Interest Rates

  • 27 Nov
    This Is Why International Diversification Is So Important

    This Is Why International Diversification Is So Important

    • The 30% international revenue exposure the S&P 500 offers isn’t enough.
    • It’s possible to add significant returns and lower your risk when investing internationally.
    • A look at economic health and fundamentals will show where it’s best to invest now.



    Introduction

    An often overlooked part of investing and portfolio strategies are currencies.

    The easiest way to look at it is to say that it all evens out over time and that the only thing important is to be diversified. By owning the S&P 500 or companies that have global revenues, we could say that a portfolio is well diversified. More →

  • 21 Nov
    Worried About The Current Financial Environment? Here’s What You Need To Know

    Worried About The Current Financial Environment? Here’s What You Need To Know

    • Today, we’ll discuss the sustainability of developed financial systems as they are now.
    • We’ll also take a look at the much talked about Chinese slowdown.
    • I’ll finish with a take on gold and what could happen.



    Introduction

    In today’s article, I’ll discuss the financial environment we are living in.

    It’s very important to see the fundamental trends and forces surrounding what looks like a stable and strong financial system. The fundamental forces are crucial because in the long term, those forces eventually prevail and have a huge impact on all financial assets. More →

  • 17 Nov
    Here’s How To Be A Successful Real Estate Investor

    Here’s How To Be A Successful Real Estate Investor

    • To break the myths surrounding investment properties, I’ve done a simple financial overview of an investment in real estate.
    • There’s a big difference between real estate investing and speculating that many don’t get.
    • I find direct real estate investments an essential part of a well-diversified personal portfolio.



    Introduction

    I know interest rates are expected to go up which should lower real estate prices, but to start things today, I want to first distinguish between two very important things when investing in real estate. Do you want to be a speculator or a real estate investor?

    The difference between the two is that a speculator is primarily concerned with whether their investment, or rather speculation, will increase in price in the next year or two or so. More →

  • 13 Nov
    Inflation Points To A Recession On The Horizon – Here’s What You Need To Know

    Inflation Points To A Recession On The Horizon – Here’s What You Need To Know

    • Everybody expected high inflation after 2009, but it didn’t happen. There are specific reasons for that.
    • However, higher food and energy prices are pushing inflation higher. The low unemployment rate should help too.
    • Today, I’ll discuss how to best position yourself for an inflationary environment.



    Introduction

    There is one little bell always ringing in my mind: inflation, inflation, inflation.

    From all my analysis, inflation is something that could really shock the financial world. In today’s article, I’ll first show the current inflation levels for the most important economies, and then will dig deeper into what can happen in the next few years and how could that affect your portfolio. More →

  • 08 Nov
    Is Everything Now Too Big To Fail?

    Is Everything Now Too Big To Fail?

    • Today, we’ll discuss how the “too big to fail” concept has evolved since it was first used back in 1984.
    • The U.S. stock market to pension funds relation shows that even the stock market is simply too big to fail.
    • In Europe, the situation is even worse. Everything there is too big to fail, from countries to corporations to junk bonds.



    Introduction

    “Too big to fail” is a concept that you probably recognize from the 2009 financial crisis when many corporations, particularly financial institutions, were considered too big to fail due to the negative impact their demise would have on the whole economic system.

    In order to prevent massive negative effects on the economy, and also to prevent a 1930s depression-style situation, governments intervened and bailed out the distressed assets. More →

  • 18 Oct
    On The 30th Anniversary Of 1987’s Black Monday, Today’s Market Looks Eerily Similar. Should You Prepare For A Crash?

    On The 30th Anniversary Of 1987’s Black Monday, Today’s Market Looks Eerily Similar. Should You Prepare For A Crash?

    • The data indicates that the likelihood of a crash similar to October 1987 is the same today as it was then.
    • This doesn’t mean the stock market will crash tomorrow.
    • It only means that you should know yourself extremely well and relate your investments to your risk reward appetite. Only this can prevent you from the biggest mistake investors usually make, i.e. sell at the bottom of a bear market in total panic and capitulation.



    Introduction

    On Monday October 19, 1987, the stock market crashed a whopping 22.6% in one day. Is it possible that the same could happen tomorrow? Well, let’s compare the current market and to the one back then. More →

  • 03 Oct
    Good Debt Explained: Why You May Want To Take Out A Loan To Invest

    Good Debt Explained: Why You May Want To Take Out A Loan To Invest



    • Investing isn’t only about choosing the right stocks, it’s also about proper capital allocation.
    • Taking on leverage to invest can be smart but it can also be incredibly dumb.
    • From an historical perspective, it could be a very smart thing to be ready to refinance your home and invest in stocks.

    Introduction

    Buffett and Munger praise themselves for never taking out loans for Berkshire and one of the most famous Buffett quotes is:

    “If you’re smart you don’t need debt, if you are not smart, you better stay far from debt.”

    However, this is another half-truth that he tells the world. More →

  • 26 Sep
    The Best Strategies For Investing Late In The Economic Cycle

    The Best Strategies For Investing Late In The Economic Cycle

    • What has to be done in the late part of the economic cycle isn’t a secret. I’ll describe the how and what.
    • However, as always in investing, the question is why we aren’t doing the rational thing.
    • I’ll ask you a question that will help you answer how much and whether you should rebalance.

    Introduction

    Yesterday, we discussed how the economy is in the late part of the economic cycle and everything is leading toward a recession.

    No one knows exactly when the next recession will start or what the trigger will be. So the only thing to do is to be prepared. More →

  • 25 Sep
    These 5 Charts Say A Recession Is Near

    These 5 Charts Say A Recession Is Near

    • A recession usually takes everyone by surprise.
    • The current environment is ripe for a recession, we just need a trigger.
    • The stock market will react as investors react, which is usually completely irrationally. Be prepared.

    Introduction

    The latest FED meeting didn’t give us much news.

    The monetary policy remains accommodative with the interest rate between 1% and 1.25%, while the balance sheet normalization program is purely cosmetic with minimum monthly asset sales.

    We shouldn’t expect anything else from the FED as their objective is to maintain full employment and stability. As long as there isn’t significant inflation, the low interest rates help lower the unemployment rate. More →

  • 11 Sep
    Out Of This World Debt Levels Will Damn Future Generations

    Out Of This World Debt Levels Will Damn Future Generations

    • Debt levels are the key driver of economic growth in developed countries. So keep an eye on debt.
    • The velocity of money, household debt, car loans and sales aren’t telling a good story.
    • Globally, the situation isn’t much better. However, there are a few exceptions.

    Introduction

    In today’s article, I’ll analyze the current global debt environment.

    Debt is an economic factor that is unwatched as long as things are going well but as soon at things turn south, everyone will be screaming about a debt crisis and the end of the financial world as we know it.

    Given this, it’s extremely important to know what is going on, how sustainable the current debt levels are, what the impact of debt on the economy is, how to position your portfolio, and perhaps even how to take advantage of potential black swans arising from future debt instabilities. More →

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