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Education

$5.5t USD in negative yielding government bonds!!

JP Morgan estimates that over $5.5t (yes, trillion) of investor funds are currently in negative yielding government bonds. To put that into plain interest, if you purchased $10,000 (Euros to be correct) worth of German 5 year bonds currently at -0.308%, after 5 years, your $10,000 would be worth $9,846.94. To clarify, this doesn’t mean that the quarterly interest payments are negative, it means that the amount an investor is prepared to pay for the bonds is so expensive, that when it matures; combining the capital being repaid (the face value) and any income generated works out that the ‘total return’ or […]

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Responsible Investing

Why investors should be concerned about a dam bursting in Brazil The Responsible Investment Association of Australia state “Responsible investors all understand that companies or assets won’t thrive whilst ignoring environmental issues (pollution, climate change, water and other resources scarcity), social issues (local communities, employees, health and safety), corporate governance issues (prudent management, business ethics, strong boards, appropriate executive pay) or ethical issues.” On November 5th, 2015 a dam co-owned by BHP burst, killing 13, injuring hundreds and impacting thousands. Brazil’s government has subsequently filed a law suit against BHP and Vale for $5.2b USD to compensate those affected. Investing ethically is […]

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Differences between Financial Advisers

The Financial Adviser Act 2008 introduced an authorisation process to control who can and can’t provide financial advice. This has also caused some confusion, particularly for investors who are seeking financial advice. There are 3 categories AFA – Authorised Financial Adviser RFA – Registered Financial Adviser QFEA – Qualifying Financial Entity Adviser Authorised Financial Advisers (AFA) AFAs are registered on the Financial Services Provider Register and belong to a Disputes Resolution Scheme. They also go through a more rigorous approval process by the Financial Markets Authority and have higher competency standards. Authorised Financial Advisers can provide personalised advice on complex […]

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Bonds 101

  Bonds are typically a word most investors have heard of, but it is an investment that is not fully understood. Shares however, are generally well understood, investors know they can fluctuate in value, they sometimes pay a dividend, they can be risky. Bonds are seen as ‘safer’ investment options, but that is not always the case. Bonds versus Term Deposits Comparing a bond to a term deposit from a major bank; a term deposit is an agreement from the investor to lend a specified amount of money to the bank, with an agreed interest rate, with agreed repayment terms. Throughout […]

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