What is a hedge feature in a fund?

When investing in unit trusts or investment-linked policies (ILP), you would find in the list of fund choices fund names with the term “SGD-H” or “Hedged SGD”. What does this mean? A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsettingContinue reading “What is a hedge feature in a fund?”

“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?””

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 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?”

Preparing for a Post-Pandemic Economy – 2nd Half 2020 Market Outlook

According to World Meter tracking of coronavirus, we have passed 5 million cases of the infection, with over 350,000 death. Even then, we know these numbers are massively under-reported since many countries do not have the means to test much of their population. When we consider the expected deaths of select countries against actual deaths,Continue reading “Preparing for a Post-Pandemic Economy – 2nd Half 2020 Market Outlook”

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