“Should you add international bonds to your portfolio?”

The following is my answer to a Quora question: “Should you add international bonds to your portfolio?” That really depends. Bonds are used to balance out a portfolio, diversify it and spread risk. When it comes to international bonds, particularly long-term bonds, you have to consider currency and political risk. You can mitigate the latterContinue reading ““Should you add international bonds to your portfolio?””

Best hedge against inflation?

The following is my answer to a Quora question: “Which of the following is best hedge against inflation? Land, investment, real estate, precious metals, or a mutual fund invested heavily in large capital stock market?” The best hedge against inflation is property and REITS. The price of homes and property rise with inflation because theirContinue reading “Best hedge against inflation?”

“Do high yield bonds have a high default rate during a recession?”

The following is my answer to a Quora question: “Do high yield bonds have a high default rate during a recession?” Yes. These bonds have a lower credit rating, meaning they are not investment grade bonds. These bonds are not rated corporate papers, or sovereign bonds. Their underlying issuer either has a weak financial position,Continue reading ““Do high yield bonds have a high default rate during a recession?””

“What are the factors to consider before you invest, especially in long-term investments?”

Key takeaways: Know your risk tolerance How much liquidity do you need? When do you need it? How adventurous are you in terms of asset classes? (Risk profile and preference) What kind of returns would you like to aim for? The following is my answer to a Quora question: “What are the factors to considerContinue reading ““What are the factors to consider before you invest, especially in long-term investments?””

“I still need growth on my investment for retirement. Should I avoid bonds?”

The following is my answer to a Quora question: “I still need growth on my investments for retirement. Should I avoid bonds?” That really depends. As you age, and seek growth, you may give greater weightage to equity instead of debt instruments in your portfolio. This should have the involvement of your financial planner toContinue reading ““I still need growth on my investment for retirement. Should I avoid bonds?””

Understanding Whole life insurance

When buying personal life insurance, you’d be introduced to Term life insurance, Whole life insurance, Endowment/savings plans, as well as Investment-linked policies. Each product type has its purpose, advantages and disadvantages. So what is Whole life insurance? Whole life insurance provides coverage for the life of the insured. In addition to paying a death benefit,Continue reading “Understanding Whole life insurance”

Investing in a volatile market

There is quite a bit of literature that the market is inherently volatile, punctuated by moments of seeming predictability. However, when viewed from a macro perspective spanning years, the market actually has predictable broad trends. That does not mean this volatility is inherently bad. In fact, these periods of volatility should be viewed as opportunities.Continue reading “Investing in a volatile market”

What are the biggest lessons you have learned in the insurance industry?

The following is my answer to a Quora question: “What are the biggest lessons you have learned in the insurance industry?” I have learned, over the years, that it is not just about the policies you buy, but how you structure them. I have learned that the wealthy and the masses buy the same policies,Continue reading “What are the biggest lessons you have learned in the insurance industry?”

What is the difference between stocks and bonds?

Here I’ll briefly summarised from The difference between stocks and bonds explained. If you choose to invest in a company, there are two routes available to you: Equity (also known as stocks or shares) Debt (also known as bonds) Shares are: issued by firms priced daily listed on a stock exchange Bonds are: effectively loans,Continue reading “What is the difference between stocks and bonds?”

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