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Monetary change: fact, forecast, fiction?

April 24, 2014

In this issue of Investorama, we look at the imminent monetary change and what this will mean for interest rates. Meanwhile, the Investment topic section is devoted to convertible bonds. After all, although these have been around for more than 150 years, they're still relatively unknown among investors.

LGT Investorama: economic conditions, outlook and positioning
LGT Investorama: economic conditions, outlook and positioning

Are we on the verge of a sea change or a half-hearted maneuver? The financial community has seldom been so unanimous in its agreement on an imminent trend reversal as it is today: 2014 will be the year of rising interest rates! However, from the monetary policy perspective, the change can be described as half-hearted at best, while its implications for investment policy are less than spectacular.

As in daily life, there is a general tendency to see many more turning points all around us than there actually are. It's not just central banks that should return to the tried-and-tested approach of keeping a steady hand on the tiller, instead of allowing short-term events to distract them into making too many adjustments to their course. For investors, too, having the discipline to follow a long-term strategy will pay off more than reacting frantically to every single change.

 

Profiting from rising stock markets with bonds?

Convertible bonds offer a combination of current income and capital appreciation with restricted downside risk. But although these financial instruments have been around for more than 150 years, investors know little about them.

Our money tale is all about symbiotic relationships, looking at examples in nature – and also in business. What does 1961 have to do with industrial symbiosis? Read "The number" in this issue of Investorama to find out more.

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