I started my journey in financial modeling around 20 years ago when I purchased the late Simon Benniga’s classical book “Financial Modeling” second edition. I went through this book chapter by chapter and replicated the exercises in Excel and even reached out to professor Benniga to get access to the…

2022 has been a rough year so far for investors as most asset classes lost value. The classical conservative asset allocation of 60% bonds and 40% stocks has broken down as the correlation between most asset classes is now positive, offering little diversification. In previous equity bear market cycles, US…

The Fed Funds Target rate (upper bound) sits at 50 bps and is expected to go up by another 50 bps today to 1.00%. In general, the market is expecting the Fed Funds Target to reach around 3.00% …

In a prior post , I noted the increased correlation between Bitcoin and Ethereum with the NASDAQ 100 Technology Stock Index and mentioned that this may reduce diversification benefits of holding cryptocurrencies. Historically, one generally sees correlations of risk assets increase during times of uncertainty and stress and this was…

Historically, banks tend to lag when repricing deposit rates after the Fed has increased the policy rate. This tends to be more true for retail consumer deposits than for corporate deposits since institutions (i.e. …

The market has priced in the US raising the Fed Funds rate to 3% by next year. I compare this to the EUR policy rates that are priced in, which appear to be less aggressive. Furthermore, I compare the consensus forecast of Bloomberg contributors for inflation (YoY CPI) and economic…

The observed high returns of Cryptocurrencies has attracted new investors and some argue that despite the high price volatility, this new asset class may offer diversification benefits. Under Modern Portfolio Theory, it is possible for an asset to offer diversification to a portfolio even if the return to risk ratio…