01/01/2004
The government budget deficit will reach $500 billion next year (on top of $374 billion in fiscal 2003), according to estimates by the U.S. Office of Management and Budget. The Federal Reserve says this could push interest rates on 10-year bonds up by as much as 1 percent. If the government remains unable to balance its books, what does it mean for my fixed income investments?
Russia’s partial nationalization of oil giant Yukos and the arrest of its president have cast a pall over commercial opportunities there. Should I still invest in this fast-growing economy? If so, how can I hedge my exposure?
M&A is back in fashion; the deal drought came to an end in October with several large transactions including Bank of America’s $47 billion offer for FleetBoston. If this turns into a long-term trend, should I be investing in risk arbitrage hedge funds to take advantage of the M&A renaissance?
Energy trading companies’ long spiral downward may be slowing. Credit rating agencies such as Standard & Poor’s are still downgrading these troubled companies, but at a slower rate than in the past. However there is a glut in the U.S. electricity market that may take years to balance out. What are the prospects of investments in the energy sector?
Fractional aircraft ownership firms such as CitationShares and Delta AirElite are now offering hourly rental programs. Does it make more sense to buy a fractional share or rent by the hour?
If aircraft rental programs continue to proliferate, will it depress the value of my existing fractional ownership share in an aircraft?
Private equity returns in the second quarter of 2003 improved after the first quarter’s disastrous performance (an annualized loss of 6.9 percent, versus the first quarter’s loss of 15.5 percent, according to the National Venture Capital Association). The stock market’s rebound could aid the performance of private equity funds. Should I reevaluate my exposure to private equity?
The outlook for my gold investments is unclear after revelation that the third-quarter 2002 U.S. GDP grew by 8.2 percent, the fastest pace since 1984. Will gold prices fall as signs of an economic rebound accumulate?
As the scope of the mutual fund trading scandal widens to engulf market leaders such as Putnam, will the Securities and Exchange Commission’s investigation, or the sanctions it may impose, affect my managed accounts?
Regulation of hedge funds seems increasingly likely. Securities and Exchange Commission Chairman William Donaldson has made SEC registration of both U.S. and foreign hedge funds one of his priorities, and the issue has gained momentum from the late-trading scandals. What could it mean for my hedge fund or fund of funds investments? Should I reposition my hedge fund investments in any way to minimize the fallout?