Some interesting developments in markets of late. The real yields on long-winded treasuries have broken their downtrend after the US Federal Reserve engaged in subsidising of the banking system for a time. Does this herald a period of rising interest rates? If you are worried about gold investments, result assured that inflationary pressures will keep Ben Bernacke well behind the curve. I suggest these rates will pull back when new inflation numbers are presented. I think the Fed is not likely to raise rates just yet, and I think these yields will fall once again.
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Andrew Sheldon
www.sheldonthinks.com
Investment Strategy
If you are investing for the long term, you still need an investment strategy. Dont be fooled by the rhetoric of fund managers. The reason they advise you to 'buy & hold' is because they dont want to compete with you in sell-offs. Markets and industrial sectors are cyclical, so they demand trading to get the best returns. Fund managers actually cant hope to match the performance of small investors (if you are half good) because they have to manage huge amounts of funds and charge you a fee besides.
MY ADVICE is (i) look at a range of market indices and decide upon what level of correction would give you the justification you need to get in & out of the market. It might be a 5-10% retracement or a break of trend. (ii) Diversify if you dont have an intimate knowledge of the company or management. More than 30% in one company is aggressive.
Some interesting developments in markets of late. The real yields on long-winded treasuries have broken their downtrend after the US Federal Reserve engaged in subsidising of the banking system for a time. Does this herald a period of rising interest rates? If you are worried about gold investments, result assured that inflationary pressures will keep Ben Bernacke well behind the curve. I suggest these rates will pull back when new inflation numbers are presented. I think the Fed is not likely to raise rates just yet, and I think these yields will fall once again.
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