The most crucial quality for investors, according to the author who has 20 years of investing experience, is judgement. Discernment is the capacity to correctly evaluate unclear situations in which there is no obvious solution. While it’s generally a good thing to be patient, discernment implies recognizing when it could be appropriate to be impatient, such as during rare crisis opportunities. However, acting hastily might sometimes be dangerous. In order to gain the judgment to strike a balance between qualities like patience and risk-taking, the author contends that discernment comes through personally experiencing bull and bear markets over a long period of time. The best method for investors to learn is to experience the emotional ups and downs of the market.
The SEC approved new rules to increase transparency and reduce fees charged by private equity and hedge funds. In a 3-2 vote, the Securities and Exchange Commission passed sweeping regulations overhauling how these firms deal with investors. The rules represent the biggest challenge to the industry in over a decade and aim to drive down costs for the funds’ investors. Major firms like Blackstone, Apollo Global Management, and Citadel will have to comply with the new transparency and fee requirements. If implemented, the changes could reshape the relationships between private equity groups, hedge funds, and their investor clients. The rules are a victory for investor advocates, who have long argued that the current practices keep shareholders in the dark about costs. Overall, the new SEC regulations are intended to give investors more visibility and potentially save them billions in fees each year.
China is facing an economic slowdown as its traditional stimulus playbook of boosting infrastructure and real estate spending has lost effectiveness. Heavy debts have reduced the ability to spur growth through increased borrowing. The property sector, which accounts for a large portion of the economy, is in crisis as home sales and construction have plummeted following the defaults of many real estate developers. Stimulus measures like lower mortgage rates have had limited impact due to falling demand. Cutting interest rates further could help but may also lead to capital outflows, putting pressure on China’s currency. The article notes that this is a major challenge for Chinese policymakers, as exports alone cannot replace domestic spending as an engine of growth.
European markets are adopting a form of derivatives trading known as “zero-day” options, similar to the ones that have gained popularity in the US. Eurex, operated by Deutsche Börse, is launching daily options linked to the Euro Stoxx 50 equity index. These options expire on the same day they’re purchased, enabling traders to capitalize on events like economic data releases, earnings reports, or monetary policy meetings. The rapid growth of such options in the US has raised concerns about increased market volatility and late-day sell-offs. Eurex’s move is in response to customer demand, with the hope that it will stimulate growth in the European options market. However, experts believe the impact might be less pronounced in Europe due to the lower popularity of options trading there, especially among retail investors. The surge in short-term options is attributed to uncertainty surrounding global central banks’ interest rate policies.
https://www.axios.com/2023/08/23/commonstock-yahoo-social-investing-platform
Yahoo has acquired the social investing platform CommonStock to boost engagement in its finance products. CommonStock allows users to link their brokerage accounts to share portfolio performance and discuss trades with friends in real time. It had raised $34 million from prominent investors. Yahoo will integrate CommonStock into its free and subscription Yahoo Finance offerings to provide a community for retail investors to get insights from others. The acquisition gives Yahoo Finance users an extra filter of trusted opinions and expertise from fellow traders. It represents Yahoo’s first acquisition under new owner Apollo Global Management as it focuses on growing its core assets like Yahoo Finance. CommonStock’s CEO said the combination of Yahoo’s reach and CommonStock’s retail investment communities creates a powerful platform.