Woke up to multiple big news today from probably the biggest money players of all — the government.
First, China – raises its monetary rates in a TIGHTENING policy move. This causes money to be less available or have a “deleveraging” effect. Shares slip. Article here.
Second, Bank of Japan “offered to buy an unlimited amount of bonds at a fixed rate in an unscheduled operation.” Which is a stimulus measure. Stocks rose. (Article here)
Third, the US — announced halting of both the Dodd-Frank and Volcker Rule, apparently hated by the financial industry. “White House emphasizes approaches to removing regulatory burdens and opening up investor options”. Article here.
https://www.bloomberg.com/news/articles/2017-02-02/asian-stocks-to-gain-as-china-returns-from-break-markets-wrap
It was yesterday’s news but still notable, in the Philippines, the government just made mining virtually a no-go zone for investors — shutting down mining areas and companies who are endangering the environment. Most are nickel producers. Half of the world production of Nickel is mined in the Philippines. Prices of Nickel surged. Article here.
So yes, pleased with myself that blog post yesterday, I made a reco about banking on banks — which is for the US, probably the sector that has the least worry with regards to new policies.
Which brings me to share, this is a criteria most investors miss when they go about choosing their investment. How is your investment going to perform taken together with the Big Picture – the economy, new government policies, the big money players. When I started, most of the decision is based on what I can afford (haha) and some understanding of the industry (like I have never invested in biotech – being well-aware of my limitations to understand medical terms hehe). We are all free to pick and choose what investment / stock we like. Is your investment safe from the Big Money Players?
I will be holding another set of workshops, the Invest Right Foundation Workshop and US Investing Workshop. I will be tackling how to choose stocks, the best stocks to invest in, managing risks and maintaining discipline in my next workshop on March 4 (sorry for the change, mix-up in the venue booking)
An important component of the workshop is adding another income stream (in US Dollars! ) as well as taking advantage of the growing US economy by investing in US stocks.
Check out the details here:
https://www.bloomberg.com/politics/articles/2017-02-03/trump-to-halt-obama-fiduciary-rule-order-review-of-dodd-frank
“What investors want is more transparency and lower fees.”
Volcker Rule
What is the ‘Volcker Rule’
A federal regulation that prohibits banks from conducting certain investment activities with their own accounts, and limits their ownership of and relationship with hedge funds and private equity funds, also called covered funds. The Volcker Rule’s purpose is to prevent banks from making certain types of speculative investments that contributed to the 2008 financial crisis.
BREAKING DOWN ‘Volcker Rule’
Named after former Federal Reserve Chairman Paul Volcker, the Volcker Rule disallows short-term proprietary trading of securities, derivatives, commodity futures and options on these instruments for banks’ own accounts under the premise that these activities do not benefit banks’ customers. In other words, banks cannot use their own funds to make these types of investments to increase their profits.
Read more: Volcker Rule Definition | Investopedia http://www.investopedia.com/terms/v/volcker-rule.asp#ixzz4XbZgBsou
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China tightens, Japan supports
https://www.bloomberg.com/news/articles/2017-02-03/china-s-pboc-increases-interest-rates-in-open-market-operations
