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|Posté le: Lun 27 Nov - 04:02 (2017) Sujet du message: You really have to learn to love the simplicity of Income In
So the recent bad news (all of it) is really good news for investors and yes, just as higher interest rates are actually better than lower ones to a certain extent, so should lower stock prices be welcomed with more smiles than tears.
Why is this not easy? It's not easy because financial professionals and pseudo-professionals alike won't let it be. Dealing with both events at the same time can make your bottom (line) a bit uncomfortable, but only until you recognize that smaller numbers are better for buying and that their larger cousins are best appreciated with sell orders..
You really have to learn to love the simplicity of Income Investing.. All fixed income investments (with the exception of open end Mutual Funds) are created equally and switching just doesn't work. at least not immediately. Your portfolio market value should never be a surprise and, more importantly, it should never be looked at as something to be particularly concerned about.com/product/guide-bearing. (3) A change in the Market Value of your Fixed Income holdings will rarely have a negative impact on the regular recurring income that you receive and, after all, you bought these securities for the income in the first place. and that is true in both Equity and Income Securities Markets.gdbr-bearing.gdbr-bearing.html">Guide Bearing set back for a struggling economy.. Look at the income number on your statement and go "hmmmm" when you see Linear Bearing no meaningful change in either direction. This is an investment nirvana, people! Don't let those guys in the pinstripes get you confused.com/product/cultch-bearing. Only those speculators who haven't taken their rally profits are unhappy with corrections. Interest rate sensitivity is a given (and, by the way, interest rate expectations themselves are sensitive to inflation expectations). For example, you had to be living in a cave somewhere and smoking something really special to think that your Interest Rate Sensitive (or Investment Grade equity) portfolio would be up in market value from June of 2007 through mid-January of 2008.
Income Investors must learn to hold these truths to be self evident: (1) More interest on your invested dollars is just plain better for you than less income on your invested dollars, and the amount you have allocated to Income Investing should never change because of market factors.
During all types of corrections, some investment professionals will play to your fears, encouraging you to cut your losses, and to switch to something else. generally something that is cycling upwards. After all, that is the venue for: erratic price fluctuations caused by an endless supply of social, economic, and political variables; the standard Wall Street misinformation, corporate malfeasance, self- serving financial gurus, and product sales persons; a myriad of popular and market moving speculations from IPOs to Option and Margin strategies; thousands of media talk shows and their financial markets' experts. We actually have an investment condition that approaches certainty... well, that's just another example of irresponsible investor counter-education from our much too respected enemies in the financial institutions. But not recognizing that slowly rising interest rates is as much a boon for both fixed and variable Income Investors as it could possibly be a temporary Cultch Bearing a positive, compounding effect on portfolio yields and, at the same time, plants the seeds for future capital gains as interest rates recede. Don't panic, don't switch, and don't cry in your beer. (4) Buying fixed income securities in a rising interest rate environment has Angle Contact Ball Bearing mall of some kind, is the bottom-line/market-value brainwashing that has taken the calm, secure, and smiley-faced world of Income Investing and turned it upside down. Admittedly, very few Equity investors get to that special place, shouting "Eureka!" as they first realize that corrections in the "Shock" Market are every bit as lovable as rallies.