The safest investment in the United States has a minefield! Investors must read the guide
In the world of financial investment, security and stability are often the two most important factors that investors value.
However, the recent sudden collapse of the highest credit-rated investment product in the United States has sounded the alarm for investors.
This rare event not only reveals the unpredictability of the market, but also exposes the hidden risks of even the safest investments.
Let’s focus on specific cases of explosions.
Take Elizabeth Finance 2018 as an example, this commercial mortgage-backed security has been in default since XXXX.
Recently, its special servicer MountStreet accepted a cash offer of £35 million to dispose of the Maroon property portfolio collateral, with an expected net proceeds of approximately £31.5 million, which is lower than the principal balance of Class A notes of £33.6 million, resulting in possible losses for Class A note holders.
In another case reported by Barclays, buyers of the AAA portion of $308 million in notes backed by a mortgage on a building on Broadway in midtown Manhattan lost more than 25% after selling the loans at a steep discount.
These events reflect possible deep-seated problems in European and American financial markets.
Analysts point out that even investment products with the highest credit ratings are no longer safe, and the decline in the value of commercial real estate may be more severe than the market expects.
Data from KBRAAnalytics shows that as of March this year, about US$52 billion (about RMB 380 billion) of office loans in the United States' commercial mortgage bonds were in trouble, accounting for 31%, and this proportion has increased by 16% from a year ago.
Faced with such a market environment, how should we, as individual investors, respond? The first strategy is to make reasonable asset allocation.
By incorporating different asset classes into the portfolio, the sensitivity of the portfolio can be effectively reduced when the market fluctuates greatly.
In addition, investors need to include some risk-return characteristics between stocks and fixed income in their family assets, such as commodities, insurance, etc. This can not only help us better cope with market volatility, but also bring additional stability to investment.
It is crucial to adhere to the principle of long-term value investing.
Benjamin Graham once said: “The market in the short run is a voting machine, in the long run it is a weighing machine.
"This means that although the market may fluctuate in the short term due to various factors, in the long run, the fundamentals and intrinsic value of a company are the key to determining its stock price.
Therefore, investors should focus on finding undervalued assets or stocks to achieve long-term investment returns.
In the face of market uncertainty and the impact of personal emotions, it is very important to remain calm and rational.
A long-term optimistic attitude, a diversified investment portfolio and a clear risk management plan are effective ways to help investors weather market fluctuations smoothly.
In addition, the fixed investment strategy, as an effective investment method, can help investors build positions in batches and smooth costs, thereby reducing the risks brought about by wrong decisions.
The sudden collapse of the highest credit-rated investment product in the United States reminds us that even the seemingly safest investments have hidden risks.
As investors, we need to avoid risks and seize opportunities through reasonable asset allocation, adherence to long-term value investment principles, and maintaining a calm investment mentality.
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