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 rise, the return of the fund is boosted. As asset prices decline, the return of the fund is reduced or declines. 

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. As market volatility and soaring inflation has affected our day to day lives it gives us an opportunity to reassess our financial health.

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 could bring. The unprepared were left to scramble trying to ascertain what would be needed to survive during and after the storm.

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 the 2008 financial crisis. In the days leading up to the Fed meeting, the benchmark 10-year U.S. Treasury yield climbed past 3.5%, its highest level since 2011, while the 2-year U.S.

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 to as the noteholders, at a specific time. They have been around for many years and are common financial instruments in many countries, employed principally for short-time financing of companies.

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.

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 intervals. The basic rule of the time value of money states that money loses its value with the passage of time. What you can buy today with a certain amount of money will be a lot more than tomorrow due to rising inflation.

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, all these options are substantially cheaper thanks to the fact that the US dollar has strengthened against most developed and emerging market currencies so far in 2022. Of course, the Jamaican dollar is a notable exception.

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