Johann Griener am 27th June 2017 Foto: Shutterstock.com
Shares (equities) and equity funds – the same or not?
Only a small minority of Austrians invest directly or indirectly (via equity funds) in shares. Is it the fear of losses or the lack of knowledge about this asset class that make investors shy away from it? In this blog entry, I would like to give you an overview of the features of shares and equity funds.
Johann Griener am 18th May 2017 (c) Andre/Sutton/EXPA/picturedesk.com
Have you ever been to a Californian beach? If you have, you may have noticed the hoards of “searching”, elderly people. They would usually be holding a metal rod that beeps, looking for valuables that no-one else has found. And sometimes somebody finds a lost golden watch on the beach. But most of the time the things that turn up are only worthless beer caps.
Johann Griener am 10th May 2017
Football has two strategies. Some prefer focusing on the defensive so as not to concede a goal – i.e. they try to maintain the status quo. Other teams favour the offensive and actively engage in a fight for victory – i.e. they take risks. The strategies on the bond markets are similar. Credit-safe government bonds are preferably used to protect one’s wealth, whereas risky corporate bonds are chosen to produce surplus gains.
Johann Griener am 05th May 2017 (c) iStock
The interest rates, or coupons, that bonds pay differ due to a variety of parameters. If bond A pays a higher interest rate than bond B, this premium is referred to as spread.
Johann Griener am 28th April 2017 (c) Fotolia
Investing for the long or the short term? This is the question bond investors ask. In this blog, we will have a look at German government bonds with a remaining time to maturity of two years (2Y; short) and ten years (10Y; long). More specifically, we are interested in the yield differential between the long- and the short-term interest rates. The technical term here is the “slope of the yield curve”.
Johann Griener am 21st April 2017 (c) iStock
USA, the land of unlimited possibilities, the Grand Canyon, and the Big Mac. Here, everything is bigger, better, and higher. But is this also true for interest rates?
Johann Griener am 18th April 2017 (c) Andre/Sutton/EXPA/picturedesk.com
Have you ever been to the Monte Carlo F! Grand Prix? If so, you may have witnessed the problem of turning into a curve too late. The race car hits the crasher barrier faster than the driver can react, and a lot of money has to be thrown at the repair job.
Johann Griener am 26th June 2015 Source: iStock
After the recent, rather substantial corrections on the bond markets many investors were wondering:
“Can or should I still invest in bonds or bond funds in view of possibly rising interest rates?”
Let’s first have a look at the bonds with the highest quality within the Eurozone, i.e. German government bonds. Where have the prices of these bonds gone most recently?
In our example, we have chosen a 10Y German government bond.