Saturday, August 6, 2016

Negative yields are a sign of idiocy in desperation and everyday loss of capital in native currency is already in play

Keep in mind that if you buy securities at a yield of negative 1 percent a year, and equities are yielding 4 percent on average, your insurance cost on the safer securities is roughly 5 percent of the upfront investment.  So on $10 trillion of safe securities, that is an insurance premium of roughly $500 billion -- a relatively small chunk of the $300 or $400 trillion of total global wealth.  In percentage terms it is cheaper than the homeowner’s insurance many of us pay for every day. 
instead of paying 5% to ensure my money is safe from being invested in equities in the first place, here's a radical thought: don't invest in equities.

if your cash currency is dropping at a annualized compounded rate of -5.19% from 1GBP = SGD 3 to presently 1GBP = SGD 1.76 for the past 10 years, and your income growth is not keeping up, here's another thought: haul ass to Singapore/United States.
hint: a lot of europeans are already doing so and the pace picked up recently due to the symptons of stress in the terror attacks. e.g. Nice lorry rolling, Munich mall shootings, Brussels bombing...

US equities are at all time highs. what are you smoking?
and on the other hand, if you can't take risk (loss of capital), switch your currencies.

Buy a property and start a business.

on a personal level, you can do any of the above. for institutions, there is always some place you can park your money. don't be lazy.