News
Investors wonder if the 60/40 portfolio has a future
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With stocks and government bonds at historically high valuations, savers are being forced to seek out alternatives. Investment strategists have suggested private equity, real estate, infrastructure, inflation-linked bonds and dividend-paying equities. Others have suggested that investors switch their exposure from sovereign debt to high-quality corporate bonds.
Green power needs to account for all its costs
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How to manage intermittency is one of the challenges of weather-dependent low-carbon electricity. It is not simply about paying for back-up for when nature refuses to play ball. It generates additional system costs. A report by the UK’s business and energy department shows how they change the economics of different low-carbon energy sources.
Top pension funds told: drop focus on short-term returns
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Denmark’s pension industry has long stood out as one of the world’s best. But in recent years, funds have responded to ultra-low interest rates by relying on risky, less liquid assets to squeeze out extra returns. Now, most offer market-based products, which give funds more investment flexibility, while pushing the risk of market swings on to savers.
Investors pounce on Germany’s first green bond sale
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German Treasury attracted more than €33bn of bids for up to €6bn of 10-year debt. Issuance of green bonds has exploded in recent years, as fund managers hunt for assets linked to ESG criteria. Germany’s plan to become carbon neutral by 2050 could cost as much as an extra 1.1 per cent to 2.8 per cent of gross domestic product a year.
CEFs: Investors are returning to an established fund type
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Forbes recently surveyed 500 individual investors to learn how they are reacting in the aftermath of the Covid-19 pandemic. The survey found that most surveyed investors (56%) are focused on investing for retirement security and income. CEFs are investment products that own a basket of securities – from equities to bonds to commodities.
Mini-reactors are gaining traction in the push for greener grids
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Companies around the world are developing a new generation of reactors. One model can even fit into a single-family house. These power plants are designed to make nuclear energy affordable. There is a growing awareness that closing coal or natural gas plants could lead to electricity shortfalls as seen in California’s rolling blackouts earlier this month.
ING is considering negative interest for new customers
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New customers may soon have to pay, when they deposit the money. At the same time, the bank makes them an offer. As an alternative to bank accounts with low interest rates, ING Germany is making a new offer for investing in stocks and funds. "We want to make it as easy as possible for our customers to get started with securities savings".
It takes 7 nuclear plants to power our bitcoin mining
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Bitcoin-related power consumption has reached record highs this year. A study from the Cambridge Center for Alternative Finance released on Monday estimates that the global bitcoin mining industry uses 7.46 GW, equivalent to around 63.32 TWh of energy per year. The study also notes that miners are paying around $0.03 to $0.05 per kWh this year.
US stock market hits record 77% overvalued
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Despite the worst economic backdrop since the Great Depression, stocks have held up reasonably well. Very few investment categories offer a good alternative. Cash is paying next to nothing and bond yields are at historic lows. You could invest in gold and silver and some high-flying tech stocks but buying these after such an increase could prove risky.
Californians face dark, hot summer as green energy is sapped
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The state plans rolling blackouts to deal with a heatwave that has pushed the power grid to the limit. California has vastly expanded the capacity of solar power. The drawbacks have been evident in the past week as temperatures soared daily above 100°F (38°C) and air-conditioner use leapt in the late afternoon and early evening, just as the sun set.
Beware of the hidden costs in commodity investing
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Investors are turning to the commodities markets as a store of wealth. ETF funds own futures contracts, not physical commodities and trading futures comes with a “roll cost.” Investors do not want to take physical delivery, so they roll them from one contract to the next before they expire. Oil price of -$37 showed how extreme the roll cost can get.
Negative real yields are driving the everything rally
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Concerns start to grow among analysts over the longer-term inflation outlook. A collapse in real yields on bonds is driving record rallies in assets from gold to technology stocks. The yield on 10-year inflation-linked US government bonds sank below -1%. But ever greater levels of Fed stimulus are required just to prevent risky assets from falling.
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