U.S. firms hoard billions of cash and equivalents unable to deploy them for growth or distribute them with shareholders. Some of this cash is stashed abroad to avoid paying high US corporate taxes. In September I wrote an article listing the Top 25 Global Public Cash-Rich Companies. In this post let us take a quick …
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Some sectors of the equity market perform when interest rates rise and vice versa. Based on an analysis of historical data, a report by Fidelity Investments notes that high-yielding sectors like utilities and consumer staples under-perform when rates rise. On the other hand, financials outperform the overall market when rates increase. Click to enlarge Source: A new …
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Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Compounding simply implies earning interest on interest to multiply one’s cash savings. The power of compounding works well only when the interest rate offered on a savings account is decent. …
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One of the factors that affects investors in the construction of a equity portfolio is the issue of home bias. Because of this issue investors to tend to avoid investing in foreign stocks. An investor building a globally diversified portfolio must allocate assets based on the market-cap weighting of each country in a broad global …
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The savings rate in Australia is much higher than the U.S. rate. In the U.S., the Personal Saving Rate stood at just 6.0% as of October, 2016. This rate is the same as the household savings rate in Australia. Click to enlarge U.S. Personal Saving Rate: Source: Federal Reserve of St.Louis In the 60s and 70s, …
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