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Notes to the applications
App 01: Stocks vs Bonds Back to top This application allows a user to enter assumptions for a bond and an equity holding of equal term, and then to compare the NPV of the two investments. In contrast to bonds, equity holding income streams may be decoupled from inflation risk, and the user has the ability to choose an appropriate dividend growth rate. However, recent articles in the FT have suggested that it will be expectations of equity capital gains which will drive a widespread flow of fundsfrom bonds to equities. Please see the relevant blog for details. The application has the facility for the user to specify what level of capital gain might be expected from the investment. Also, should the investor feel that he is subject to a risk of capital depreciation, the application allows him to manually change the dividend income he might require to compensate for this risk. Please click on the below button to activate the application. |
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