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 strong relationships with clients.
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. In the context of today's financial markets, this principle remains as relevant as ever.
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 debt load. When this happens, bondholders receive what are known as "call proceeds." Reinvesting these proceeds wisely can be essential to maintaining your investment portfolio's performance.
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 that produced the ultimate return? Unfortunately, investing on a whim may not present the most balanced portfolio for an investor.
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 make informed decisions is paramount to achieving your financial goals.
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. Federal Reserve (Fed) will likely need to maintain interest rates at current high levels for an extended period to get inflation back to its 2% target.
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.
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.
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 knowledge on the asset class and evaluate replacement options.