Bonds are not a real alternative in 2018. As rising interest rates depress prices, a sizaeble interest rate level should be awaited.

At some point it had to come. The recent collapse of stock markets just after the fifth week of the year raises the question of whether bonds in 2018 will rise again from the ashes.

When the rally of stocks comes to an end, actually offers a switch to interest rate securities. But first, a few cloudy days are a long overdue correction if necessary. And secondly, even 2018 bonds are not yet a real alternative.

Bonds remain 2018 not a real alternative

As an investor, you should wait until a decent interest level is reached again. After all, bonds are subject to their own dynamics: an increase in interest rates depresses the price of the outstanding securities. This can be more frustrating than offsetting stocks.

In any case, given the recent slump, the outlook for an unscheduled rate hike by the US Federal Reserve played a role. The reason for this was the unexpectedly pronounced wage growth in the USA. In order to counteract escalating inflation, interest rates are usually raised. But if money and credit become more expensive, this slows down economic growth. Higher interest expenses and wages are also denting corporate earnings. ... 

That blackheads, depending on their appetite, leave less of the roast, is known. The same logic applies to asset accumulation. Until all participants have used commissions, there is hardly anything left in life insurance , for example .

Fund managers are also picking up stocks , which is why actively managed funds cost on average almost 2% of the investment amount per year. On average, 0.44% are passive ETFs that simply track the performance of an index. And worse, the index funds also do not fare well. For this they save over the years a few thousand dollars of unnecessary costs.

Which ETF to buy?

In general, ETFs are the better choice. But which ETF should you buy now? The agony of choice results from the fact that they are affordable for every budget. As a savings plan you can already pay $20 a month. With an annual return of 6%, even the small amounts after 30 years at least $19,585.

Anyone who now decides which ETF they should buy, could initially orientate themselves on this brand: The MSCI World with more than 1,600 companies, so to speak, from the global economy and came to its current level since 1970 on an average increase of about 6.8% per year. Thus, the aforementioned savings income is more in the range of $20,000. ... 

Bonds have moved into the background with the long- running equity market following the recent financial crisis . But the wind is spinning and interest rates are slowly starting to rise again.

Even though yields may be lower, safe bonds stabilize the deposit. That risk and return can be seen in the context of an overall portfolio, since the portfolio theory of Harry Markowitz .

Bond ETFs in demand like never before

When searching for matching papers in a huge supply is troublesome, bond ETFs are an easy alternative – with the lowest possible fees and risk diversification across multiple bonds traded in an index tracked by the particular bond ETF. The principle is the same as index funds on equities, except that it is based on a bond index.

The large number of securities already creates a broad spread of risk in a fund. Therefore, it does not bother if there are some higher-risk, higher-yielding stocks that improve overall performance. Especially global bonds can score ETFs here. After all, interest rates are much higher in many countries than in Germany. Especially bonds from emerging markets have been able to score for some time. ... 

Many investors just look at the price of a stock.

But the market is just what you pay for.

The value is what you get.

For a company whose market value has risen sharply in the past, many consider it expensive, a stock that has fallen for a bargain.

The question must always be: What do I get value for the price?

What is the intrinsic or true value of a company and what price is paid on the stock market for the company? This difference is of great importance to value investors.

Even top companies sometimes have problems.

The stock market then tends to “punish” these companies disproportionately.

These situations have often been very good buying opportunities in the past, because top companies usually overcome their problems and emerge stronger from crises.

It also happens that companies improve their earnings and earnings year after year, but the market ignores the ever-improving starting position.

The stock is thus always cheaper at unchanged price relative to their value.

What do you have to do if you want to trade in the value principles of Buffett, Graham? You need to know what quality means in a company and how you can specifically determine that. ... 

Anonymous, secure, super fast transactions – Crypto-currencies like Bitcoin, Ethereum or Ripple fascinate as an alternative, which is only possible through the underlying blockchain technology .

Its decentralized structure overcomes classical boundaries. So transactions in a network run directly from computer to computer. They are logged throughout the network. Who is behind it is unknown.

For Buffett, Bitcoin’s rat poison

While many talk about “currencies and payment systems of the future”, star investor Warren Buffett is not very good at Bitcoin. He recently repeated this at the shareholder meeting of his investment firm Berkshire Hathaway .

Buffett considers the Bitcoin hype to be a speculative bubble and says, “It must inevitably lead to a nasty end.” He spoke of unproductive fortune that attracts charlatans and does not create value. In a subsequent TV interview, he added, “Bitcoin buying follows the bigger fool’s theory, it’s just about finding someone who pays even more.” Buffett’s conclusion: “Bitcoin, that’s rat poison.” ...