“If you don’t know who you are, the stock market is an expensive place to find out.” These words, spoken in 1723 by Adam Smith, philosopher and economist, are a timely reminder that asset prices can fall much faster than they can rise. Apart from March 2020, many investment advisors have not experienced a severe […]
As I write, we have been subjected to weeks of living under what many jovially call ‘house arrest’. The pandemic has affected most, if not all communities to varying degrees. In some countries, governments are slowly relaxing restrictions intended to stop the spread of the virus. But the uncertainty remains. How long before people can […]
In March 1933, at what turned out to be the peak of the Great Depression, President Franklin Roosevelt gave the famous rallying cry to America that “the only thing we have to fear is fear itself”. Today fear has again gripped investors, and we have witnessed viciously volatile panic-selling, as traders and algorithms ply their […]
After purchasing a residential home many investors allocate investment capital to real estate in varying degrees, relative to their overall total net worth. Return on capital comes from rental income and capital appreciation. This places real estate, in terms of risk and return, between higher equity risk and the lower risk of debt. The real […]
What image do we conjure up when we think of Gold? Elegance, beauty, wealth, risk, insurance, or just another shiny metal? But do we think of Gold as money? Money must be a store of value, a medium of exchange and a unit of account. The function of money in our financial system allows us […]
Hard on the heels of the ill-fated UK equity mutual fund managed by Neil Woodford, a real estate fund from the giant UK fund group MG has also faced problems as investors rushed for the exit fearing to redeem shares. Last week, fund managers at Standard Life Aberdeen were also under pressure to provide cash […]
It is a tenet of modern portfolio theory to allocate capital in a balanced portfolio to low-risk fixed-interest securities (bonds) to protect against exposure to more risky growth assets like equities. Some suggest as a rule of thumb to allocate capital to bonds in line with your age. The rationale for this is that the […]
Conventional investment wisdom and modern portfolio theory both hold that fixed-interest securities (bonds) are safer than equities (stocks). Most advisors will recommend to increase exposure to bonds with the investors age and to reduce risk. Careful study of the bond and equity markets shows that this conventional wisdom is not as absolute as the professional […]
In July and August many traders and money managers will swap the stress of the office and staring into a Bloomberg terminal for relaxing on a beach staring across a glittering azul blue sea. Today’s stock market is a ‘frenetic’ trading machine lubricated and fuelled by a 24-hour entertainment cycle masquerading as news. Most will […]
Quantum computing and communication are steadily approaching. Discoveries regarding the science of quantum exploration are being announced on a weekly basis. Quantum technology will have a profound effect globally and will become a great economic driver within ten to fifteen years. For those not paying attention to cybersecurity and financial sectors, their standard technologies and […]
