David Shen’s Post

#FinanceInterviewQuestions: 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐫𝐢𝐬𝐤 𝐟𝐫𝐞𝐞 𝐫𝐚𝐭𝐞 𝐢𝐧 𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧𝐬? 𝐉𝐨𝐢𝐧 𝐦𝐞 𝐟𝐨𝐫 𝐟𝐢𝐧𝐚𝐧𝐜𝐞 𝐤𝐧𝐨𝐰𝐥𝐞𝐝𝐠𝐞: https://lnkd.in/d73qREpc Risk free rate is the 𝟏𝟎 𝐲𝐞𝐚𝐫𝐬 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐛𝐨𝐧𝐝 𝐲𝐢𝐞𝐥𝐝, which is the safest investment an investor can make. The risk-free rate of return is the interest rate an investor can expect to earn on an investment that carries zero risk. There are two types of risk free rates 𝐑𝐟: Nominal risk free rate and Real risk free rate. A nominal interest rate refers to the total of the real interest rate plus a projected rate of inflation.  𝐑𝐞𝐚𝐥 𝐑𝐢𝐬𝐤 𝐟𝐫𝐞𝐞 𝐫𝐚𝐭𝐞 = 𝐍𝐨𝐦𝐢𝐧𝐚𝐥 - 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐥𝐨𝐧𝐠 𝐭𝐞𝐫𝐦 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 Which type of risk free rate should be taken depends on the cash flows which we are discounting. If cash flows are projected in nominal term, then risk free rate should be nominal risk free rate and visa versa. #followme #projectfinance #riskanalysis #investmentbanking #equityresearch #oilandgas #financecareer

As inflation trends towards the 2% target, what’s next for Canadian markets? Explore the key factors in our latest blog, including major energy projects, that could influence growth in the coming months. https://ow.ly/yqpk50TkZTT #CanadianMarkets #Investing

Floating rate instruments offer higher yields and diversification benefits in a high interest rate environment. This blog discusses 3 unique ways to invest in the floating rate market: https://bit.ly/4fmzADx

As we face the #climatecrisis we need vision and innovation. That kind of thinking could transform the financing landscape and fast track the energy transition. Sadly it's not forthcoming from the International Monetary Fund's shareholders. Particularly Germany, Switzerland, and Saudi Aradia. You can read more here from Center for Global Development's Mark W. Plant https://lnkd.in/eCDX_qUD

A bond index or bond market index is a method of measuring the investment performance and characteristics of the bond market. There are numerous indices of differing construction that are designed to measure the aggregate bond market and its various sectors (government, municipal, corporate, etc.) A bond index is computed from the change in market prices and, in the case of a total return index, the interest payments, associated with selected bonds over a specified period of time. Bond indices are used by investors and portfolio managers as a benchmark against which to measure the performance of actively managed bond portfolios, which attempt to outperform the index, and passively managed bond portfolios, that are designed to match the performance of the index. Bond indices are also used in determining the compensation of those who manage bond portfolios on a performance-fee basis.

Oil ended the month in red as concerns of demand slowdown in U.S. and China overshadowed growing Fed rate cut hopes. To know more, download our insights on the global and regional markets. https://lnkd.in/gnjgJ3MG #GCC #GlobalMarkets #CapitalMarkets #GCCmarkets #Equities #Kuwait #EmergingMarkets #DevelopedMarkets #Oil #MENA #FED #Policyrate #MarmoreResearch #markaz

How has TAA (tactical asset allocation) performed during past episodic eras of rising/falling interest rates (and the same question for inflation) This was the topic of my webinar this morning Here is the write-up of that webinar in text format

The worse inflation gets, the stronger infrastructure assets’ inflation protection becomes. During episodes of high inflation, infrastructure assets are not only able to increase their returns more than other equities, they can also do so with less volatility. 🔎 Discover how private infrastructure and energy assets outperform listed stocks during episodes of inflation in our latest research: 𝗣𝗼𝘄𝗲𝗿𝗶𝗻𝗴 𝘁𝗵𝗿𝗼𝘂𝗴𝗵: 𝗘𝗻𝗲𝗿𝗴𝘆 𝗶𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗮𝘀𝘀𝗲𝘁𝘀 𝗮𝗰𝗿𝗼𝘀𝘀 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻𝗮𝗿𝘆 𝗰𝘆𝗰𝗹𝗲𝘀. 👉 https://lnkd.in/dmiuzQhY #InvestmentInsights #EnergyInfrastructure #Whitepaper #InflationProtection

Watch my latest ALINE WEALTH Market Road map where I dive into: -The 3 D's: 1. Deglobalization 2. Decarbonization 3. Deficit Spending -Market Internals: Housing Sector, Valuations, S&P PE Ratio -Opportunities: Energy, European Stock, Water https://lnkd.in/g5jPrehu #marketconditions #theeconomy #inflation #debt

The Results Are In, Still Too Early To Call: First half 2024 results are in; the clear winners: metals, oil, and equities. Losers include Euro sovereign debt, UST thus far on the year, with ag commodities (i.e., corn, soybeans) and lumber sharply lower. The AI boom drove the Tech sector, lifting S&P 500 as forecast for energy usage is driving base metals higher. Electricity/power plants/battery components represent critical infrastructure for the grid to fulfill AI. S&P 500 Earnings are expected to surge 10% in 2H of 2024, supporting high valuations. Higher for longer & big government deficits led to weak performance fixed income debt instruments in 1H, sadly whoever is elected to office, this dynamic appears to remain on course. Credit is King as it continues to perform well led by leveraged loans and structured credit on the public side. It is simply remarkable how strong credit is performing, as coupon clippers rejoice. There are no guarantees in life, especially when it comes to investing, yet the one sector that has proven so consistent is Private Credit, with 10%-plus IRRs the base case for most allocation models. What sectors do you expect to perform best in 2H 2024?