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.
European Desk
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.
ABX Colour:
De-risk and diversify before the next market crash today
Speak to an advisor on +61 2 8076 9343 or visit our website https://www.bondexchange.com.au/ now!
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Check our ABX’s insights here: ABX weekly 17/10/2018
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