SMSF Investment StrategiesSharing Simple Strategies for Self Managed Super Funds
How do you measure credit risk – does a AAA rating equal low risk?
The markets are tanking today once again, this time due to fear that the US may default on their loans if their debt ceiling is not raised by Aug 2nd. The debt ceiling is like a credit limit and Kingsley and I find it quite amusing that credit rating agencies are threatening to downgrade the [...]
Is it time to buy bonds?
It is good to see a growing interest in bonds among Australian investors. I noticed my post on Term deposits vs treasury bonds is frequently among the top ten most popular posts on this blog, so I thought it might be time to write another post about bonds. While the stock market and the RBA [...]
Does your SMSF need more fixed income?
The default allocation for super funds in Australia is the “balanced portfolio” which typically has 60 per cent or more allocated to shares. However, this is not necessarily the norm for pension funds in other countries. According to the Organisation for Economic Co-operation and Development (OECD), Australian investors have the highest portfolio allocation to shares [...]
Will the bond rally last?
Looking at the chart above, it quite obvious that bonds have outperformed stocks in 2010. The S&P 500 (red line) is down 2 percent while TLT, the ETF for long-term bonds (blue line) has rallied 17 percent since the start of this year. The spectacular bond rally in recent weeks has become the hottest topic [...]
Term deposits vs treasury bonds
I would like to apologize for the lack of new posts in the past few weeks as we were away for two weeks and last week I have been busy with getting the household back in order and helping the newest member of our family (a homestay student from China) settle in. I have also [...]
Bank for International Settlement report does not bode well for world economy
I normally don’t write blog posts on the weekends but I feel I should get this post out sooner rather than later because some of the information may be time critical. Warning: this is long blog post with few pictures. A friend of mine recently asked me why I was still bearish about the stock [...]
Rising bond yields – any cause for concern?
On Monday 5 April 2010, the 10 year US treasury bond yields crossed 4% for the first time since June 2009 (see chart of $TNX below). Bulls believe this is a good sign. Bond yields typically rise and bond prices fall when the economy improves because investors will pull money out of safe, government-backed bonds [...]
My outlook for 2010
I wish I can be a little bit more enthusiastic when I exchange “Happy New Year” wishes with family and friends. I just cannot do it because deep inside, I think there will be more pain to come in 2010 for investors. When I look at the events that have taken place in the past [...]
Case for Inflation
There was widespread fear of inflation when we saw central banks all over the world increase the printing of their respective currencies in response to the liquidity crisis in 2007-08. With more money floating around, wouldn’t it be worth less? That’s what we normally see when there is excess supply of any commodity. As we [...]
How safe are government bonds?
I watched The Ascent of Money last night and what I learned from Niall Ferguson (aka British econ-god) about the bond market was pretty scary. Government bonds are supposed to be among the safest investments which was why they skyrocketed in late 2008 when there was panic in the stock market. Niall went back into [...]
