Asset classes. Expected return from UBS

In the years ahead, selecting the right asset classes will be crucial.

Cash and Bonds

Source: UBS

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Объективно о трейдинге…

Информацию ниже следует усвоить всем трейдерам, кто приходит на финансовые рынки в жажде быстрой наживы. Тем не менее, на протяжении веков жадность берет верх над здравым смыслом, поставляя на рынки все новых и новых жертв…


“Welcome to the hardest game in the world.

Unfortunately, you’re playing with some of the sharpest, fastest, most intelligent, well informed, stubbornly irrational and in many cases, unethical minds in the world.

You’re up against the computer that can react faster than you.

The trader who has more experience than you.

The fund that has more money than you.

The insider that has more information than you.

The others that will misinform you.

The inner voice that will do it’s best to undo you.

So, leave all your dreams of making quick and easy money, behind.

The first aim is survival. Your absolute first goal is to learn how to stay in the game.

You can only do this by mapping the territory.

By understanding how the enemy thinks and acts.

By having a solid game plan.

And by picking your battles very, very carefully.

Ready to play?”

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The Things Everyone Should Know About Bond Investing

“It seems that everywhere you turn, the press is asking, “When is the Fed going to raise interest rates?” While that may be the question du jour, for long-term investors, the question is irrelevant to the construction of a high-quality bond portfolio.


1. Understand the role bonds play in a portfolio. When it comes to managing a bond portfolio, many investors, especially retirees, are mainly focused on generating income, but investors need to be aware of the risks taken to achieve a set amount of income in today’s low interest rate environment. For example, when interest rates are low (and bond prices are high), the income approach would cause an investor to buy more bonds, extend duration or accept lower credit quality in order to maintain a certain level of income. Likewise, if you think back to the early 1980s, when you could lock in long-term bond rates over 10%, the income approach would cause investors to own fewer bonds — even though the lower prices (higher yields) were a once-in-a-generation buying opportunity.

A better approach is to divorce the cash flow decision from the income decision. To do this, an investor needs to set a rational asset allocation, periodically rebalance to that target, and allow the total return of the entire portfolio to satisfy any income needs as opposed to viewing the interest generated by a bond portfolio as the sole source of income. Once a monthly (or some other frequency) withdrawal rate that meets an investor’s living expenses is determined, some combination of interest, dividends and proceeds from maturities and sales will provide enough cash to meet the withdrawal each month. Read more »


Russia’s emigration: is there a problem?

“For more than a century, Russia has suffered periodic waves of mass emigration. Now it could face yet another one, perhaps leading to the largest brain drain the country has experienced in 20 years. According to Russia’s state statistical agency, 350,000 people emigrated from Russia in 2015 — 10 times more than five years ago. The outflow began in earnest in 2012, driven mostly by political friction in the country, but Russia’s current economic crisis has accelerated the pace.

As highly skilled Russians emigrate, the future of innovation and private business in the country has been called into question. Meanwhile, migrants from mostly Muslim former Soviet states are entering Russia in search of work, altering the ethnic and religious composition of the population and heightening tension in the process.

In nearly every decade of its history, Russia has watched large portions of its population head for foreign shores. Between 1880 and 1914, 2 million Jews fled the Russian Empire, seeking refuge from pogroms. The Russian Revolution then sent roughly 1.4 million refugees fleeing the country, including some of the empire’s brightest minds: Nobel Prize-winning writer Ivan Bunin, author Vladimir Nabokov, helicopter designer Igor Sikorsky and artist Marc Chagall, among others.

It is difficult to get reliable migration statistics for the early Soviet period. All five of the Soviet statistical chiefs between 1926 and 1940 were shot, and under the Soviet government, demographic statistics became more propaganda than science. But generally, emigrants found their way out of the Soviet Union in three major waves over the union’s lifetime. During World War II, 700,000 to 1 million Russians — mostly anti-Communists, Soviet prisoners of war or those dodging the draft — fled the Soviet Union to settle in the West. Decades later, about 2 million Jews emigrated mainly to Israel and the United States, seeing an opportunity when Soviet General Secretary Leonid Brezhnev somewhat relaxed the Kremlin’s monitoring of the Soviet Jewish community. Then, with the loosening of border controls in the 1980s, people began to move across Russia’s border in both directions. Three million ethnic Russians living in the Soviet and Communist bloc outside of the Russian republic returned to Russia. At the same time, leaving the country were 700,000 ethnic Russians, along with 300,000 Soviet Jews — a number that jumped to over 1 million after the bloc’s collapse.

The rise of Russian President Vladimir Putin brought emigration from Russia to a relative crawl. Between 1999 and the mid-2000s, living standards in Russia quadrupled, the country’s economy stabilized, and the overwhelming popularity of Putin’s administration put an end to political turmoil. Russia’s renaissance had begun. As a result, emigration by ethnic Russians was consistently outpaced by the number of immigrants pouring in, particularly from former Soviet states. After peaking in 2000, the number of Russian emigrants dropped from about 146,000 that year to a mere 32,000 in 2009, even in the middle of an economic crisis.


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Мировые экономические новости: июнь 2016

20 июня – 3 июля 2016

“ВЕЛИКОБРИТАНИЯ. В полном несоответствии с результатами опросов до референдума британцы решили выйти из состава ЕС (52% голосов «за», явка 72,2%). За отделение больше голосовали люди старшего поколения, менее образованные и более консервативно настроенные, жители деревень и малых городов. Многие из них начали жалеть о своём выборе уже на следующий день. Петицию о проведении повторного референдума на сайте парламента подписали за 2 дня уже 1,5 млн. человек.

Политические последствия наступили мгновенно. Премьер-министр Кэмерон (выигравший выборы на обещании референдума, но выступавший против Brexit) подал в отставку. Шотландия и Северная Ирландия, вероятно, потребуют референдумов о независимости. В Шотландии 62% проголосовавших хотели остаться в ЕС, в Северной Ирландии – 56%. В последней ситуация особенно деликатная, так как Brexit затруднит перемещение людей и товаров между Ирландией и Северной Ирландией. Правительства стран уже задумались об их объединении.

Экономический эффект для Великобритании будет, как и предсказывали эксперты, негативным. Экономика может потерять 4-8пп ВВП до 2030 года (по оценке правительства). Шок будет частично сглажен ростом конкурентоспособности производства, связанным с ослаблением фунта. Но, учитывая уже закончившуюся де-индустриализацию страны и важность для нее финансового сектора, этот эффект не сможет перевесить шок. К тому же, инвестиции в регион существенно сократятся, по крайней мере, до окончания формальной процедуры выхода. S&P и Moody’s ожидаемо изменили прогноз рейтинга Великобритании на негативный. Впрочем, с учётом текущего рейтинга AAA вряд ли это станет большой проблемой.


БЕЛОРУССИЯ. 1 июля в Белоруссии будет проведена деноминация белорусского рубля. Банкноты образца 2000г заменят на новые в пропорции 10000 к 1. Впервые со времен СССР белорусам понадобятся кошельки с отделением для «мелочи». В обращение вводятся металлические монеты, номинал которых составит: 1, 2, 5, 10, 20 и 50 коп, а также 1 и 2 руб. Помимо сокращения количества нулей изменяется и код белорусской валюты. С 1 июля вместо привычного BYR будет использоваться BYN. До конца 2016г новые и старые деньги будут циркулировать параллельно, а обменять старые купюры можно до 31 декабря 2021 года. Read more »


Is only a small minority of stocks actually driving market gains?

“Quick, before you read this post, ask yourself these questions:

1. What percentage of stocks beat their benchmark index over their lifetime?

2. What percentage of stocks have a negative return over their lifetime?

3. What percentage of stocks lose essentially all of their value?

Not sure? The answers to all three questions are below.


When most people think of the stock market they do so in terms of index results. Popular indexes include the S&P 500 and the Russell 3000. However, most people are not aware of the tremendous differences between winning and losing stocks “beneath the hood” of a diversified index. From 1983 to 2006 over 8,000 stocks (due to turnover and delisting) were at some point members of the Russell 3000. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.


Key findings:

  • 39% of stocks had a negative lifetime total return (2 out of every 5 stocks are money losing investments)
  • 18.5% of stocks lost at least 75% of their value (Nearly 1 out of every 5 stocks is a really bad investment)
  • 64% of stocks underperformed the Russell 3000 during their lifetime (Most stocks can’t keep up with a diversified index)
  • A small minority of stocks significantly outperformed their peers (Capitalism yields a minority of big winners that all have something in common) Read more »

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