Brewin’ with Nguyen
We all would like a safe investment with high growth and stable income. The problem is…. it doesn’t exist.
If someone is telling you it has all these attributes they are lying. If such an investment did exist, then everyone would buy it bringing the price up until the return would be in line with the risks.
This is because every financial product abides by the risk vs return law. And such each asset class has their place in an investment portfolio to meet specific investment objectives.
Bonds lie on the low risk low growth and stable income scale as it is a defensive asset class. Below is a graph depicting how the risk vs return curve looks like.
For the risk adverse investor that prioritises capital preservation you want to be on the left side of the graph. Get in touch with me so I can help you assess the best way to protect and grow your wealth.
The political headlines out of Europe are for once not from Italy or Greece but from the powerhouse of Germany. The weekend election in Bavaria is causing a political earthquake in Berlin and there are even some talks emerging that Angela Merkel’s coalition government could fall apart. The result in Bavaria is a further example of the political shift going on in Europe and nobody is quite sure yet what it all means or what the alternative will look like.
In addition, we are all waiting with great anticipation on the outcome of the ongoing Brexit discussions. All this, highlights the fragility of the European common markets and will keep the ECB on the sideline, justifying their very cautionary approach, before they start reversing monetary policy.
ABX Weekly 17th October 2018 Market update
A shot across the bow this week as we saw a rise in bond yields and a mild market correction in shares on the back of the US Federal Reserve (Fed) hiking interest rates. The rise in bond yields were subdued due to the flight to safety into bonds but market analysts are concerned this was just a taste of things to come.
De-risk and diversify before the next market crash today
Follow Us @AusBondExchange
Check our ABX’s insights here: ABX weekly 17/10/2018
Australian Bond Exchange Pty. Ltd. (“ABX”) provides both general and specific financial product advice. This document and any information, advice or recommendation has been provided by ABX without taking account of your objectives, financial situation or needs. Because of this, you should before acting on any information, advice or recommendation from ABX consider the appropriateness of the information, advice or recommendation, having regard to your objectives, financial situation and needs. If this document, or any information, advice or recommendation, relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a product disclosure document relating to the product and consider the document before making any decision about whether to acquire the product. ABX, its directors, representatives, employees or related parties may have an interest in any companies or entities, or any financial product issued by companies and entities, and may earn revenue from the sale or purchase of any financial product, referred to in this document or in any information, advice or recommendation. Neither ABX, nor any of its directors, representatives, employees, or agents, make any representation or warranty as to the reliability, accuracy, or completeness, of this document or any information, advice or recommendation. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or any information, advice or recommendation. Any reference to credit ratings of companies, entities or financial products must only be relied upon by a “wholesale client” as that term is defined in the Corporations Act 2001 (Cth). ABX strongly recommends that you seek independent accounting, financial, taxation, and legal advice, tailored to your specific objectives, financial situation or needs, prior to making any investment decision. ABX does not make a market in the securities or products that may be referred to in this document.