When the interest rate environment changes, investors face unique challenges, especially when it comes to replacing a maturing bond. For instance, many local investors hold the NROCC (National Road Operation and Construction Company Ltd.) 9.375% bond maturing in November. They received 50% of the principal in 2023, when yields and coupons were at record highs, allowing reinvestment at similar or better rates for the medium to long term. However, just a year later, these investors will struggle to find comparable yields.
If you find yourself unable to replace a bond with one offering a similar or better return, it may be time to change...
We are now officially in the last quarter of the year, and some would say time flies when you are having fun. Although, many fixed income investors would probably beg to differ and say the last two years were not fun due to market volatility. How quickly we forget the opportunities the volatility presented!
The Federal Reserve hiked its benchmark interest rate 11 times between March 2022 and July 2023, held them steady at a historic high for more than a year and finally announced rate cuts in September of this year. As we approach the end of 2024, now would be an ideal time for investors to begin to review their portfolios and reassess the...
As the landscape of fixed-income investments continues to change, the upcoming maturity of NROCC (National Road Operation and Construction Company Ltd.) 9.375% bonds presents both opportunities and challenges for investors as they find themselves at a crossroads concerning their next steps. With the maturity date approaching in November 2024, it is crucial for bondholders to devise effective strategies for reinvestment. This juncture provides an excellent opportunity for investors to reassess their strategies, consider market dynamics, and make informed decisions regarding reinvestment.
Investors in the NROCC 9.375% bond will remember that...
In a decisive move aimed at preserving economic expansion, the U.S. Federal Reserve (Fed) recently cut its policy rate by a larger-than-expected 0.5% or 50 basis points (bps), bringing the federal funds target range down to 4.75%-5.0% from 5.25%-5.5%. This marks the first reduction in four years, signalling the beginning of a new easing cycle. The rate cut is an important step designed to gradually remove restrictive monetary conditions and ultimately reach a neutral rate of approximately 2.9%. The rate adjustment is widely viewed as a proactive approach, following the most aggressive tightening campaign in four decades, and it is likely to...
When life changes, money inevitably changes too. Major life events often prompt reevaluating financial priorities, strategies, and habits. Understanding the intersection of life transitions and financial adjustments is crucial for maintaining financial health and achieving long-term goals. In our recent client survey, many of our respondents said that they chose to invest with Sterling Asset Management after a major life-changing event. We have also discovered that people view financial planning as a simple process and are not prepared for these changes. In reality, there is no cookie-cutter solution to the number of financial challenges that...
The Planning and setting of goals are a very important part of our daily lives. This should also be applied to our finances to accomplish financial freedom. Having a goal that is realistic as well as steps that are measurable, will allow for easy tracking of our progress.
Determine your...
Apr 11, 2021
2020 saw extreme volatility in the investment market. Recent statistics suggest a significant increase in trading activity in the market from young investors who are taking advantage of the investment opportunities available.
What to look for as a young investor
As a young investor...
Apr 04, 2021
Simple can be considered as boring, but sometimes simple is exactly what we need. I recently met with a prospective investor (virtually of course) who had gotten badly burned in the stock market. After licking his wounds, he decided he was ready to invest again, but after his bad...
Mar 28, 2021
According to FSC data, the total assets of the private pension plan industry as of September 30, 2020 stood at J$639.29 billion. 37% of this J$639.29 billion is invested in “pooled investment arrangements” (I.e., mutual funds or unit trusts). This is the single largest concentration in any...
Mar 21, 2021
All great relationships begin with trust and understanding. This applies in both personal and professional situations. Choosing a financial advisor for investment guidance should also adhere to this principle. The investor/advisor relationship should be one where the investor trusts the...
Mar 14, 2021
You have probably heard the phrase that interest rates and bond prices move in opposite directions. That is, as interest rates rise bond prices are expected to fall and vice versa. However, since the start of 2021 we have observed a steady rise in international rates, yet corporate bond...
Mar 07, 2021
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