MoneyController

MoneyController

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Hedge funds continue to invest in crypto

  • 35
  • 0
  • Cryptocurrencies
Posted on 01.07.2022

The collapse in the value of cryptocurrencies is undermining the confidence that had been placed in this asset class by many investors. Bitcoin has fallen below the $20,000 mark and the largest altcoin circulating on the market, Ethereum, looks like it could fall below the $1,000 mark. Cryptocurrencies as speculative assets At the moment, cryptocurrencies behave not as stores of value (some have argued this), but as highly speculative assets. It is therefore not all that surprising to read in a report by the consulting firm PwC (and also reported on FONDS Professionell) that hedge funds, on the contrary, are continuing to bet on cryptoassets. Hedge funds, in fact, are types of speculative funds, characterised by different regulation (allowing for riskier investments) than other funds and excluding the participation of small savers/investors. Hedge funds and crypto-assets The document is entitled 'Global Crypto Hedge Fund Report 2022' and in addition to PwC, the Alternative ...

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Flexible solutions against volatility and inflation

  • 36
  • 0
  • Investments
Posted on 30.06.2022

The crisis the markets are going through is caused by the intertwining of several factors. Nordea Senior Macro Strategist Sébastien Galy spoke of a flexible strategy and specific products to cope with the situation. His analysis was also reported by "investrend.ch" magazine. Uncertainty, inflation and interest rates The European economy is facing many difficulties. The first one is of course the Russian war in Ukraine, which generates uncertainty, but is also reflected in rising commodity and energy prices. Then there is the problem of supply chains, which have been put in difficulty by China's pandemic policies (and Beijing is still burdened by the unresolved problem of the property market crisis). All this aggravates the problem of inflation, against which even the major European central banks (European Central Bank, Swiss National Bank and Bank of England) have taken action, through a policy of raising interest rates. Betting on moderate growth and a selecti ...

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Funds: Outflows from bonds

  • 44
  • 0
  • Mutual funds
Posted on 29.06.2022

Morningstar's report on European long-term investment funds shows a rather disappointing result in May. Let's take a closer look at some of the data and considerations in Valerio Baselli's article. European bond funds at a loss In May, the net outflow of long-term bond funds reached EUR 16.5 billion. To find a similarly negative result one has to go back to March 2020, when the pandemic broke out. In particular, as Baselli writes, the most notable outflows were recorded by renminbi funds exposed to Chinese bonds, and products investing in sterling government bonds and short-term euro bonds. In contrast, government funds linked to US dollar and euro fixed income recorded positive results. Some results from other asset classes The contraction in fixed income investments, marking the fifth consecutive month in May, was only partly offset by the inflow of EUR 2.9 billion into equity funds and a more modest inflow into balanced funds. Commodity-related funds also contracted. ...

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How do I choose the right financial advisor for me?

  • 51
  • 0
  • Financial advisor
Posted on 28.06.2022

When it comes to savings and investments, the choice of a financial advisor is an important decision. But how do you choose the most suitable advisor for your needs? Rachel Layne (MoneyWatch), among others, writes about this in an article in 'CBS News'. Starting with one's own financial needs The starting point is precisely the needs of an individual or a family. When opting for financial advice, it is good to be clear what one's investment and/or savings goals are. These goals can be short-, medium- or long-term; they can be aimed either at buying an asset, such as a car or a house, or at setting aside sufficient capital for a holiday or to supplement one's income during retirement. Clarifying savings and/or investment goals Once one's savings and/or investment goals have been clarified, the next step is to choose the most suitable type of professional (who may be an independent professional or linked to an advisory firm or a bank). The financial plann ...

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Are bond ETFs a risk?

Posted on 27.06.2022

With rising interest rates, bond investments are back in the news. On the one hand, as Jennifer Fizia writes in the magazine 'extraETF', this is leading to a loss of their value. On the other hand, interest rates are making the yields of some bonds attractive again. Bonds: what are they? As Fizia also explains, bonds differ from shares primarily in the nature of the returns they offer, i.e. fixed. Except in the case of inflation-indexed bonds - which can change yield based on inflation rates - bond investors are paid a constant yield until the bond matures. Bonds are debt securities that a company, bank or government entity uses to finance itself. The risks associated with bonds Their riskiness is closely linked to their liquidity: the more liquid they are, the better their rating. If an investment portfolio consists mostly of junk bonds, i.e. securities with low liquidity, the risk will remain high. The exact opposite happens with triple-A bonds. The higher security, on av ...

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Trends that will change financial advice

  • 47
  • 0
  • Financial advice
Posted on 24.06.2022

It is interesting and perhaps equally useful to ask what will increasingly characterise financial advice in the future. On the online platform of the magazine 'Financial Advisor', an article by Jack Sharry (chairman of MMI's Digital Advice Community) appeared that deals with precisely this. Financial advice and pensions The first of the five trends identified by Sharry is the growing need for pension advice. The baby-boomer generation is entering retirement age, bringing with it assets that are incomparable to the assets of previous generations. But millennials are also aware of the importance of investing for retirement and more and more of them will realise the urgency of taking out a supplementary pension or a form of supplementary provision. As Sharry writes, this will lead to a growth in demand for hyper-personalised retirement advice. Demand for holistic financial advice will grow Investors will move away from an investment idea linked to the momentary performance ...

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Financial advice: a strategy against volatility is needed

  • 21
  • 0
  • Investments
Posted on 23.06.2022

In this bearish and highly volatile phase, financial advisors have a twofold problem: on the one hand, they have to try, if possible, to limit the damage caused by market fluctuations; on the other hand, they have to reassure their clients so that they do not panic. What is needed, therefore, is an expendable strategy for dealing with these difficulties, a task that is, after all, proper to professional financial advice. Lorie Konish writes about this, reporting on some of the views that appeared at the CNBC Financial Advisor Summit.  A long-term perspective The first component of a strategy against volatility is a long-term perspective, as Omar Aguilar, CEO and CIO of Schwab Asset Management, puts it. A forward-looking strategic outlook allows one to plan investments strategically and, at the same time, update the portfolio, seizing opportunities (where possible). Diversification is decisive The second component of this strategy that is needed to deal with volatility is dive ...

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Why manage ETFs more actively?

Posted on 23.06.2022

ETFs are increasingly successful products due to their relative simplicity (they generally replicate a market index) and low management costs. In the current uncertain situation, however, there may be opportunities for more active ETF management, a contradiction in terms only apparent. Sarah O'Brien writes about this on CNBC. Actively managed ETFs to overcome bear market Many stock market indices have entered a bearish phase since the beginning of the year. Many investors who bet on ETFs feel powerless in the face of this situation, which is also characterised (as many now know) by high inflation and rising interest rates. This is why a number of managers - including Holly Framsted, head of ETFs at Capital Group - argued at the Financial Advisor Summit for an active strategy with respect to ETFs. The benefits of passive management and those of active management Fidelity Investments estimates that the ETF market is worth six trillion dollars. In addition to low management costs ...

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Interest rates, recession and market

  • 68
  • 0
  • Financial markets/economy
Posted on 21.06.2022

Between the danger of recession and an inflation that is almost out of control, many central banks have made a clear choice: better to run the risk of entering a recession than to stop curbing inflation. At the moment, the Federal Reserve is the central bank that has gone the furthest in curbing inflation, but almost all western central banks seem to be going down the same path. Alexandra Semenova writes about the Fed and the backlash in the markets on Yahoo!Finance. The Fed's rate hike and the markets' reaction On Wednesday, the decision to raise interest rates by 75 basis points hit the major US stock market indices: -5.8% the S&P 500, -5% the Dow Jones Industrial Average, -1.7% the Nasdaq. For a few moments, Bitcoin fell below $18,000, but the entire cryptocurrency market is in crisis. There are two ways of looking at US monetary policy. According to Chris Zaccarelli, CIO of Independent Advisor Alliance, the Fed is fighting the biggest risk, namely inflation, with fina ...

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Why pay attention to some dividend-paying stocks

  • 38
  • 0
  • Investments
Posted on 20.06.2022

The first half of 2022 has undoubtedly been characterised by a predominantly bear market: from the major American indices to the European stock exchanges, the minus sign has so far been the dominant one. The biggest losers seem to have been those asset classes that were, on the contrary, characterised by the most surprising rises until 2021, such as tech stocks and cryptocurrencies. In such a situation, resorting to dividend-paying stocks might seem to be the best solution to continue to provide the portfolio with some profitability. However, Markus Zschaber, founder of VMZ Vermögensverwaltungsgesellschaft, believes that investing in dividend-paying stocks may not necessarily be the best choice. His opinion was also echoed by the magazine FONDS Professionell. Dividends become attractive again during market corrections For Zschaber, when choosing a stock to invest in, focusing on dividends is not necessarily the best choice. Certainly, dividends can become attractive during ...

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Rates: western central banks do not stop

  • 45
  • 0
  • Gov. bonds and Spread
Posted on 20.06.2022

The latest to usher in a more restrictive monetary policy was the Swiss National Bank (SNB), which raised its key rate by half a percentage point on Thursday. The rate rose from -0.75% to -0.25%. By now, it is clear that all major western central banks have only one goal in front of them: to curb inflation. The SNB follows the example of the Federal Reserve The increase in interest rates (see also "What are interest rates?") by the SNB could be followed by further interventions in order to bring the price increase to the stability level, defined as not more than 2%. In May, inflation in Switzerland had reached 2.9%. This is still a far cry from the inflation rate in the US, which was +8.6% in May. The SNB's decision, moreover, follows on the heels of the Federal Reserve's decision to raise rates to a level not seen since 1994: an increase of 75 basis points, bringing the key rate levels to 1.5% and 1.75%. By the end of 2022 these rises could reach 3%. Rate hikes by ...

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Gold, a disappointing safe haven asset?

  • 57
  • 0
  • Stable value
Posted on 16.06.2022

Since the beginning of the year, many investment classes are under pressure due to a variety of economic, financial and geopolitical circumstances. The crisis is affecting sectors that were booming at least until the end of 2021. One only has to think of stock indices, but even more so of the world of cryptocurrencies (the value of which seems to be in free fall).  Many investors are therefore wondering how they can withstand this difficult situation, perhaps by betting on safe haven assets such as gold. The truth is that even gold, at the moment, does not seem to offer the best guarantees of protection or, at least, appear as a counter-trend asset, capable of appreciating. Antje Erhard wrote about this in "extraETF". The paradoxical situation of the gold price The current market crisis prompts many investors to look for safe haven assets, but gold does not seem to be the best candidate to fulfil this task. After peaking at over USD 2,000 an ounce at the beginning of ...

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