When investors buy bonds, they sit across the table from a sophisticated adversary. The fixed income market does not attract the most gifted analysts, as the money is in the equity market. This is ironic, because the job is more complex. Corporate bond investors need to understand all the issues affecting equity valuation, for this […]
Standard and Poor’s, the leading US research analysis and index provider, published the SPIVA study comparing the performance of actively managed and passive index funds. A stock market index fund reflects a weighted average of several securities, is intended to represent the stock market and track changes over time. The results of the study showed […]
The Financial Conduct Authority (FCA), the UK regulator, is finally throwing a lifeline to investors over unfair costs being charged for different classes of shares in the same fund. Investment managers and intermediaries will no longer be able to recommend or move investors into the most expensive shares classes. They will be obligated to move […]
A gold mine is a hole in the ground with a liar standing over it. Mark Twain From sceptics like Mark Twain and successful investors like Warren Buffet, to gold bugs who are ‘evangelical’ in their belief in the yellow metal, gold is either loved – or hated. In reality, with the exception of gold […]
There are two questions perplexing all investors today: Is the bull market in US equities in a bubble, up some 48% since the crisis of 2009? And is the 30-year bond market, where yields on US Treasuries have fallen from 16% in 1981 to 1.14% in 2012 (prompting inversely a rise in stocks) also in […]
The classic definition of ‘money’ has three features: (1) a medium of exchange; (2) a store of value; and (3) a unit of account. ‘Sound money’ is simply a medium of exchange, backed by an asset with an intrinsic value and not liable to sudden appreciation or depreciation. Money is not a risk asset. It […]
Speaking realistically, are we likely to live in a cashless society in the future, or is this wishful thinking? If Sweden is anything to go by, then we will. There, some 85 to 90 per cent of all payment transactions are made electronically. The Swedes do not like using cash, but across Europe attitudes vary […]
You may be familiar with the term “Bitcoin”, without understanding its use or the overall concept of “blockchain” or “cryptocurrencies”. A “blockchain” is a digitised, decentralised public ledger. It includes all “cryptocurrency” transactions – namely, all transactions done in digital or virtual currencies (that use cryptography to make them secure). Currently, blockchain technology is used […]
The oil that lubricates the wheels of investment management. Consider this: Inhabitants of a small community before the wheel was invented carried heavy goods on their backs. Then came the wheel and, from then on, their goods could be efficiently moved on a cart, and not on their backs. As with all economic productivity, cause […]
It’s not return on my money that I’m interested in, it’s return of my money. Mark Twain, 1835-1910 The arrival of the first mutual fund into the marketplace in March of 1924 revolutionised the way we invest money in the stock market, although mutual funds became prolific only years later, when adopted by institutions in […]
