A barbell strategy avoids intermediate-term bonds and equally invests in very short term and very long term durations. The barbell strategy divides a sum, for instance $10,000, equally among bonds with short durations and bonds with long durations. If the interest rates will go up sharply, the proceeds from your short-duration bonds will be reinvested into new bonds with much higher coupons. If the interest rates drop sharply, the proceeds from the bonds with shorter durations will be reinvested at a much lower coupon, but on the other hand, your long-duration bonds will rise sharply in price. Continue reading...
Unpack a week of dynamic financial shifts from June 10-14! Discover how geopolitical events and Fed decisions stirred the markets, influencing stocks, bonds, and cryptocurrencies. Get insights into sector-specific winners and losers across global markets Continue reading...
Interest, often seen as the cost of borrowing, is a cornerstone in the financial world. But what truly lies behind this percentage? From the ancient perceptions of interest to its modern-day complexities, this guide delves deep into the essence of borrowing costs. Discover the dynamic interplay between simple and compound interest, and how they shape financial decisions. Learn about the profound impact of interest rates on the broader economy, from invigorating growth to aligning with fiscal goals. Whether you're borrowing for a home, investing for the future, or simply curious about the numbers on your bank statement, understanding interest is crucial. As we navigate an ever-evolving financial landscape, interest remains at the heart of economic interactions. Equip yourself with the knowledge to make informed decisions in a world where every percentage point matters. Continue reading...