Why should you have a concentrated portfolio versus a diversified one?

The following is my answer to a Quora question: “Why should you have a concentrated portfolio versus a diversified one?” A concentrated portfolio consists of a few specific equities and derivatives for the sole purpose of surpassing the benchmark. It maximises potential gain at the expense of very high risk. It works when you makeContinue reading “Why should you have a concentrated portfolio versus a diversified one?”

Should new investors have bonds in their portfolio?

The following is my answer to a Quora question: “Should new investors, in their 20s, have bonds in their portfolio?” It is a good practice to have bonds in your portfolio. Debt instruments lower the overall risk of your portfolio, and stabilise it in the event that equities drop. Equities have the potential to earnContinue reading “Should new investors have bonds in their portfolio?”

What is the Difference between a Bond Mutual Fund versus a Bond ETF?

The following is my answer to a Quora question: “What is the difference between a bond mutual fund versus a bond ETF, and which is a better investment?” A bond fund, also known as a debt fund, is simply a fund that invests in bonds, or other debt securities. Bond ETFs are simply exchange-traded fundsContinue reading “What is the Difference between a Bond Mutual Fund versus a Bond ETF?”

Your Guide to ILPs and a peak into “New ILPs”

The Simple Sum recently posted an article, “Your Guide to ILPs: What You’re Paying for When You Buy Investment-Linked Insurance Policies”. It is a good read, especially for policyholders who may not be aware of the investment allocation or how the policy actually works. It should be noted though that the article is based onContinue reading “Your Guide to ILPs and a peak into “New ILPs””

Will Agribusiness Bonds do well amidst pandemic?

Climate change will cause a profound impact on our food security. Agricultural areas are at risk from the effects of temperature changes. Changes in ocean currents and temperatures will affect fishing and fisheries. Desertification is a risk for many areas. This means the price of putting food on the table will rise, even as qualityContinue reading “Will Agribusiness Bonds do well amidst pandemic?”

“Which one is better: a monthly contribution to income protection, or investing the same money every month?”

The following is my answer to a Quora question: “Which one is better: a monthly contribution to income protection, or investing the same money every month?” That depends entirely on your intent, and your need. In the beginning, you need some sort of liability protection, and coverage for loss of income. Pure investment does notContinue reading ““Which one is better: a monthly contribution to income protection, or investing the same money every month?””

“What is better: a stock or a mutual fund?”

The following is my answer to a Quora question: “What is better: a stock or mutual fund?” When you buy stock, each stock is the purchase of shares in individual companies. The advantage is that gains are more easily realised. In effect, a gain in share price may give you a potential profit may timesContinue reading ““What is better: a stock or a mutual fund?””

“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 advantages of investing in a money market mutual fund over a savings account?”

The following is my answer to a Quora question: “What are the advantages of investing in a money market mutual fund over a savings account?” A savings account has a low risk, and that corresponds to a lower return. A money market fund is also low risk, but it is still of a higher riskContinue reading ““What are the advantages of investing in a money market mutual fund over a savings account?””

“Where or how should I invest $500 monthly, at low-risk?”

The following is my answer to a Quora question: “Where or how should I invest $500 monthly, at low-risk?” Even at low risk, you cannot go for the safest since the base objective is to still to have a higher return over the investment period than the rate of inflation. If you cannot match theContinue reading ““Where or how should I invest $500 monthly, at low-risk?””

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