Yesterday I was going through some of the Indian newspapers and surprised to see some articles on Indian debt market, which is a very rare scenario where the Indian market is dominated by equities. May be it was more a tax saving investment as the equity market where more volatile and IPOs were flopped.
Whereas the developed world debt market dominates where the bond market, has experiences gains and losses in response to cyclical interest-rate, It’s like business cycle during which an economy expands, contracts and recovers could be termed as market cycle.
Before getting back to the Indian bond market let’s try to see the key components of Fixed Income securities, it’s the Credit quality, yield, and maturities are key components of fixed-income securities.
Continue reading “Fixed Income Investments in Indian Market”
Is doing MBA a good option? I think the answer is yes. Two things have to happen. You should go to a college which has good faculty, and attracts good students. So if you are good enough to get into an IIM A who is to even question “should you go and do your MBA?” The answer is obvious, is it not?
For the not so good / great student the decision is far more difficult to make. Should an ordinary student get into a “d” grade MBA? Again the answer seems to be yes. No, not because they will learn too many things, but because it is almost impossible to get any job with just one basic degree.
Continue reading “MBA degree and expectations – Back to School”
Recently sharing and discussing on the economic growth and the debt market yield spread impact recalled me some work I did in the past and its worth sharing,
The abstract was based on the evidence that yield spread can serve as a leading indicator of economic activity.It’s important to understand few basic concepts before moving forward:
YIELD SPREAD: The difference between yield of long-term debt and short-term debt instrument is known as yield spread. Higher the difference between instruments greater will be the yield spread.
For example, if the 05-year Treasury bond is at 3% and the 20-year Treasury bond is at 4%, the yield spread between the two debt instruments is 1% (4% – 3%). Continue reading “Economic Growth and Yield Spreads on Debt paper – Back to School”
Life is uncertain and volatility could be best understood by one’s life, sometimes you are on peak sometimes low. Loves, hatred, emotions, excitements, are the various factors that define the volatility of life.
Moving down to markets Volatility is the inherent behaviour of the markets that’s the reason trader makes and loses money.
The markets are volatile so does the life. It’s important to curb the volatility and see the things from the long-term horizon. The high tides do not last forever so does the calm sea-shore.
The nastiest thing I’ve ever told anyone (a finance fellow angry with me): “When you have absolute intellectual and more disrespect for someone, the only real compliment you can possible get from his in making him angry”
Continue reading “Love, Life, Market and Volatility”
First off, I have no idea what is the going to happen on Monday when the market opens. The market may open ugly. Some sort of corrective action in the market should not come as a huge shock.
Every valid investment strategy goes through periods of under-performance (relative), or draw-downs (absolute). The question is how you deal with it. One key characteristic of frustrated investors is that they jump from strategy to strategy. The first sign of weakness forces these weak hands to jump ship at just the wrong time. In short, following a strategy is easier said than done.
Ben Carlson at A Wealth of Common Sense also notes how our fear of losses, or loss aversion, affects our ability to invest successfully. He writes:
Crashes, corrections, draw-downs, losses, system resets or whatever you want to call them are a feature of the financial markets, not a sign that they are broken. These things have to happen every once in a while for the system to function Continue reading “Bear Market and the Valentine’s Day”