Market Review and Trends
The Constant Rate Hikes in US is creating a property and insurance problem in Singapore
By Investmoolah  •  October 2, 2022
That's my thought based on the following facts I have learnt during my time in the market: (i) A rising interst rate reduces bond prices (ii) A rising rate reduces share prices due to an increase in discounting rate (iii) A rising rate increases interest expense The Property Problem To summarise, there are many local funds leveraged to the hilt during the era of low interest. A group of them are property workshops that have attracted many "wanna get rich" people. The idea is simple- (a) buy a property, (b) max the leverage pay the low interest of 1.8-2%, (c) get rental yield, pocket the difference of interest (c) and (d) while waiting for your property to appreciate, (e) repeat Step (a) to (d) by buying another property. Here is the problem, the Fed's hike is creating (b) a higher interest expense while (c) is not rising fast enough. It will come  ...
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By Investmoolah
A total otaku who loves anime, investing and the occasional K-drama. My financial journey begun at the age of 22 and has revolved around the concepts of "Working Hard", "Saving Well" and "Investing Wisely". Through my journey, I have realized that financial literacy is something we have learnt little during our school days but is one of the most useful and relevant skill that we have to be equipped to take on the real world. Concepts such as compounding and "common sense investing" are skills that will place us ahead of the race to retirement ...
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