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How fear is driving bank share prices

Barclays Bank shares rose 72% on January 27th

Barclays Bank shares rose 72% on January 27th

Source: Digital Look

I don’t know what annoys me more: That Barclays Bank shares rose 72% on Monday while I was still finishing off a post suggesting they might be worth a punt, or that I didn’t buy any myself.

Oh ‘greedy’ side of the fear-greed investing equation, how we’ve missed you.

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What causes corporate bond prices to fluctuate?

There are three main things that drive changes in a corporate bond’s yield and so its price:

  1. The closeness to the redemption date
  2. The interest rate environment
  3. The perceived risk of the bond defaulting

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What are corporate bonds?

Just as governments issue bonds to finance public spending, so companies issue bonds to raise money to invest in their business.

For companies, corporate bonds provide an alternative to raising money by issuing shares. For private investors, corporate bonds offer the opportunity to buy a fixed income in exchange for an investment of capital.

All types of corporate bonds share common traits that you need to understand before you consider an investment.

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Honestly, I despair. The day before the UK Government unveils a second banking rescue package worth hundreds of billions of pounds and RBS (once one of the world’s largest banks) falls 67% to become a penny stock, the Conservative party apparatus circulates a press release concerning… Value Added Tax in a Government gift shop.

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