• 26Feb

    Measures of Obama in the U.S.

    Finance No Comments
    Obama In EeuuAprobado measures in the plan this week to save the U.S. economy and reactivate it with billions of dollars, President Obama also seeks to help those who have most suffered the brunt of these economic problems.
    I mean those who are in a delicate situation with their mortgages in the sense that they can not be paid.

    So the U.S. government, with its brand new president has announced a plan of 75 billion dollars (59.537 billion euros) in aid for the mortgage. Are no less than nine million households that will benefit from this plan to try lightening your mortgage.

    Specifically are 4 million home owners who may keep their homes thanks to this support and 5 million will be given the opportunity to refinance their debts.

    The mortgage company Fannie Mae Freddie Mac, largely financed with public money will act as collateral for these transactions. But as a way to give more reliability to the process has increased involvement with public money by buying shares by the Treasury and I also wanted to give more flexibility to the process.

    More than 200 billion dollars have been acquired in preferred shares by the Treasury to increase the size of real estate portfolios to 900 billion dollars.

    Has been secured from Obama that this is the beginning of the end of the crisis in that country. This measure is expected to increase the value of the home and invigorate the building sector as the engine of the economy.

  • 22Feb

    Real yields in the U.S. (1900-2009)

    Economy, investment No Comments

    John Auters writer for the Financial Times shows the actual performances (which offset the effect of inflation) in assets available for investment in the United States from 1900 to 2009.

    In this interesting chart we can see how the equity market shares or assets that are more historical yields have offered a 6% year on year. Although it is a very good performance in terms of dollars, it is important to note that this rate corresponds to the change in share price plus reinvestment of dividends to be paid over time. Moreover, if we look at the gray line of the chart, notice the simple appreciation in stock price, has they have surrendered so interannual just 1.7%. Here the importance of the reinvestment of dividends and the power of compound interest. The red line shows the real yield on bonds or fixed income market, which includes everything that is corporate debt, with a 2.1%, and finally the American Treasury notes up to a 1% real return, which Obviously by being classified as instruments of lower probability of default in the world.

    From this graph we can obtain three key findings.

    • The long-term investors perform better in terms of performance and decrease the volatility of their investments.

    • The need to reinvest the dividends received by our assets to achieve optimal results.

    • The long term has had the ability to overcome all the crises of the last century as much of this.

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