5 March 2019 FT — Articles to Read

5 March 2019


Question: According to seven (7) dumb mistakes that cost homebuyers tons of money?


Investors urge debt-bloated US companies to shape up – Pg. 19

–          Growing debt piles have fed fears among investors that if companies do not start to get a grip on their borrowing, worsening economic conditions could imperil their ability to fund themselves.  That could potentially send credit ratings even lower, into the junkyard of “high yield”

–          With borrowing costs low, companies have used debt to buy back stock and pay higher dividends.  But as attention turns to reducing leverage on balance sheets, analysts warned that some of the equity-friendly activity could slow

–          …some companies rated triple B- the lowest rung of investment grade – …

–          High-yield bond investors are also mindful of the risks of these companies failing to reduce their debt and potentially being downgraded further, especially if the economy begins to slow more quickly than expected


Chinese stocks rally as congress pledges stimulus measures to combat slowdown – Pg. 19

–          Chinese stocks surged to a nine-month high yesterday as the country’s annual legislative session got under way and investors anticipated more measures from Beijing to combat a slowdown in growth for the world’s second-largest economy

–          The latest leg higher for Chinese equities also follows on the heels of MSCI’s decision to quadruple its Emerging Markets index’s exposure to companies that are listed in mainland China.  The decision will compel passive investors to increase their exposure to reflect the benchmark, which is tracked by some $1.9tn of assets globally


Answer: (1) Ignoring your credit score; (2) Not getting preapproved for a home loan; (3) Falling for the wrong type of loan; (4) Going without an agent (Prof Note: One of the lessons I have learned in life, when negotiating contracts, always place an expert, that you are paying, between you and the counter party.  It makes life so much easier and more pleasant.  Also, when the right expert is hired, they will pay for themselves in lower transaction costs); (5) Buying based on emotion; (6) Skipping an inspection; (7) Forgetting to have backup plan