Joaquín González
What is carry in fixed income?
When we buy a bond that receives a positive coupon regularly and hold it in the portfolio, we see how, over time and even without changes in the bond's price, the portfolio's value creases. This increase is the result of coupons that the bond pays into the account regularly. This increase is called carry from the investment.
Medium-term value of US investment-grade corporate bonds
As a consequence of the global economic slowdown deriving from the COVID-19 outbreak, the main central banks have set their rates back to 0% or negative; and they are promising to leave them at this level in the coming years to support the sustainable recovery of economic growth.
Investment in fixed income against Coronavirus
The worldwide spread of the COVID-19 virus (coronavirus) in recent weeks has led to strong movements in the fixed-income markets. The possible impact of the new virus on the world economy (its precise dimensions are still unknown) and a marked drop in oil prices (caused by the announced increase in production by Saudi Arabia) have pushed investors to take refuge in developed government bonds instead of high-yield corporate bonds; the latter are more sensitive to the economic cycle and registered price drops of around 10% in the last two weeks.
Economic situation after the first months of 2020
The markets ended January with corrections affecting risk assets, despite optimism over the signing of an initial trade agreement between USA and China, improved growth prospects and central banks committing to accommodative monetary policy.
Consequences for investors of monetary policies
After the Great Recession (2008-2009) until now, the main central banks have established ultra-expansionary monetary policies to combat the extreme de-inflationary pressures resulting from excessive economic indebtedness , the fall in labor force growth (demography) and technological progress.
How to invest in dollar fixed-income today, with an eye to the future
On this occasion we would like to analyze the possibility of investing, with an eye to the future, to take advantage of forthcoming opportunities in dollar fixed-income.
Change of trend in the price of silver
Although the price of silver may not change its trend, there could at least be an upturn that may drive the price up from the current 16 dollars an ounce to 25 dollars per ounce within a year.
The Federal Reserve facing the loss of economic dynamism
Preliminary US activity indicators point to this loss of economic dynamism in the U.S. occurring in the second half of the year.
How can investors avoid financial repression in euros?
The European Central Bank ruled out raising official rates during 2019, a phenomenon is known as financial repression
Monetary normalisation in the US and its effects
At the end of 2015, the Federal Reserve began the process of removing the extraordinary monetary policy accommodation that it had introduced to help stimulate the economy in the wake of the 2008 financial crisis (the "Great Recession"). However, the Fed's monetary normalisation could see this situation gradually change.
Are gold mining stocks an opportunity?
Historically the performance of gold mining share prices following periods in which the price to earnings paid by the American stock exchange was, statistically speaking, very high, has been excellent and a opportunity as we are going to analyse below.
Impact of official rates on long-term treasury bonds
Investors usually believe that buying long-term US treasury bonds during a period of official rate hikes by the Federal Reserve is an unsuitable alternative. However, this supposition may not be completely true. Financial education with BBVA in Switzerland.
Solvency against risk of non-payment
U.S. treasury bonds act as safe-haven assets in circumstances such as deflationary crises, economic recession or shocks in financial markets. This is due to the fact that, at times such as these, investors in fixed income often reduce their investments in corporate bonds of low credit quality and, as such, high risk of non-payment. Instead, they prefer the maximum solvency of U.S. treasury bonds.
How to invest in an economic debt environment
At present, most economies, both developed and also emerging market, are reporting excessive debt levels compared to the past. The amount of debt in the US economy, which in turn sets the pace of the world economy, stands at almost four time the wealth this country produces (measured by it gross domestic product).
The effects of monetary policy on the Eurozone
The appearance of European Central Bank President Mario Draghi on Thursday 20 July last, when he was expected to give details of a possible turnaround in the central bank’s current monetary policy, eventually had little repercussion.
