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Should You Adjust Your Investment Strategy Following Fed Rate Hike? – GOBankingRates

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Attempting to ease the worst inflation in 40 years, the Federal Reserve raised its benchmark rate on June 15, its first three-quarter-point increase since 1994. It also raised concerns of investors wondering if they should sell off depreciating stocks and make wholesale changes to their portfolios.

See: Experts Share Where To Focus Investments During High Inflation
Discover: How Bear Market Can Benefit Investing Newbies

For certain, the economic picture of 2022 has been a lousy one, filled with sky-high inflation and consumer prices not seen in decades. However, many experts agree that selling off investments during times of economic crises is usually a losing proposition. Unless you are particularly adept at predicting the future, herding in turbulent times will likely leave you selling your assets when they are at absolute rock bottom.

Speaking to Money, Rob Williams, managing director of financial planning, retirement income and wealth management at Charles Schwab, said that the Fed’s fight shows a belief in the economy to right itself over time and that investors who hold a good asset mix and a willingness to ride out the tough times are usually in the best position to move forward in more certain times.

“The Federal Reserve is showing that they have more confidence in the continued growth of the U.S. economy,” Williams says. “The real bottom line is we don’t think people should make major changes to their portfolio if they’re invested for the long term and they have a diversified portfolio.”

Diversifying your assets makes sense, but so does the way you trade, according to Barry Gilbert, asset allocation strategist at LPL Financial.

Aside from waiting for stocks values to rebound and, hopefully, enter a bull territory, there are minor tweaks an investor should be making to provide a bit of financial stability to their lives. Paying down any large variable rate debts or large credit card debt is one. Another is changing where you are saving your money.

Speaking to Money, Gilbert said, “That doesn’t mean suddenly go underweight whatever your stock allocation is or anything like that,” adding, “but if you’ve been more aggressive than you usually are, we might start the process of dialing it back down towards your baseline again.”

Related: 6 Alternative Investments To Consider for Diversification in 2022

According to CNBC, the Fed rates don’t directly affect savings rates. With major bank rates being so insignificant now, it would be worth your while to shop around for a savings account that will earn you more.

For those who have previously shied away from opening online savings accounts, now is the perfect time to look into them, as they can often offer customers a much higher rate then their brick-and-mortar counterparts.

Chester Spatt, professor of finance at Carnegie Mellon University’s Tepper School of Business, also recommended looking into U.S. government bonds as an opportunity to boost your savings in a turbulent economy.

Despite the caveats of a buying limit and not being able to take any money from them for at least one year, bonds are protected from inflation, are relatively risk-free and government-backed and provide an impressive yield — paying a 9.62% annual rate through October 2022, the highest yield since being introduced in 1998, according to CNBC.

Survive and Prosper in Bear Market: Experts Share Rock-Solid Investment Strategies
Find: What Impact Did the Fed’s Interest Rate Hike Have on the Crypto Market?

The next Federal Reserve policy meeting is on July 27 and it is expected to be followed by another 0.75% point hike announcement as Powell and the Fed attempt to finally ease the inflation rate without putting the U.S. economy into a recession.

Whether it works remains uncertain. There is no guarantee that things won’t get worse before improving. On a personal finance level, the best thing is often the simplest, or, as Williams said, “Sometimes long-term success is about discipline and small steps and not overreacting.”

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.

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Investment

China proposes rules to regulate private pension investment via mutual funds – Reuters.com

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A Chinese national flag flutters near the building of China Securities Regulatory Commission (CSRC) at the Financial Street area in Beijing, China July 16, 2020. REUTERS/Tingshu Wang/Files

SHANGHAI, June 25 (Reuters) – China’s securities regulator proposed rules to regulate private pension investment via mutual funds, setting the criteria for qualified products and sales agents under a scheme that will channel fresh savings into the country’s capital markets.

The draft rules, published by the China Securities Regulatory Commission (CSRC) late on Friday, came after Beijing in April launched a milestone private pension scheme to tackle challenges of aging population. read more

Under the scheme, eligible Chinese citizens can buy mutual funds, savings deposits and insurance products via their own individual pension accounts, potentially boosting a pension market that has lured foreign asset managers including Fidelity International and BlackRock.

The proposed rules “have set a relatively high bar for products and institutions, and are designed to ensure safety of pension fund investment and protect investors’ interest,” the CSRC said in a statement on its website.

Initially, pension target funds with at least 50 million yuan ($7.48 million) of assets over the past four quarters are eligible under the pilot pension scheme, the CSRC said.

Other types of retail funds with clear investment strategies and good long-term track records will be gradually added to the eligibility list as the scheme expands, the CSRC said.

Currently, there are 91 pension target funds that meet the CSRC’s criteria, according to TF Securities.

In addition, fund managers and sales agents participating in private pension business must set up internal control systems, adopt long-term incentives, and ensure independent operation of the pension assets, according to the rules.

Independent consultancies estimate China’s private pension market will grow to at least $1.7 trillion by 2025, from $300 billion currently.

In 20 years, 28% of China’s population will be more than 60 years old, up from 10% today, making it one of the most rapidly-aging populations in the world, according to the World Health Organization.

($1 = 6.6878 Chinese yuan renminbi)

Reporting by Samuel Shen and Brenda Goh
Editing by Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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Not gold or bank FD, Jefferies finds this asset as top investment by Indians | Mint – Mint

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Amid soaring inflation and slowdown worries, investors are busy finding out save haven for their money. While some are batting in favour of gold, some investors are favouring debt instruments for short term like bank fixed deposits (FDs) and other deposits. But, if we go by the Jefferies findings, around half of the Indian household savings in March 2022 has been invested in real estate properties whereas bank deposits and gold are distant second and third most preferred asset investment options among Indian households.

As per the Jefferies findings, out of $ 10.7 trillion Indian households assets in March 2022, whopping 49.4 per cent have been invested in real estate properties whereas 15.10 per cent went to band deposits 15 per cent of the Indian households savings were invested in gold. Impact of Covid-19 pandemic was also visible in this Jefferies report as Indian households invested 6.20 per cent of their net savings in insurance funds and it was fourth most preferred investment option by Indians.

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Photo: Courtesy Jefferies

Provident funds and pension is at 5th spot after receiving 5.70 per cent of $10.70 trillion Indian households savings in March 2022. Despite heavy FIIs selling at Indian equity markets, DIIs have remained net buyers since October 2021. However, in Jefferies report, equities has received 4.80 per cent of the net Indian households savings in March 2022 and it is 6th most preferred investment option among Indians. As Indian households has a habit of keeping some part of its savings in liquid form. 

Jefferies report has a mention about it as well. As per the Jefferies findings, 3.50 per cent of the net Indian households savings in this period has gone to cash or liquid segment and it an obvious least preferred option among the Indian households.

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HomeFirst Home Healthcare secures investment from Fulcrum – PE Hub

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Harpeth Ventures also participated in the investment.




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