discussions on bonds continue; after learning the bond basics, today we examine how bonds behave in an environment of high-interest rates, a relevant topic given the current interest rate environment. Before moving on to how bonds behave in a high-interest rate environment, we should first understand the reasons and conditions that generally create such […]
What NOT to do in a bear market
If you own a unit trust or a mutual fund that invests directly in the bond or stock market, chances are – the value of your investment is down relative to last year. The performance of pooled funds is heavily influenced by the movement in the prices of the assets it holds. As asset prices […]
You can’t pour from an empty cup
You can’t pour from an empty cup or vessel, is a phrase that many of us have heard or used at some point in our lives. While the saying tends to be used in relation to our personal and mental well-being, I think it is pertinent to also include this phrase in our financial lives. […]
Preparing for the storm
Earlier this week, Tropical storm Ian passed through the region and caused much panic and chaos in the islands which were affected by the strong winds and heavy rains. Here in Jamaica the situation was no different. Those who were adequately prepared remained calm in anticipation of the possible destruction that such a turbulent system […]
Three in a row
The U.S. Federal Reserve’s (Fed) policy setting committee boosted its benchmark rate (fed funds rate) by 75 basis points (bps) or 0.75% on Wednesday, September 21st. That was the third consecutive increase of such magnitude, and it brought the target range for the federal funds rate to 3.0% – 3.25%, the highest level since before […]
Is a Promissory Note right for you?
A promissory note, also called a “pro note”, “p note” or simply “note”, is a type of fixed-income debt instrument, similar to a bond, loan or even an IOU, in which one party, known as the issuer, makes a written promise to pay a certain amount of money to a specific person or entity, referred […]
Repos- simple yet useful
Many local financial institutions have discontinued offering repurchase agreements, more popularly known as “repos”. However, repos should not be overlooked. Although simple in nature they are very useful short-term investments and can be a valuable addition to your portfolio. A repurchase agreement can be thought of as a collateralized loan. The lender (investor) provides cash […]
What to do with your Bond Income
Our discussions on bonds continue. After learning the bond basics and making the investment, what should you do with the income? As a refresher, a bond is a debt instrument in which an investor loans money to an entity in return for receiving a fixed or variable interest rate, with interest being paid at regular […]
What global currency movements mean for your next vacation or big-ticket purchase
Your dream European vacation just got cheaper – 12% on a year-to-date basis to be precise (Full disclosure, this figure applies only to investors with US$ holdings). Have you been considering the purchase of Luxury European Made vehicle? Or perhaps the thrill of exploring Patagonia or hiking the Andes is more appealing to you? Well, […]
How to find new investment products
Last week my colleague Dwayne highlighted the importance of opening a new account when one closes. As he mentioned technology and high levels of customer service should help make this a seamless process. The real dilemma that many investors face when their accounts are closed is what should they do with the available funds. Investors […]
When one account closes…
From time-to-time situations may arise where an account that you hold may have to be closed, whether voluntarily or involuntarily. This can occur with either a savings type account or an investment account. From the account holder’s perspective, the account may no longer fit into your investment and saving plans and so you voluntarily close […]
Recession or no Recession, is that really the question?
Ever since the U.S. (the world’s largest economy) contracted in the first quarter of this year, there has been speculation that the global economy could slip back into another recession. The odds were further boosted by the ongoing Russia-Ukraine war, unresolved supply chain issues and aggressive central bank rate hikes in response to alarming inflation […]
The Woes of Retirement
Whenever you think about retirement you probably think of travelling- whether by plane or yacht, or on a cruise to visit exotic locations around the world. You may imagine activities like golfing, fishing, hiking or just laying on beautiful white sand beaches which stretch as far as the eye can see. Retirement is what your […]
Adding bonds to your portfolio
Bonds can create a balancing force within an investment portfolio. If you have the majority of your portfolio invested in stocks, adding bonds can diversify your assets and lower your overall risk. So, how do you go about adding bonds to your portfolio and more importantly, why should you? Investors can buy individual bonds directly […]
Bond Basics II
My previous article, Bond Basics I, covered several bonds-related concepts, including Face Value, Coupon Rate, Callability, Yield-to-Maturity, and Credit Rating. However, there is still a lot more an investor should know to better understand the seemingly complex world of bonds. Today, we review a few more concepts to help you understand the bond market and […]
How to find opportunities: Market recap
Today we provide a market recap for investors who are patiently assessing the financial markets and trying to decide when and what to buy. This information will help direct you to pockets of opportunities and provide context for future market moves. Staying liquid is an important tenet of any investment strategy in the current environment. […]
Finding opportunity
Last week my colleague Dwayne shared with readers the importance of financial agility, especially in volatile markets. An investor may wonder if they should change course and if there are truly opportunities out there when market conditions appear to be declining rapidly? While every investor is different, the general answer is yes there are opportunities. […]
Financial Agility
There is no doubt that financial markets and the world at large, have been experiencing unprecedented times in the past few years. Financial markets have been affected in recent times by a multitude of factors including a global pandemic, war, and rising inflation. Many of us as investors may have been affected at one time […]
Fed Play – “Go Big or Go Home”
On Wednesday June 14th the U.S. central bank (Federal Reserve aka the “Fed”) delivered its biggest rate hike since 1994. The Fed increased its benchmark rate by 75 basis points (bps) or 0.75%. The drastic action by the Fed was however not surprising. Many financial market participants expected the out-sized rate adjustment and in fact encouraged […]
What are negative interest rates?
You may be wondering how an interest rate could be negative. So, let’s take a brief look at “negative interest rates”. Firstly, what are they? As the name suggests, the rate is literally negative, i.e., it is below zero. In essence, this means that it costs you to keep your money at the bank, and […]
Barbells are not just for weightlifters
If you think a barbell is just a tool for building muscles, think again. Barbell also refers to a strategy that bond investors can exercise (pun intended) to protect their portfolios from the effects of interest rates and potentially improve their returns. The barbell strategy, when applied to bond investing, focuses on the maturities of […]
Bond Basics
Rising interest rates have caused bond prices to decrease and bond yields to increase. Consequently, investors are faced with the decision of investing in longer dated bonds or shorter dated bonds which will mature soon and can be reinvested at higher rates. The global bond market may appear complex, but it is driven by risk […]
Trinidad Petroleum Bond and You
Earlier this month, Heritage Petroleum (Formerly known as Trinidad Petroleum Holdings Limited “TPHLTT”) announced it would offer to repurchase its 9.75% 2026 bond from investors at a price of 102.563 on May 12th 2022 (or 107.563 for investors responding and agreeing to the tender by May 10th). This means that in addition to the interest earned […]
Inflation and Your Bonds
Inflation is a word we often hear in the news and during budget speeches. Inflation refers to the sustained increase in prices of goods and services in an economy or the increase in the cost of living over time. Many people may understand the concept and know what inflation is but may not truly grasp how […]
Putin’s plan
A few weeks ago, we looked at the effect of the Russia-Ukraine war (and other factors) on interest rates and market volatility. As the war continues, sanctions have been imposed and governments now have to decide how to move forward. Since then, actions have been taken by various governments to protect their economies and the […]
Will bonds continue to suffer in Q2 amid Fed rate hikes?
Bond prices (like equities) have declined appreciably in 2022 so far in response to sharp increases in interest rates as central banks, particularly the U.S. Federal Reserve Bank (Fed), deploy “artillery” to wage war against inflation which has been exacerbated by the ongoing Russia-Ukraine conflict. Already in the four completed months of 2022, the benchmark […]
Finding the Middle Ground
Last week we discussed the Ostrich and Meerkat Effects. The Ostrich Effect refers to the idea that some investors metaphorically bury their heads in the sand to ignore or avoid negative news while the Meerkat Effect describes investors who display the opposite behavior. When faced with a crisis, such as a market crash, ostrich investors […]
Who are you in a crisis?
Close your eyes and imagine an ostrich. One of two images will most likely come to your mind- either an ostrich running (they are known for their speed after all) or an ostrich with its head buried in the sand. Interestingly when I was doing research for this article, I found out that the idea […]
Red Flags investors must avoid
Red flags are traditionally used to signal danger. There are many red flags waving in front of us in our everyday life that we often ignore. This can be detrimental to our health and wealth such as when we feel unwell physically and ignore the signs of illness (red flags) to our peril, instead ending […]
What to buy when interest rates are rising
Problem description: Higher interest rates have negative implications for many asset classes, not just fixed income assets. Higher interest rates translate to lower equity valuations (and thus less “price appreciation” potential). Higher interest rates also increase the cost of debt for corporations. Higher interest expense = lower profit = potentially lower dividends to shareholders. Mortgage financing […]
Risk on Risk off
With great risk comes great reward is a quote famously attributed to Thomas Jefferson. An investor’s risk tolerance is a very personal thing and their appetite for risk will change over time. 2022 has certainly begun with a bang and investors may be wondering what risks are necessary to achieve favourable rewards. This year investors […]
Interest rates on the rise
This week saw the US Federal reserve increasing interest rates for the first time since 2018. This has been done to try to curb soaring inflation in the US. But what does this mean and how does this affect investors here in Jamaica? Simply put, inflation is the general level of increase in the price […]
“Down the Rabbit Hole”
February 24, 2022 will go down in infamy as the day Russia invaded Ukraine. In response, the West has never been more united in a coordinated effort to isolate and punish Russia for its so called “special military operation” in Ukraine. In a few short days, many countries have transitioned from the decades-long policy of […]
Russia waging war on your investments?
Once you are part of the investment world you will quickly come to realize that investment returns are unpredictable and volatile. This is true at all times- during peace and war, boom and bust, summer and winter. The recent market volatility is not just because of the geopolitical tensions, but because of a combination of […]
Is Timing Everything?
“Time is Money” is a famous phrase attributed to Benjamin Franklin that many of us have heard before. So why is time so important to an investor and is time really money? The simplest answer is yes. The time value of money is a concept that a sum of money is worth more now than […]
Bubbles & busts
In the realm of economics, a bubble refers to a period in which current prices of an asset greatly exceed the fundamental value of the asset. Prices are inflated and purchasers are willing to pay or are paying very high premiums. A bubble can be formed around a single stock or the entire stock market, […]
Keep cash but don’t leave it idle
It may be a good strategy to keep some cash as part of a well-balanced investment portfolio, for planned and unplanned expenses or to take advantage of investment opportunities that may arise, especially in a rising interest rate environment. When market prices go down, investors with cash have the opportunity to sweep up normally expensive […]
To Tender or Not to Tender?
Imagine you have been comfortably holding your bond for several years and you see on the financial news the issuers of your bond have made a tender offer to buy back this bond. What would you do? This may cause instant panic or feelings of uncertainty, especially if you have never experienced this situation before. […]
What to do when your investment matures
Many fixed income investments have a predefined maturity date. When making the investment the date is stated in the contract and known by the investor. There are also some investments which may have embedded clauses to allow the issuer of the investment to repay investors early. This is known as a “call feature”. The details […]
Quantitative tightening – What is it?
In earlier articles I covered the terms bond tapering and quantitative easing (QE for short). In this article I want to talk little about quantitative tightening or QT. QT has garnered a lot of interest from market participants since the U.S. Federal Reserve Bank (Fed) hinted, at its last meeting in December, that interest rate […]
It’s a Jungle out there!
Ever noticed how many animal-related references are used in the finance world? In the past we have written articles about pigs, wolves, bunny markets, and more recently explained a bull versus a bear market. Yet, we still haven’t covered all the animal terms- it’s a real jungle out there! If you watch the news after […]
Bond strategies in a rising interest rate environment
With higher interest rates on the horizon, investors may be hesitant to purchase bonds right now or be worried about erosion in the value of bonds already in their portfolio, since interest rates and bond prices move in opposite directions. However, it is important, now more than ever, for investors to remember that bonds are […]
Are you a chicken counter or the boy who cried wolf?
How often have you heard someone say, “I made so much money in the stock market today”? I personally hear it very often, especially when stock markets are doing so well. When someone says that I always get worried because it is usually not true. Before you crucify me, I am not saying that these […]