When Ian King expresses his views on the stock market, bonds, cryptocurrencies and any topic related to finance, smart investors listen. His experience covers more than 20 years as a hedge fund manager. Plus, Ian King is a professional cryptocurrency trader who frequently engages in analyzing a wide array of financial markets. According to Ian, the United States stock market has been experiencing a bull market for the past decade. For example, the S&P 500 rose 291 percent during the previous 10 years.
However, the bond market is poised to give stock market investors reasons to pull out of their stocks and invest in bonds. Analysts expect that Jerome Powell, the newly elected Chairman of the Board of Governors of the Federal Reserve System, is determined to raise interest rates another 25 basis points on the next meeting that is to take place in June 2018. The current federal interest rate is 1.75 percent. A raise of 25 more basis points means that the interest rate will rise to 2 percent.
Bonds offer a Breath of Fresh Air to Investors
Ian King believes that bond investors welcome the changes. His position as senior analyst at Banyan Hill Publishing gives him the knowledge and experience to write about significant events concerning stocks, bonds and cryptocurrencies. According to Mr. King, bond investors rely on dividends. Bonds are relatively safer investments than stocks. Investors who are heavily invested in bonds, or mutual funds containing bonds, can still realize gains via their reliable dividends regardless of the stock market’s volatility in a downward direction. When the Fed raises interest rates, bonds are expected to achieve higher yields. The higher yields are attractive to investors who fear they will lose excessive amounts of money while the stock market plunges.
Bonds Continue to Gain in Popularity
Bond yields have risen during the previous year. Investors who are worried about their investments in stocks may welcome changes in their investment portfolios. Investors need to take advantage of opportune moments and cycles. With a history of reliability that existed before the stock market was ever invented, bonds have served investors favorably over the years. People who have invested in bonds during all sorts of investment environments have not suffered the kinds of tremendous losses experienced by overly aggressive stock investors. Higher interest rates and bond yields are attractive alternatives to investing in stocks.
TINA and the No Alternative Mindset
Investors may wonder what the term TINA means. In fact, TINA is not an official investment term. Instead, the so-called word is an acronym that stands for “there is no alternative.” Originally coined by the Victorian intellectual Herbert Spencer, the term was later adopted by the British Prime Minister Margaret Thatcher, who was known for her conservative viewpoints. Today, TINA signifies to investors that there is no real alternative to investing in stocks. Investors have been thinking that there is no alternative during the past few tumbling stock market cycles. They feel that it is impossible to attain better returns on their investments. However, the current interest in the bond market may make the prevailing TINA view an obsolete acronym.
According to Mr. King, a financial guru who began his career as a desk clerk in the mortgage bond trading department of Saloman Brothers, investors need to know about the Fed’s quantitative easing policy. Adopted by the Fed several years ago, quantitative easing (QE) was created to purposely make bonds unattractive investments. The Fed hoped that investors would flock to riskier stocks. Former Fed Chairman Ben Bernanke hoped that elevated stocks, and their rising returns, would influence people to spend greater amounts of money.
Fed Chairman Bernanke reasoned that the economy would improve when consumers were willing to spend the money they made on their stock investments. Interest rates plunged across the globe and investors applied the TINA philosophy to the stock market. Bond prices continued to rise. However, bond yields declined to lower levels. Although there have been historical exceptions to the general rule, bond yields traditionally drop when bond prices go higher and yields rise when bond prices drop.
A New Acronym for Investors
In response to his view on the current potential of the bond market, Mr. King has suggested the creation of a new acronym called BAAAA. The acronym stands for “bonds are an alternative again.” Ian has taken his financial wisdom to a new level for investors. His belief that bonds are a viable alternative today may cause TINA supporters to feel uncomfortable. However, the fact is that investors can always find alternatives. The TINA philosophy is a dismal viewpoint that purports to throw stock investors into tizzies at the mere thought of investing in alternative investments. While bonds continue to attract investors because of the improved yields and dependability, people can also explore the new cryptocurrency world.
From Stocks and Bonds to Cryptocurrencies
Mr. King has the expertise in cryptocurrency trading to help investors understand the underlying strategies that increase wealth. While it is true that money does not grow on trees, profits may increase for brave people who dare to get their feet wet by investing in cryptocurrencies. Ian King has expressed his view about investing in the cryptocurrency market as follows:
“Eventually, I needed to walk away from the excesses of Wall Street, as I grew tired of making rich people richer. This led me to venture investing, where I discovered cryptocurrencies, the perfect blending of early stage investing and trading. Now I’m excited to bring that strategy to Banyan Hill Publishing as their crypto expert — letting readers in on the massive gains just waiting for those who have the right system in place.”
According to Ian, many people have failed to reap profits because they shied away from investing in the stock market. Ian King believes that every person has an equal chance to invest in cryptocurrencies and discover exciting investment opportunities. Perhaps future investors will celebrate cryptocurrencies as joyfully as previous investors celebrated the rise of technology stocks.