David Lai, Investment Director of Fixed Income at Eastspring Investments shares his strategies of investing in Asian bonds in a volatile market....(read more)
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With the global economy suffering from the impact of Covid-19, many investors are looking for safe havens to park their money. One area that is drawing increased attention is investing in Asian bonds. Here are some tips from investment experts to help navigate the Asian bond market. 1. Understand the Asian bond market It is essential to have a good understanding of the underlying fundamentals of the Asian bond market, including the various countries' economic policies, political stability, central bank policies, and demographic trends. Experts say that the countries with a strong economy can provide better yields on their bonds. According to analysts, some of the countries offering sustainable yields in recent years include South Korea, China, and India, amongst others. 2. Diversify your portfolio When it comes to investing in Asian bonds, experts advise diversifying your portfolio. That means investing not only in government bonds but also in corporate bonds and emerging market bonds. Diversification helps mitigate risk and enhances the potential to earn higher returns. 3. Look for currencies that are likely to appreciate Investment experts suggest investing in Asian bonds that are denominated in currencies expected to appreciate. For instance, the Chinese Yuan has been appreciating in recent times. It is now more expensive to buy these bonds, but it is worth it if you bet on the Yuan's appreciation in the long run. 4. Be Selective Investing in bonds requires some level of selectivity. Some bonds may offer high yields, but underlying factors may indicate instability in the issuer country, political risks, or credit risks. Analyzing financial statements, credit ratings, growth prospects, and risks help in making informed investment decisions. 5. Monitor macroeconomic factors It is crucial to keep a close eye on macroeconomic factors such as interest rates and currency devaluations that can affect bond yields. The central bank policies will significantly influence the bond yields. Interest rate cuts can significantly impact bond prices, while unexpectedly increasing the borrowing cost can lead to sharp declines in bond yields. Understanding how these macroeconomic factors interact is crucial for making informed investment decisions. In summary, investing in Asian bonds can provide lucrative returns. But like any investment, it requires research, analysis, and due diligence to find the best-playing opportunities. Understanding the market, diversification, selectivity, and monitoring macroeconomic factors are essential tips that experts suggest for successful investing in Asian bonds. https://inflationprotection.org/expert-advice-on-investing-in-asian-bonds/?feed_id=99233&_unique_id=6467d37863eac #Inflation #Retirement #GoldIRA #Wealth #Investing #Asian #Bonds #Eastspring #fixed #Fundsupermart #iFAST #income #market #volatile #TIPSBonds #Asian #Bonds #Eastspring #fixed #Fundsupermart #iFAST #income #market #volatile
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