Money Street

I wanted to share a clear picture of where capital has flowed in US markets so far this month. We’ve seen long-term mutual funds experience net outflows, with equity strategies bearing the brunt: domestic equity funds shed approximately $15.4 billion, while world equity lost around $2 billion. Hybrid funds also saw redemptions of about $1.3 billion as investors sought to reduce exposure, but bond funds received a modest boost of just over $1 billion, split between taxable and municipal debt. ETF flows have mirrored these patterns, with broad-based equity products seeing withdrawals and fixed-income ETFs attracting new money. The divergence suggests that, even as some investors remain wary of stock valuations and the Federal Reserve’s next moves, there’s still a search for income in the bond market. At the same time, hybrid investors appear to be prioritizing liquidity over risk, perhaps bracing for volatility around upcoming rate decisions and the start of earnings season. Looking ah...

I won’t sugarcoat it: the US market is still vulnerable to another sell-off. We’ve seen job growth slow more than expected, with unemployment claims ticking up and hiring activity at levels not seen since 2020. When consumers feel less secure about their paychecks, they tighten their belts—and corporate revenues often follow suit. Earnings reports paint a similar picture. While a handful of blue-chip companies continue to beat estimates, most firms are grappling with squeezed margins. That disparity means any disappointing outlook from even one major player can trigger a wave of profit-taking across the broader market. On top of that, inflation remains stubbornly above the Federal Reserve’s 2 percent goal. Higher import tariffs have pushed cost forecasts back to early-2024 territory, forcing businesses to either accept lower profits or pass rising costs on to customers—neither option inspires confidence in growth prospects. Valuations don’t help, either. The bulk of recent gains has ...

Aggressive investors seeking higher returns are increasingly turning to leverage —the strategy of borrowing funds to boost market exposure—triggering debate about its long-term viability and behavioral pitfalls. Drawing on insights from Ben Felix’s Common Sense Investing podcast, academic research, and industry data, this report examines how leverage can amplify gains, why young investors may benefit most, and what pitfalls to avoid. What Is Leverage and How Does It Work? Leverage occurs when investors borrow capital to invest more than their own equity. For example, using $100,000 of personal capital and $100,000 in borrowed funds to buy $200,000 worth of stocks at a 10% return can yield $20,000 in profit—double the gain of an unleveraged position. However, losses are magnified in the same proportion, and a 50% market drop can wipe out all equity and leave investors owing additional money. Why Young Investors Are Turning to Leverage Financial psychologists Dr. Ian Ayres and Profess...

India’s electricity ecosystem is on the cusp of a major transformation as the power distribution equipment industry cements its place as the country’s newest “sector king.” Fueled by surging demand, aggressive renewable targets, and rapid technology adoption, this segment is emerging as the linchpin of India’s power story. From Generation to Your Home: Sector Snapshot The electricity value chain breaks down into three pillars: Generation : Coal, gas, hydro, wind and solar plants (players: GE, Siemens, Suzlon, Adani, Tata Power) Transmission : High-voltage lines spanning states (players: KEC International, Transtel, Kalptaru) Distribution : The last mile – substations, transformers, switchgear, cables, smart meters While generation and transmission have long dominated headlines, it’s the “last mile” of distribution where the biggest growth is now unfolding. Modern substations, IoT-enabled switchgear, and millions of smart meters form the backbone of a smarter, more reliable grid. Why ...

HAL (Hindustan Aeronautics Limited) presents a compelling case in corporate finance: high financial leverage without any traditional debt . In this breakdown, we’ll explore how HAL’s unique business model uses contract liabilities like customer advances to create leverage, and what this means for its financial health and investor appeal. What Is Financial Leverage? Financial leverage measures how much of a company’s assets are funded by liabilities, including both debt and non-debt obligations. Traditional leverage involves loans or bonds, but companies like HAL show that leverage can arise without borrowing . Example: Company starts with ₹100 equity Borrows ₹100 to buy assets worth ₹200 Leverage = Assets / Equity = 2x More borrowings = higher leverage. But what if there’s no borrowing? HAL’s Leverage Without Borrowing HAL doesn’t rely on loans, yet it maintains a high leverage ratio . Here’s how: HAL manufactures defense and aerospace systems based on pre-orders. Customers (often...

The first quarter of the year showed that the average price of houses sold in the U.S. topped $500,000. This raises a key question for potential buyers: "Can I afford that?" Understanding affordability, housing costs, and strategic tips for entering the market is essential today. This summary draws on advice from financial experts, real estate agents, and mortgage pros to explore realistic housing budgets, hidden expenses, and smart buying tactics. The rule of thumb is that no more than 30% of gross income should go to housing, which includes mortgage payments, property taxes, insurance, and other costs. For someone earning $100,000 annually, that's about $2,500 per month. However, expenses like maintenance, utilities, and private mortgage insurance (PMI) often push the total higher. Over the past five years, median home prices have surged by roughly 40%, with averages now over $320,000—and first quarter numbers exceeding $500,000. Hoping for falling interest rates may ...

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