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Credit Risk

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Don't panic, this isn't 2008

This banking crisis in the US and Europe is very different to the one which caused the 2008 Global Financial Crisis. If right, it provides an opportunity to find undervalued stocks unfairly pulled down with the bank carnage.

Now you can earn 5% on bonds but stay with quality

Conservative investors who want the greater capital security of bonds can now lock in 5% but they should stay at the higher end of credit quality. Rises in rates and defaults mean it's not as easy as it looks.

Global credit valuations: are we there yet?

The market has seen a major widening of credit spreads as investors demand greater compensation for liquidity risk. Has the market reached the point where it offers value?

Lessons from the Volkswagen scandal

When a company fraud is uncovered there are many losers, and companies are not run to benefit bondholders. The main protection against such unforeseeable risks is to maintain a well-diversified portfolio.

A beginner’s guide to peer to peer lending

Advances in technology have allowed peer to peer lending to thrive, offering credit to more potential borrowers at lower interest rates than those offered by banks. How does it work and will it last?

Are bonds liquid?

There's no straightforward answer to the question of whether a bond is liquid. Unfortunately, at the time when you most want to sell, everyone is likely to be running for the exit.

An idiot’s guide to bond funds

In response to a reader's question regarding bond funds, we asked our bond guru to explain, in layman's term, the workings of bond funds and what features to look for before investing in this asset class.

Personal investors need credit reporting too

Individuals have their credit history checked by financiers whenever they apply for finance. Why isn’t there a way for retail investors to check the credentials of financial institutions before investing their money?

Managing credit risk requires healthy dose of cynicism

In the world of credit risk, you need to understand the capacity of the borrower to pay what they’ve promised, then assume that they will let you down anyway and avoid concentrating your portfolio.

Give this risk the credit it deserves

The risk that bond investors should be most concerned about is credit risk. Market risk does not produce a permanent loss of capital, and higher yields result in increasing returns over time.

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Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

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