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What happens to bond prices if interest rates rise, and the latest Co-Op news.

If interest rates rise, what will typically happen to bond prices? That was a question posed to 30,000 US adults according to a report in the FT today. I would hope readers of this blog know the answer because it is quite important now that QE might be tapering off and interest rates rising. Only 28% got the answer right, which is of course that bond prices will fall. People buy bonds in the belief that they are “safer” than equities. It ...

Trusting the regulators? You should not.

The recent case of Catalyst Investment Group highlights the fact that sensible investors should not rely on the financial regulators to warn them about dubious investments and those who promote them. Indeed so far as the FCA, and its predecessor the FSA, is concerned, the fact that a business is regulated by them does not necessarily mean they are trustworthy at all. All it means is that they have met the regulatory requirements at some point in the past.The recent outrageous ...

Royal Mail IPO – the wrong kind of encouragement

There was a very intelligent letter in the FT today from a Dr Alex May. To quote: “I fear the sale will distort public perception of investing in shares”. It went on to suggest that it would mislead people into believing that making money in shares was easy, and implied it would encourage speculation rather than sound investment in a portfolio of shares. Even more astonishing was the revelation on the front page that some investment banks valued it at nearer the ...

Renishaw Profit Warning

No sooner had I completed an article for the latest ShareSoc newsletter on the wisdom of fund manager Harry Nimmo, with whom I had discussed Renishaw at the Standard Life UK Smaller Companies AGM, than moments later the former company issued a profit warning. Yes Renishaw issued an Interim Management Statement this morning which indicated revenue for the 3 months ending 30th September would be down from £92.2m to £75.2m compared with the prior year. The Far East, specifically China, was particularly ...

Royal Mail flotation – private investors losing out both ways

Some ShareSoc members are very disappointed that they will not get any shares in the Royal Mail flotation because they subscribed for more then £10,000 worth. These are my personal comments: This seems to be discrimination against the moderately wealthy and those who just happened to have some spare cash in the bank.  Either everyone should have got the same allocation of £750 of shares, or there should have been a graduated scaling back. It's just illogical. What is being done is that ...