A few people emailed to ask how I calculated the yield on the RBS Royal Bond.
Hey presto! This post will tell you everything you need to know about calculating bond yields, whether for government or corporate bonds.
My weekly commentary followed by this week’s links to blogs and financial articles.
I only wrote two posts for Monevator this week, instead of my usual three.
I’m currently working long hours, you see, and that’s devoured most of my free time.
But never mind, because according to the specious logic of self-justifying bankers, I must be entitled to a six-figure bonus check as a result of my labours.
After all, “We work hard!” is one of the cries that the denizens of the financial goldfish bowl use to justify their inflated incomes.
As if nobody else works hard.
A core principle of most sensible investing strategies is to avoid having all your eggs in one basket:
- Asset allocation gives you several baskets.
- Portfolio diversification ensures that if any egg is rotten, you can still make an omelete.
Enough of the eggs already. (Not least because it’s making me hungry).
In practical terms, what it means is splitting your wealth between several asset classes, such as shares, bonds, and property. (See the Ivy League portfolio for an example).
It also means not putting all your money in just a couple of stocks or bonds or one rental flat above a Chinese restaurant, but rather diversifying for instance your equity allocation by buying a dozen or so stocks, or by using an index tracker.
All very sensible, and advisable. But in recent times largely useless.
This post will show why asset allocation isn’t delivering like it used to.
My weekly commentary followed by this week’s links to blogs and financial articles.
Star fund manager Neil Woodford caused a stir this week by revealing he has sold his holdings in oil giants BP and Shell.
Woodford believes the oil majors dividends are not secure, which makes them untenable in his £18 billion equity income fund.