The price volatility of government debt worldwide is worrisome – among other things because it might result in failures of bond auctions that could harm global markets. Even scarier is the widespread use of derivatives to hedge the risk of this debt, meaning the fallout could be still worse should this insurance fail to pay off.
Rising rates and economic weakness is a recipe for market slumps. The likelihood, though, is that the pain will be short-lived, as it has been in the recent past.
The two biggest asset classes, stocks and bonds, won’t deliver much for investors. So says one of the sharpest financial minds of our time.
Investors worry about Federal Reserve Bank policy and rising interest rates. The question has been “how much, how soon?” Not “if?” Odds are, though, that rates won’t rise very much in the near term.
What can a rock ’n’ roll classic teach us about investing? Plenty, if the turbulence of rising interest rates hits Wall Street. Here are possible effects on some market sectors and suggestions for your best countermoves, especially in terms of bonds.
Momentum is an extremely powerful investment strategy. Although it struggles in a choppy market like the kind we saw last year, momentum investing has its charms. As with any investment strategy, diversification is the key. But not just any diversification.
Complacency sets in when you’re satisfied and free of worry; complacent well describes many equity investors today. Over the last three years, the market saw little volatility and a ceaseless rise in value. So what’s the danger?
When you assess how your investments perform, comparing your returns with popular benchmarks is hardly meaningful. Inappropriate comparisons can cause you more harm than good if they tempt you to bail on an otherwise solid approach.
It’s official: The Federal Reserve plans to hike short-term interest rates, perhaps as early as the body’s June meeting. The stock market, addicted to cheap money, goes into periodic withdrawal at this prospect. But fear not. As a number of smart advisors are telling their clients, this development should be good. Mostly.
You measure your portfolio’s performance by its rate of return. What you probably don’t realize is there are actually different measurements. Understanding when to use which helps you make better financial decisions.