Fixed Deposits And Equities In The Barbell Strategy


If the all the risk-reward stories of the portfolio theory mutualfundwale don’t grab you, here’s an alternative strategy for the independent investor : The Barbell Strategy.

Here’s what it involves :

Building a portfolio that recalls a barbell. That is : On one side, there’s a basket of extremely safe investments. On the other side, there’s a basket of extremely speculative plays. The weight is distributed between two extremes, with almost nothing in the middle. Read more of this post

RBI and its Repo Rates

wealthymattersEvery time the RBI announces an interest rate change do you start wondering how it will affect the prices of your shares,how much you can get on your fixed deposits,whether it is a good time to buy bonds or bond funds,how much your EMIs will cost etc.?Then reading the following article from today’s ET is a must.It is written by Madan Sabnavis, chief economist of CARE Ratings.

Lag Effect of Rate Rise Worries Apex Bank 

Every time the Reserve Bank of India (RBI) increases interest rates, a plethora of voices are heard. Industry laments that their profits get squeezed affecting growth. Bankers aver that their interest margins come under pressure and non-performing assets (NPAs) get Read more of this post

Investing in NCDs

wealthymatters.comA non-convertible debenture is a fixed income instrument where the issuer agrees to pay a fixed rate of interest to the investor. An NCD cannot be converted into equity of the issuing company unlike convertible debentures.NCDs are good substitutes for fixed deposits,especially company deposits.

Debentures are of two types secured and unsecured. The debentures with a “charge” on the assets of the issuer are called secured debentures. So in case of a default by the issuer, the secured debenture holders are paid by selling the assets against which the charge was created. Secured NCDs offer lower interest than their unsecured counterparts. Read more of this post

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