What are the alternatives to term deposits for risk averse investors?
Автор: Livewire Markets
Загружено: 2021-12-14
Просмотров: 1200
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Investors don't have to watch their savings go backwards as inflation and low-interest rates continue to erode returns, says Realm Investing House managing partner Andrew Papageorgiou.
In this episode of Expert Insights, Papageorgiou explains why conventional fixed-income vehicles continue to disappoint and how a broader view of the available options could improve yields.
"Imagine for a moment that you've got $10 million in the bank, and you're basically taking $25,000 worth risk-free income out of it," he says. "That is below what a pensioner couple receives. So much for being a self-funded retiree."
Papageorgiou emphasises the importance of calculating real returns and recommends moving a little way up the risk curve into instruments such as asset-backed securities.
"You should be able to achieve a rate of return somewhere around 1.5% with a reasonably diverse group of high-quality credit assets," he says. "And right now, that might be the sweet spot."
Only a few years ago, 1.5% would have seemed like nothing at all. But in today's environment, it's better than the real return of minus 2.55% on offer in cash.
Read on: https://www.livewiremarkets.com/wires...
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