FIN435 Class Web
Page, Spring '25
Jacksonville
University
Instructor:
Maggie Foley
The
Syllabus Overall Grade calculator Risk Tolerance Test
Exit Exam Questions (will be posted in week 10 on blackboard)
Term Project (on efficient
frontier, updated, due with final)
Weekly SCHEDULE, LINKS, FILES and Questions
Week |
Coverage, HW, Supplements -
Required |
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Reading Materials |
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Week 1 |
Marketwatch Stock Trading Game (Pass code: havefun) 1. URL for your game: 2. Password for this private game: havefun. ·
Click on the 'Join Now' button to get started. ·
If you are an existing MarketWatch member, login. If
you are a new user, follow the link for a Free account - it's easy! ·
Follow the instructions and start trading! 3. Game will be over
on 4/25/2025 5. Game
·
Mutual Fund
Selection Game (FYI) ·
Order Type Explained
Game (FYI) 6. Youtube Instructions · How to Use
Finviz Stock Screener (youtube, FYI)
· How To Win The
MarketWatch Stock Market Game (youtube, FYI)
· How Short
Selling Works (Short Selling for Beginners) (youtube,
FYI)
~ Tariff
(FYI) ~ Now, let’s work on this survey about
tariffs. Tariff Survey Game: Tariff Trade Simulation
A simple game |
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Chapter 6 Interest rate Chapter summary 1) Shape of Yield Curve i) Inverted Yield Curve Indicates Recession:
The shape of the yield curve, particularly when inverted, serves as a
significant indicator of an impending recession. 2) Expectation Theory 3) Interest Rate Breakdown i) Breaking down interest rates involves
considering various components: Real Interest
Rate Inflation
Premium: Default
Premium: Liquidity
Premium:
Maturity Premium: Part
1 - Who Wants to Chair the Fed? Quiz 1 Game: https://lewis500.github.io/macro/ The
Federal Reserve (Fed) often faces the challenging dilemma of balancing economic
growth with price stability - commonly
referred to as the trade-off between controlling inflation
and minimizing unemployment. 1. Inflation vs. Unemployment
2. Long-term Stability vs. Short-term Relief
3. Uncertainty and Lag Effects
In
the game, you play as the Fed chair and must make interest rate decisions to
strike this delicate balance while keeping inflation and unemployment within
acceptable ranges. Success depends on how well you manage these competing
goals over time. Factors
to Consider:
1.
Current Inflation Rate:
2.
Unemployment Rate:
3.
Economic Growth:
4.
Consumer and Business
Confidence:
5.
Financial Market
Conditions:
6.
Global Economic Trends:
7.
Lag Effects of Monetary
Policy:
8.
Federal Reserve’s Dual Mandate:
In-Class
Debate: Should the Fed Reduce Interest Rates Soon, or Is It Better to Wait?
The next Federal Open Market
Committee (FOMC) meeting is scheduled for January 28–29, 2025. Let’s wait and see what unfolds
leading up to this critical decision. |
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Part
II – Who Determines Interest Rates? Market data website: Market watch on Wall Street Journal has daily yield curve and
interest rate information.
In
class Exercise: Draw the yield curve as of January 16, 2025.
Part III: Shapes of Yield Curve For class
discussion: What
factors contributed to the shifts in yield curve shapes in 2023? https://www.jufinance.com/fin435_25s/yield_curve_1_15_2025.html Data:
In Class Exercise Create your own yield curve
by visiting https://www.jufinance.com/game/yield_curve.html.
General Observations
1.
Shifts in Monetary
Policy:
2.
Inversions and Recession
Signals:
3.
Market Expectations:
Conclusion
The
yield curves highlight the economic shifts from pre-pandemic growth (2020) to
pandemic-driven lows (2021), recovery (2022), inflation-driven tightening
(2023), and cautious normalization (2025). The curve as of 2025 suggests that
while economic pressures are easing, uncertainties around growth and
inflation persist.
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Who Determines Interest Rates?
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Part IV – Breaking Down of Interest Rates of Treasury and Corporate Bonds Quiz
2 Game -
Interest Rate Explorer 1. Compare
Treasury and Corporate Bonds:
2.
Breaking Down of
Interest Rates: Play this
game bond_yield_breakdown game! ( https://www.jufinance.com/game/bond_yield_break_down.html)
Formula ---
Break down of interest rate r = r* + IP + DRP + LP + MRP r = required return on a debt security r* = real risk-free rate of interest IP = inflation premium DRP = default risk premium LP = liquidity premium MRP = maturity risk premium MRPt
= 0.1% (t – 1) DRPt + LPt = Corporate spread * (1.02)(t−1)
https://www.finra.org/finra-data/fixed-income/corp-and-agency
(corporate bonds) https://www.finra.org/finra-data/fixed-income/treasuries
(Treasury Securities)
Note:
3. Visualize the Yield Curves
4. Simplify the Yield Spread Formula
Objective:
Break down the difference between Treasury and corporate bonds. ·
Formula: ·
Example for 30-Year
Bond:
In Class Exercise
Key
Takeaways
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Part V – Expectation Theory
Quiz Scenario:
"Which Investment Should You Choose?"
You
have $10,000 to invest and three simple options: ·
Option 1:
Invest for 1 year at 5%,
then reinvest each year for the next 4 years at the rates below: ·
Option 2:
Lock your money in for 3 years at a fixed rate of
4.5% per year.
Based on your results, which
option is better if you plan to use the money after 5 years? Question for discussion: If
a% and b% are both known to investors, such as the bank rates, how much is
the future interest rate, such as c%? (1+a)^N = (1+b)^m *(1+c)^(N-M) Either earning a% of interest rate
for N years, or b% of interest rate for M years,
and then c% of interest rate for (N-M) years, investors should be indifferent.
Right? Then, (1+a)^N = (1+b)^m *(1+c)^(N-M)è c = ((1+a)^N / (1+b)^m)^(1/(N-M))-1 Or approximately, N*a = M*b +(N-M)*(c)è c = (N*a –
M*b) /(N-M) What Is Expectations Theory
Expectations theory attempts
to predict what short-term interest rates will be in the future based
on current long-term interest rates. The theory suggests that an investor
earns the same amount of interest by investing in two consecutive
one-year bond investments versus investing in one two-year bond today. The
theory is also known as the "unbiased expectations theory.” Understanding Expectations
Theory
The expectations theory aims
to help investors make decisions based upon a forecast of future
interest rates. The theory uses long-term rates, typically from government
bonds, to forecast the rate for short-term bonds. In theory, long-term rates
can be used to indicate where rates of short-term bonds will trade in the
future ( Example: Given that the
current 2-year rate is 4.1% and the 1-year rate is
4.3%, what is the expected 1-year rate one year from now?
(Answer: 3.9%. Why?) |
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Chapter 6 In class exercise
1 You read
in The Wall Street Journal that 30-day T-bills are currently
yielding 5.5%. Your brother-in-law, a broker at Safe and Sound Securities, has
given you the following estimates of current interest rate premiums:
On the
basis of these data, what is the real risk-free rate of return? (answer:
2.25%) Solution: General
equation: Rate = r* + Inflation + Default + liquidity + maturity 30-day
T-bills = short term Treasury Security è Default = liquidity = maturity = 0 So
30-day T-bills = 5.5% = r* + inflation =r* + 3.25% 2 The real
risk-free rate is 3%. Inflation is expected to be 2% this year and 4% during
the next 2 years. Assume that the maturity risk premium is zero. What is the
yield on 2-year Treasury securities? What is the yield on 3-year Treasury
securities?(answer: 6%, 6.33%) Solution: General
equation: Rate = r* + Inflation + Default + liquidity + maturity 2-year
T-notes = intermediate term Treasury Security è Default = liquidity = 0, maturity=0 as given Inflation
= average of inflations from year 1 to year 2 = (2% + 4%)/2 = 3% So
2-year T-notes = r* + inflation = 3% + 3% = 6% 3-year
T-notes = short term Treasury Security è Default = liquidity = 0, maturity=0 as given Inflation
= average of inflations from year 1 to year 2 = (2% + 4% +4%)/3 = 3.33% So
2-year T-notes = r* + inflation = 3% + 3.33% = 6.33% 3
A Treasury bond that matures in 10
years has a yield of 6%. A 10-year corporate bond has a yield of 8%. Assume
that the liquidity premium on the corporate bond is 0.5%. What is the default
risk premium on the corporate bond? (answer: 1.5%) Solution: General
equation: Rate = r* + Inflation + Default + liquidity + maturity 10 year
T-notes = intermediate term Treasury Security è Default = liquidity = 0, maturity is not zero So
10-year T-notes = r* + inflation + maturity
= 6% 10 year
corporate bond rate = r* + Inflation +
Default + liquidity + maturity = 8% Its
liquidity = 0.5%, its maturity = 10-year-notes’ maturity. Comparing
10 year T-notes and 10 year corporate bonds, we get default = 8%-6%-0.5%=1.5%
4 The real risk-free rate is 3%, and inflation
is expected to be 3% for the next 2 years. A 2-year Treasury
security yields 6.2%. What is the maturity risk premium for the 2-year
security? (answer: 0.2%) General
equation: Rate = r* + Inflation + Default + liquidity + maturity 2-year
T-notes = intermediate term Treasury Security è Default = liquidity = 0, maturity=? 2-year
T-notes = 6.2% = r* + inflation + maturity = 3% + 3% + maturity 5 One-year Treasury securities yield 5%. The market
anticipates that 1 year from now, 1-year Treasury securities will yield 6%. If
the pure expectations theory is correct, what is the yield today for 2-year
Treasury securities? (answer: 5.5%) Or, |
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Swiss franc carry trade
comes fraught with safe-haven rally risk (FYI) By Harry Robertson September 2, 20241:03 AM EDTUpdated 5 months ago LONDON, Sept 2 (Reuters) - As investors turn to the Swiss
franc as an alternative to Japan's yen to fund carry trades, the risk of the
currency staging one of its rapid rallies remains ever present. The Swiss franc has long been used in the popular strategy
where traders borrow currencies with low interest rates then swap them into
others to buy higher-yielding assets. Its appeal has brightened further as the yen's has dimmed. Yen
carry trades imploded in August after the currency rallied hard on weak U.S.
economic data and a surprise Bank of Japan rate hike, helping spark global
market turmoil. The Swiss National Bank (SNB) was the first major central bank
to kick off an easing cycle earlier this year and its key interest rate
stands at 1.25%, allowing investors to borrow francs cheaply to invest
elsewhere. By comparison, interest rates are in a 5.25%-5.50% range in
the United States, 5% in Britain, and 3.75% in the euro zone. "The Swiss franc is back as a funding currency,"
said Benjamin Dubois, global head of overlay management at Edmond de
Rothschild STABILITY The franc is near its highest in eight months against the
dollar and in nine years against the euro , reflecting its status as a
safe-haven currency and expectations for European and U.S. rate cuts. But investors hope for a gradual decline in the currency's
value that could boost the returns on carry trades. Speculators have held on to a $3.8 billion short position
against the Swiss franc even as they have abruptly moved to a $2 billion long
position on the yen , U.S. Commodity Futures Trading Commission data shows. "There is more two-way risk now in the yen than there has
been for quite some time," said Bank of America senior G10 FX strategist
Kamal Sharma. "The Swiss franc looks the more logical funding currency
of choice." BofA recommends investors buy sterling against the franc ,
arguing the pound can rally due to the large interest rate gap between
Switzerland and Britain, in a call echoed by Goldman Sachs. The SNB appears set to cut rates further in the coming months
as inflation dwindles. That would lower franc borrowing costs and could weigh
on the currency, making it cheaper to pay back for those already borrowing
it. Central bankers also appear reluctant to see the currency
strengthen further, partly because of the pain it can cause exporters. BofA
and Goldman Sachs say they believe the SNB stepped in to weaken the currency
in August. "The SNB will likely guard against currency appreciation
through intervention or rate cuts as required," said Goldman's G10
currency strategist Michael Cahill. 'INHERENTLY RISKY' Yet the Swissie, as it is known in currency markets, can be an
unreliable friend. Investors are prone to pile into the currency when they get
nervous, thanks to its long-standing safe-haven reputation. Cahill said the franc is best used as a funding currency at
moments when investors are feeling optimistic. A quick rally in the currency used to fund carry trades can
wipe out gains and cause investors to rapidly unwind their positions, as the
yen drama showed. High levels of volatility or a drop in the higher-yielding
currency can have the same effect. The SNB and Swiss regulator Finma declined to comment when
asked by Reuters about the impact of carry trades on the Swiss currency. As stock markets tumbled in early August, the Swiss franc
jumped as much as 3.5% over two days. The franc-dollar pair has proven
sensitive to the U.S. economy, often rallying hard on weak data that causes
U.S. Treasury yields to fall. "Any carry trade
is inherently risky and this is particularly true for those funded with
safe-haven currencies," said Michael Puempel, FX strategist at
Deutsche Bank. "The main risk is that when yields move lower in a
risk-off environment, yield differentials compress and the Swiss franc can
rally," Puempel added. A gauge of how much investors expect the Swiss currency to
move , derived from options prices, is currently at around its highest since
March 2023. "Considering the central banks, you can see how there may
be more sentiment for some carry players to prefer the franc over the
yen," said Nathan Vurgest, head of trading at Record Currency
Management. "The ultimate success of this carry trade might still be
dependent on how quickly it can be closed in a risk-off scenario,"
Vurgest said, referring to a moment where investors cut their riskier trades
to focus on protecting their cash. Get the latest news and expert analysis about the state of the
global economy with the Reuters Econ World newsletter. Sign up here. Reporting by Harry Robertson; Editing by Dhara Ranasinghe and
Alexander Smith Key Insights from the
Article:
1.
Swiss Franc as a Funding
Currency:
2.
Carry Trade Dynamics:
3.
Safe-Haven Risks:
4.
Central Bank Influence:
5.
Strategist Views:
6.
Risks of Swiss Franc
Carry Trades:
7.
Investor Sentiment:
This
analysis highlights the opportunities |
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Chapter 6 – Assignments ·
Optional: Are there any
arbitrage opportunities based on the information provided below? Why or why
not?
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Chapter 7 Bond Valuation https://www.morningstar.com/portfolios/experts-forecast-stock-bond-returns-2025-edition For discussion: https://jufinance.com/risk_tolerance.html Quiz
·
Among the aforementioned bonds, do you have a preference? If so, what
factors influence your choice? Where
to Invest in 2025: Key Takeaways: (self-developed video on
youtube)
https://www.morningstar.com/markets/where-investors-can-find-highest-bond-yields-2025-2
1.
Cash is No Longer King: ·
Why? Cash yields peaked in
2024 (5.5%) and are now dropping (4.3%-4.4%). Yields on cash reset daily, so
returns are no longer guaranteed. ·
Risk: Hoarding cash means
missing out on higher returns from other investments, like bonds or stocks. 2.
Interest Rates are
Expected to Drop: ·
Forecast: Interest rates may fall to 3% by the end of 2025. ·
The yield curve is flattening, meaning
long-term bonds now offer better opportunities. 3.
Move Out of Cash and
Into Bonds: ·
Long-Term Bonds:
Offer both price appreciation (when rates fall) and steady income. Ideal for
a declining interest-rate environment. ·
Short-Term Bonds:
Less attractive as their income potential fades with falling rates. 4.
Corporate Bonds are Less
Appealing in 2025: ·
High-yield bonds (like “junk
bonds”) now have low yield spreads, meaning the extra
return over Treasuries is not enough to justify the risk. ·
Example: High-yield bonds yield 7.2%, but
the risk premium is only 2.6%—historically very low. 5.
Emerging Market Bonds
Offer Higher Yields: ·
Countries like Brazil (14%)
and Mexico (10%)
offer attractive “real yields”
(returns after inflation). ·
Risks: Currency fluctuations,
political instability, and lower liquidity compared to US bonds. 6.
Why Bonds are Important
in Portfolios: ·
Treasuries provide stability
and hedge against market volatility. ·
Today’s bond yields (~4%) offer positive
real returns, which weren’t possible in past years. 7.
Tips for Investing:
Market data website: FINRA: https://www.finra.org/finra-data/fixed-income (FINRA bond
market data)
Relationship
between bond prices and interest rates (Khan academy)
Reading material: ·
Interest rate risk — When
Interest rates Go up, Prices of Fixed-rate Bonds Fall, issued by SEC at https://www.sec.gov/files/ib_interestraterisk.pdf
·
Higher market interest rates è lower fixed-rate bond prices è higher fixed-rate bond
yields ·
Lower fixed-rate bond coupon rates
è higher interest rate risk ·
Higher fixed-rate bond coupon rates è lower interest rate risk
·
Lower market interest rates è higher fixed-rate bond prices è lower fixed-rate bond yields èhigher interest rate risk to rising market
interest rates ·
Longer maturity è higher interest rate risk è higher coupon rate ·
Shorter maturity è lower interest rate risk è lower coupon rate From https://www.sec.gov/files/ib_interestraterisk.pdf Bond Pricing Excel Formula To calculate bond price in EXCEL (annual coupon
bond): Price=abs(pv(yield to maturity, years left to maturity, coupon
rate*1000, 1000) To calculate yield to maturity (annual coupon bond):: Yield to maturity = rate(years left to maturity, coupon rate
*1000, -price, 1000) To calculate bond price (semi-annual coupon bond): Price=abs(pv(yield to maturity/2, years left to maturity*2,
coupon rate*1000/2, 1000) To calculate yield to maturity (semi-annual coupon bond): Yield to maturity = rate(years left to maturity*2, coupon
rate *1000/2, -price, 1000)*2 To calculate duration: DURATION=DURATION(DATE(2025,2,4),DATE(2035,2,4),5%,7%,2,0)=7.80 Interpretation:
·
A duration of 7.80
means that for every 1% increase in interest
rates, the bond’s price is expected to decrease by approximately
7.8%. Conversely, if interest rates fall
by 1%, the bond’s price would increase by 7.8%. In Class Exercise (could be used to prepare for the
first midterm exam) 1.
AAA firm’ bonds will mature in eight years, and coupon is $65.
YTM is 8.2%. Bond’s market value? ($903.04, abs(pv(8.2%, 8, 65, 1000)) ·
Rate 8.2% ·
Nper 8 ·
Pmt 65 ·
Pv ? ·
FV 1000 2. AAA firm’s bonds’ market value is $1,120, with
15 years maturity and coupon of $85. What is YTM? (7.17%,
rate(15, 85, -1120, 1000)) ·
Rate ? ·
Nper 15 ·
Pmt 85 ·
Pv -1120 ·
FV 1000 3. Sadik
Inc.'s bonds currently sell for $1,180 and have a par value of
$1,000. They pay a $105 annual coupon
and have a 15-year maturity, but they can be called in 5 years at
$1,100. What is their yield
to call (YTC)? (7.74%, rate(5, 105, -1180, 1100)) What is
their yield to maturity (YTM)? (8.35%, rate(15,
105, -1180, 1000)) ·
Rate ? ·
Nper 15 ·
Pmt 105 ·
Pv -1180 ·
FV 1000 4. Malko
Enterprises’ bonds currently sell for $1,050. They have a 6-year
maturity, an annual coupon of $75, and a par value of $1,000. What
is their current yield? (7.14%,
75/1050) 5. Assume
that you are considering the purchase of a 20-year, noncallable bond with an
annual coupon rate of 9.5%. The bond has a face value of $1,000,
and it makes semiannual interest payments. If you require an 8.4%
nominal yield to maturity on this investment, what is the maximum price you
should be willing to pay for the bond? ($1,105.69, abs(pv(8.4%/2, 20*2, 9.5%*1000/2, 1000)) ) ·
Rate 8.4%/2 ·
Nper 20*2 ·
Pmt 95/2 ·
Pv ? ·
FV 1000 6. Grossnickle
Corporation issued 20-year, non-callable, 7.5% annual coupon bonds at their
par value of $1,000 one year ago. Today, the market interest rate
on these bonds is 5.5%. What is the current price of the bonds,
given that they now have 19 years to maturity? ($1,232.15, abs(pv(5.5%, 19, 75, 1000))) ·
Rate 7.5%/2 ·
Nper 19 ·
Pmt 75 ·
Pv ? ·
FV 1000 7. McCue
Inc.'s bonds currently sell for $1,250. They pay a $90 annual coupon, have a
25-year maturity, and a $1,000 par value, but they can be called in 5 years
at $1,050. Assume that no costs other than the call premium would
be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with
rates expected to remain at current levels on into the
future. What is the difference between this bond's YTM and its
YTC? (Subtract the YTC from the YTM; it is possible to get a
negative answer.) (2.62%, YTM = rate(25, 90,
-1250, 1000), YTC = rate(5, 90, -1250, 1050)) ·
Rate ? ------------ ? ·
Nper 25 ------------- 5 ·
Pmt 90 ------------ 90 ·
Pv -1250 ------------ -1250 ·
FV 1000 ------------ 1000 8. Taussig
Corp.'s bonds currently sell for $1,150. They have a 6.35% annual
coupon rate and a 20-year maturity, but they can be called in 5 years at
$1,067.50. Assume that no costs other than the call premium would
be incurred to call and refund the bonds, and also assume that the yield
curve is horizontal, with rates expected to remain at current levels on into
the future. Under these conditions, what rate of return should an
investor expect to earn if he or she purchases these bonds? (4.2%, rate(5, 63.5, -1150, 1067.5)) 9. A
25-year, $1,000 par value bond has an 8.5% annual payment
coupon. The bond currently sells for $925. If the yield
to maturity remains at its current rate, what will the price be 5 years from
now? ($930.11, rate(25, 85, -925, 1000),
abs(pv( rate(25, 85, -925, 1000), 20, 85, 1000)) Fixed
Income Investor's Reference Guide (FYI)
Quiz
(This
guide is based on principles and insights from trusted financial resources,
including Investopedia, Morningstar, Bloomberg, and FINRA.) Key Metrics for Bond Analysis
1)
Yield to Maturity (YTM): ·
The total return earned by holding a bond
until maturity. Essential for comparing bond values. 2)
Duration: ·
A measure of price sensitivity to interest
rate changes. Longer duration = higher sensitivity. 3)
Convexity: ·
Enhances duration analysis by accounting
for large interest rate shifts. 4)
Credit Ratings: ·
Assess bond risk via agencies like
Moody’s, S&P, and Fitch. Higher ratings = lower risk. 5)
Spread Analysis: ·
Compare bond yields against benchmarks
(e.g., Treasuries) to gauge risk and reward. Types of Bonds
1.
Government Bonds: ·
Low risk, used as market benchmarks (e.g.,
U.S. Treasuries). ·
Risk:
Interest rate risk for long maturities. 2.
Corporate Bonds: ·
Higher yields but increased risk.
Categories include investment-grade and junk bonds. ·
Risk:
Default and liquidity risks. 3.
Municipal Bonds: ·
Tax-exempt income for high-tax-bracket
investors. ·
Risk:
Default and interest rate risks. 4.
TIPS
(Inflation-Protected Securities): ·
Inflation-adjusted principal protects
against rising prices. 5.
Emerging Market Bonds: ·
High yields, but risks include currency
fluctuations and political instability. Key Risks in Fixed Income
1)
Interest Rate Risk:
Bond prices drop when rates rise; longer maturities are most affected. 2)
Credit Risk:
The possibility of the bond issuer defaulting on payments. 3)
Liquidity Risk:
Difficulty in selling bonds quickly at fair prices. 4)
Reinvestment Risk:
Falling rates reduce income when reinvesting proceeds. 5)
Inflation Risk:
Fixed payments lose purchasing power as inflation increases. Tools for Bond Investors
1)
Bond Screeners:
Platforms like Bloomberg, FINRA, and Morningstar for research and filtering. 2)
Excel:
Use Excel to model YTM, duration, and portfolio returns. 3)
Bond Indices:
Benchmarks like Bloomberg Barclays Aggregate Index track bond market
performance. 4)
Economic Indicators:
Stay updated with Fed decisions, inflation rates, and employment reports. Portfolio Strategies
1)
Laddering:
Divide investments across maturities to manage reinvestment and interest rate
risks. 2)
Barbell Strategy:
Combine short-term and long-term bonds for flexibility and yield. 3)
Core-Satellite Approach:
Base your portfolio on stable bonds while adding high-yield options for
growth. Monitoring the Market
1)
Yield Curve Analysis: A
normal curve signals growth, while an inverted one predicts economic
slowdown. 2)
Credit Spreads:
Wider spreads indicate higher risk; narrower spreads suggest stability. 3)
Central Bank Policies:
Interest rate changes by the Fed affect bond yields and prices significantly. Practical Exercises
1)
Bond Trading Simulation:
Platforms like Investopedia allow practice in a risk-free environment. 2)
Case Studies:
Analyze market events like the 2008 financial crisis to understand bond
behavior. 3)
Portfolio Construction: Create
mock portfolios tailored to specific investment goals. Inspirational Stories and Role-Playing
1.
Learn from bond market legends like Bill
Gross and their strategies. 2.
Simulate decision-making as a CFO or bond
trader to understand market dynamics (Play a simple simulation game here) Key Takeaways
1)
Always analyze YTM,
duration, and credit ratings
to make informed decisions. 2)
Diversify with a mix of government,
corporate, and municipal bonds to balance risk. 3)
Leverage tools like bond screeners and
economic data for insights. 4)
Track the yield curve, credit spreads, and
Fed policies to anticipate market trends. 5)
Practice with simulations and real-world
scenarios to refine your skills. 2025
Global Fixed Income Outlook (FYI)
Reference
Websites for Spreads and Metrics (FYI)
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