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People fear they’ve got too much cash in their bank accounts
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The comfortable, if small, returns of high-yield savings accounts are looking less palatable as volatile assets take off. There's no guarantee that yields for these accounts will rebound any time soon. In a survey by Bankrate 28% of Americans said the stock market was their top choice for long-term investments. From March 23 to July 1, the S&P 500 rallied 40%.
Gold’s record rally fuelled by unlikely buyers
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Gold’s surge to an all-time high is winning over a wider fan base of pension funds, insurance companies and private wealth specialists. When bonds offered heftier yields, professional investors had little use for gold, which offers no income and costs money to keep in storage. But now some on Wall Street are questioning the wisdom of owning bonds.
Impact investing boom gives funding jolt to an asset manager
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Impact investing is now all of a sudden having its moment. We must be very mindful though that this is done correctly to actually have impact as opposed to just moving capital around. With such a plethora of investing styles and funds on offer, not to mention the buzzwords, it is important that the impact market scales with integrity.
Gold price tops $1,900 on longest winning streak since 2011
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The commodity, used by investors as a store of value in times of stress, has rallied strongly as other safe assets have become less attractive. The inflation-adjusted yields available on benchmark government bonds have slumped well below zero. Silver hit a seven-year high above $23 an ounce.
US fund managers seek to safeguard portfolios against inflation
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Demand for inflation-protected bonds has intensified in the US, as investors look to shield portfolios against the risk of a spike in inflation as economic activity rebounds from the coronavirus crisis. While few investors fear an immediate resurgence in inflation, what has become the “concern du jour” is what happens when a recovery takes hold.
Investors pull green levers to reshape energy sector
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Various investment houses are now offering mutual funds that specialise in clean energy or the energy transition. Investors should also think about the types of asset class they are picking, if they want to achieve change. Some believe bonds are a more effective tool at listed companies, as they are often issued to supply finance for more specific purposes.
Swiss hedge fund to offer clients gold shield against inflation
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EDL Capital offers investments denominated in gold and silver to protect clients against the risk that record coronavirus stimulus spending will push down currency values. Gold has drawn the attention of the world’s most-prominent investors, who are sounding the alarm about the threat that inflation, driven by central banks, could reduce currency values.
A contingent convertible bond that wants to save the world
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Banco Bilbao Vizcaya sold a 1 billion euros perpetual note on Tuesday, and designated it as a green bond. CoCo bonds pay more interest than other debt. In exchange investors bear losses, if the bank fails. Transparency on how the funding has supported environmentally friendly causes will be critical, if the bank is to avoid the greenwashing tag.
Inflation is about to make a comeback in a big way
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For the first time in 40 years, we may now have to face up to the corrosive power of inflation. The numbers attached to coronavirus bailouts are clearly astronomical. Attempting to protect portfolios could mean buying not-so-liquid inflation-linked securities and floating-rate bonds; and pursuing value and momentum strategies in equities; and purchasing gold.
Inflation will come: here are five ways to combat it
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It’s a good idea to have your inflation-hedging positions ready for what is likely to come in the next few years. Annual budget deficits have become so enormous that the only way to finance them is for the Federal Reserve Bank to increase the money supply. The downside? We will all pay the price in the form of massive and sustained inflation.
Why this safe-haven may be far riskier than you think
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When investors get scared, they rush for safe-haven assets like the 10-year Treasury Note. The problem is that an imminent surge in inflation will drive bond yields higher and so push the price of securities down. Rising expectations of inflation will lead bond investors to demand higher yields to tempt them into buying the fixed-income securities.
Germany’s green power finance is becoming unaffordable
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The German program is buckling under the weight of surging costs and needs an urgent fix. The green surcharge will cost consumers about €26.2 billion this year. At a cost of some €11 billion to the budget, the government will cut the green fee by 2 cents/kWh next year. In other words, power consumers’ burdens will be relieved by taxpayers.
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