New research from the IMF suggests that forcing investors to search for yield in riskier assets by targeting extremely low-interest rates is amplifying shocks in markets. Chris Giles reports for the Financial Times: Persistently low interest rates are encouraging investors to take dangerous risks in a quest to maintain their financial returns, the IMF said on Wednesday, raising concerns that even the current lacklustre performance of the global economy may not be sustainable. Policymakers should urgently seek to extend banking regulations introduced after the financial crisis to other … [Read more...]
Are Investors Ready to Demand Higher Yields?
Worries about the future returns in bonds have heightened the possibility investors will begin demanding higher yields. Daniel Kruger reports at The Wall Street Journal: Recession worries and interest-rate cuts from the Fed have boosted bonds of all kinds this year. But worries that the gains can’t go on forever have led some investors to unusual corners of the market. Mr. Doty said he has added taxable bonds sold by states and local governments, which offer more attractive yields and stronger credit quality than most company debt or the tax-exempt bonds typically sold by … [Read more...]
Understanding Dividend Dates
If you are new to dividend investing, divided dates may still be a bit of a puzzle to you. There are many different dividend dates to remember including the declaration date, the ex-dividend date, the date of record, and the payment date. What are they? We’ll explain all of the important dividend dates and what they mean for you. What is the Dividend Declaration Date? The calendar of dividend dates is actually made up of a number of different events, and the first is the declaration date, which happens weeks or months before the dividend itself is actually paid. On the declaration date, … [Read more...]
Do Wealthy Americans Pay Their Fair Share in Taxes?
The 1% of Americans with the highest incomes pay an average federal tax rate of 33%. Meanwhile, the bottom 20% of households pay an average of 2%. In fact, once transfer payments are factored in, the bottom 20% of households pay -70% in taxes, earning $49 for ever $1 they pay in federal taxation. Bloomberg's Michael R. Strain reports: Contrary to the narrative that seems to be forming on the political left, the U.S. federal tax code is very progressive. According to the nonpartisan Congressional Budget Office, the lowest-income 20% of households have an average federal tax rate of about 2%. … [Read more...]
Are Central Banks about to Burn the Dollar?
For decades the gold standard reserve currency of the world has been the American dollar, but now as Eva Szalay and Colby Smith report for the Financial Times, that preeminent role may be at risk. They write: The US dollar has long towered over global markets and finance. But cracks are starting to appear in the edifice. The greenback’s pre-eminent role in official funds and international trade is formidable and unlikely to fade quickly. But the latest data from the IMF on central banks’ reserves show a subtle shift away from the dollar that analysts say could signal a rethink on the … [Read more...]
Can China Avoid Isolation, Decline and Revolt?
Bret Stephens, writing at The New York Times, isn't sure that China can avoid "full-blown nightmare of international isolation, economic decline, and domestic revolt." With the Chinese economy's growth slowing down to levels not seen in nearly 30 years, and capital fleeing the country, Stephens wonders if China has hit a "middle-income trap." He writes: It turns out to be a trap few countries escape: Of 101 countries defined as “middle income” in 1960, only 13 rose to high-income by 2008, according to a World Bank report. And some of these countries, like Greece, are prone to slip … [Read more...]
The Power of a Compound Interest Table
Compound interest was described as the greatest mathematical discovery of all time by Albert Einstein. Compound interest “Tis the stone that will turn all of your lead into gold,” according to Benjamin Franklin. The late great Richard Russell explained compound interest as the royal road to riches. Below I'll explain this powerful investment tool and show you how to read a compound interest table. Compound interest is the heart and soul of investing. Investors lacking a solid grounding in compounding are more likely to suffer from a wandering eye. They can be inclined to favor Hail Mary … [Read more...]
How Much More Are Stocks Really Worth when Rates Are Low?
Gary Shilling warns against overpaying for stocks simply because rates are low. In piece for Bloomberg, he explains that investors "tend to be overly enthusiastic at business cycle peaks when corporate cash is plentiful and purchase their shares at high prices." He writes: U.S. stocks are expensive by historical standards, and the bulls try to justify current valuations by pointing to extremely low levels of interest rates. There are a number of reasons why that’s no reason to pay sky-high prices relative to profits. With companies preparing to start reporting results for the third … [Read more...]
Patience Turns Out to Have a Silver Lining
Over the last year, silver investors who had the patience to hold have found themselves better off than those investing in a S&P 500 index. … [Read more...]
Caution: Returns in the Rearview May Be Closer than They Appear
Many investor presentations and fund brochures focus on three year returns. But without a bear market since 2009, how can investors see how a fund handles volatile markets using three year returns? Past returns can never predict the future, but an investor can learn something about the resilience of a fund manger's strategy by examining how the fund performed in past times of turbulence. John Coumarianos suggests using 15 year returns for fund analysis today, so investors can see an entire cycle included. The future ain’t what it used to be, Yogi Berra said. But now, when it comes to … [Read more...]
- « Previous Page
- 1
- 2
- 3
- 4
- 5
- …
- 134
- Next Page »