WSJ: What Is a Basis Point and Why Is It So Important?

By SIMON CONSTABLE

Investment professionals regularly refer to "basis points" when discussing things like bond yields and mutual funds.

In the bond market, if the yield of a Treasury note rises to 1.05% from 1% it is said to have moved by five basis points or, as some abbreviate it, five "bips."

Why does this seemingly tiny unit of measure—one basis point is equal to one one-hundredth of a percentage point—get so much attention? It's pretty simple: Basis points can add up to a lot of money for both individual investors and institutions. See original story here.

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WSJ -- Rand Paul: Don’t Give F-16’s to Egypt

By SIMON CONSTABLE

F-16 Warplanes

US Air Force, Public domain, via Wikimedia Commons

WSJ: Coupon Clipping Explained

By SIMON CONSTABLE

When you hear people talk about coupon clipping—that is, in an investment context—they typically mean they are collecting the interest payments from bonds.

These days bond interest payments are handled electronically, so there is no need for anyone to actually get the scissors out.Coupon clipping refers back to a time when these fixed-income securities came printed with coupons on them. To receive the interest payments, the bondholder would clip off each coupon as its payment came due and redeem it for cash. See original story here.

Barrons: Why Sunspots Will Warm Natural Gas Market

By SIMON CONSTABLE

A decline in the number of spots on the sun could warm up the market for natural gas.

These spots, which scientists have observed for centuries, are caused by changes in the magnetic fields on the solar surface, the National Aeronautics and Space Administration says. Scientists aren't sure why, but when the number of visible spots declines, temperatures on Earth tend to be lower. This matters for investors because the sun is entering another period of fewer spots.

You can profit from this situation if you focus on two things. See original post here.

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WSJ: What Are Doves and Hawks?

By SIMON CONSTABLE

When you hear finance people talking about doves and hawks, they usually aren't referring to our feathered friends. Most often they are describing the attitude of Federal Reserve policy makers toward inflation.

The Federal Reserve, aka the central bank of the U.S., has two mandates: full employment and a stable price level (i.e., low inflation). This dual mandate creates a tension—and a balancing act—because actions that focus on one side can worsen conditions on the other. See original post here.

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WSJ: U.S. Oil Boom is Bad News for Tanker Business

By SIMON CONSTABLE

The approach of U.S. energy independence has becalmed an important part of the global maritime industry: the business of hauling crude oil across the oceans. What’s worse for investors is that the trade winds likely won’t pick up any time soon. See original post here.

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WSJ: What's the Difference Consumer Staples and Durables

By SIMON CONSTABLE

Stock strategists often talk about two groups of companies that sell goods to individuals: makers of "consumer staples" and makers of "consumer durables."

They sound similar but are in fact completely different in ways that matter to investors.
Consumer staples are the goods you buy for immediate, everyday use—like shampoo, toothpaste and soap. See original post here.

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