emmanuelewumi:


You need to hold your VGIF for 6 months to avoid penalties.

4.5% by VGIF is the minimum, you should expect an additional payment at the end of June

6 months in a given year or 6 months after opening the account?.

Lazyyouth4u:


I remember when I mentioned here how foolish it is to give money to some small boys to invest and some idiots here were insulting me. How can you look at a 21 year old boy and give him your money to go and invest? That is even worse than stupidity.

Na the idiots wey dey give their life savings to some of those fintechs with inexperienced small boys claiming to be expert investors that can make above market returns I dey pity. Premium tears loading......

Mention the fintechs no be say tomorrow come you go say " I said it here"

emmanuelewumi:


You need to hold your VGIF for 6 months to avoid penalties.

4.5% by VGIF is the minimum, you should expect an additional payment at the end of June

I'm not sure this still holds.

My investment wasn't up to six months when I withdrew all of it and I got the entire money with the capital intact.

emmanuelewumi:



Bubble assets are usually volatile.

The prices increase as a result of greed and optimism, not because of the earning ability and growth of the earnings of such assets.

They need to get more greater fools to join the train

Income or earnings of such assets does not justify the prices of the assets.

More than 98% of people who hold such assets hope to make money from the capital appreciation of the assets

They create money out thin air for the piooner or early buyers of such assets.

On the long run more than 98% of the buyers of such assets will lose money.

Buyers of bubble assets have no regards for risk management, a good number invest substantial percentage of their networth on such assets.

It is common among those who want easy money and people who believe in miracles.

Sh!t coin is a very good example

emmanuelewumi:


You need to hold your VGIF for 6 months to avoid penalties.

4.5% by VGIF is the minimum, you should expect an additional payment at the end of June

That won't apply as i have had the account for over 2 years.

As for the additional payment/returns outside of the 4.5%, do we know relatively what additional percent? (historically)?

maybe @emmasoft can enlighten me.

emmanuelewumi:
What are the characteristics of bubble assets?

Let us share our thoughts

BY KIMBERLY AMADEO REVIEWED BY
ERIC ESTEVEZ
Updated November 30, 2020
An asset bubble is when assets such as housing, stocks, or ​gold dramatically rise in price over a short period that is not supported by the value of the product. The hallmark of a bubble is irrational exuberance—a phenomenon when everyone is buying up a particular asset. When investors flock to an asset class, such as real estate, its demand and price increases.1

During a bubble, investors continue to bid-up the price of an asset beyond any real, sustainable value. Eventually, the bubble "bursts" when prices crash, demand falls, and the outcome is often reduced business and household spending and a potential decline in the economy. Understanding the causes and historical trends of asset bubbles can keep you from contributing and falling victim to a future one.

Irrational exuberance is a common sign of an ongoing asset bubble.

Causes of an Asset Bubble
Three chief conditions contribute to irrational exuberance and subsequent asset inflation:

Low-interest rates: They make it easy to borrow money cheaply, which boosts investment spending.1 However, investors cannot receive a good return on their investments at these rates, so they move their money into higher-yield, higher-risk asset classes, spiking asset prices.2   
Demand-pull inflation: This occurs when buyers' demand for an asset exceeds the available supply of that asset. As asset prices rise, everyone wants to get in on the profits.3
Asset shortage: This is when investors think that there is not enough of a given asset to go around. Such shortages make asset bubbles more likely because the imbalance between supply and demand leads prices to appreciate beyond the asset's value.4
2005 Housing Bubble
The asset bubble that occurred in real estate in 2005 was fueled by credit default swaps that were used to insure derivatives such as mortgage-backed securities and collateralized debt obligations (CDOs). Hedge fund managers created a huge demand for these supposedly risk-free securities, which in turn boosted demand for the mortgages that backed them. To meet this demand for mortgages, banks and mortgage brokers offered home loans to just about anyone. That drove up demand for housing and increased home prices.5

When the homebuilders finally caught up with demand, housing prices started to fall in 2006.6 That burst the asset bubble and created the subprime mortgage crisis in 2007, which in turn led to the global financial crisis in 2008. 7 8

2008 Oil Asset Bubble
The asset bubble that occurred between 2007 and 2008 affected oil prices. Global production of oil fell from 2005 to 2007, in part because of a decline in depleted oil fields in Saudi Arabia. At the same time, demand for oil grew. China was one of the biggest consumers, using 870,000 barrels of oil a day in 2007. The below-average oil supply led to dramatic price increases between late 2007 and the first half of 2008. By July 2008, oil prices had reached a record of $145 per barrel.9

2011 Gold Asset Bubble
Gold prices started rising in 2008. Investors bought it as a hedge against the global financial crisis, not for its value in producing jewelry or dental fillings. Many thought the global economy would recover quickly. When it didn't, gold speculation continued, and prices rose for three more years. The commodity reached a record high of $1,917.90 an ounce in August 2011.10 However, they fell to below $1,600 in 2012.11

2012 Treasury Notes Bubble
To boost the economy following the global financial crisis, the Federal Reserve started a new round of an economic stimulus program known as quantitative easing, buying $85 billion a month in treasuries in September 2012, reducing interest rates.12 Yield rates followed suit; on June 1, 2012, yields on 10-year Treasury notes closed at 1.47%.13

That same day, investors sold off stocks amidst fears of high unemployment and the worsening of the eurozone debt crisis, driving the Dow down 275 points.14 They turned to safe-haven Treasury notes instead.

However, by 2013, interest rates started to rise as the Fed hinted it would begin winding down its purchases of treasury notes in September.15 16 Treasury yields rose about 75% between May and July. The Federal Reserve postponed its intended course of action when the government shut down in October. Therefore, the yield on the 10-year Treasury remained at around 2.5%–2.8%.17 

2013 Stock Market Bubble
The stock market took off in 2013. The Dow Jones Industrial Average experienced a gain of 26.50%—its largest in 18 years. The S&P had its best year since 1997, posting gains of 32.39%. Rising corporate profits, a product of cost-cutting and productivity increases, drove up stock prices. However, companies stockpiled the earnings rather than reinvested them.18

Demand for many consumer products was also weak because unemployment was still high (above 7%), and wages were low.19 In May, the Federal Reserve hinted that it would taper quantitative easing, which put a brief damper on the market. However, more pronounced economic weakening occurred in early 2014; stocks fell sharply in January. The high value of the U.S. dollar relative to regional currencies played a role in lower returns for U.S. investors. Although the stock market rallied in February, GDP growth for the first quarter stood at an annualized rate of -0.29%.20

2014 and 2015 U.S. Dollar Bubble
In late October 2014, when the Federal Reserve announced that quantitative easing would end, Forex traders stampeded into the dollar, causing it to soar.21 22

At the same time, the European Central Bank stated it would start quantitative easing, so U.S. GDP improved to an annualized rate of 4.6%. All this reflected American economic strength combined with weakness in the European Union and emerging markets, especially China.20

However, the strong dollar hurt exports, which reduced U.S. GDP in 2014 and 2015.23 It also aggravated a drop in oil prices, which fell to a six-year low in the third quarter of 2015.24

2017 Bitcoin Asset Bubble
Bitcoin is a digital currency—a computer-based form of monetary exchange. No government or central bank will control, manufacture, or regulate it. In September 2015, the U.S. Commodity Futures Trading Commission designated Bitcoin as a commodity.25 Its stratospheric rise in 2017 was in part because Japan's Financial Services Agency recognized it as a legitimate payment method in April.26 Japanese traders comprise 60% of the entire market.27

In 2017, the price of Bitcoin rose over 1300% from its opening price at the start of January to its closing price at the end of December. In addition, its total market value was $16 billion at the beginning of the year and $229 billion by the year's end. On November 29, 2017, the price of a single Bitcoin reached a record high of over $11,500. Hours later, it fell to around $9,600.28 

New Stock Market Asset Bubble
Despite market volatility following recovery from the global financial crisis, historically low-interest rates, increased consumer spending and higher business profits, a shift from investment in real estate to stocks, and low inflation and savings rates have contributed to soaring stock prices since 2017.29

The Dow rose above 21,000 in mid-2017. While it declined in early, mid-, and again in late 2018 amid trade tensions between the U.S. and China, the market rallied each time. The Dow is over 28,900 as of January 2020.14 The surge has increased worry among economists of a potential stock market bubble that could be headed for a burst. The burst is expected to come either as a market correction amounting to a decline of around 20%, or a larger crash. But the upswings and downswings make it hard to predict which form it will take—and when.

When a stock market asset bubble bursts in the form of a market crash, the outcome is often an economic depression.

Emerging Student Loan Bubble
Students have been racking up debt over the last 15 years. The typical student took out a loan of between $20,000 and $24,999 in 2018 compared with only $17,172 in 2005. High debt has been accompanied by a high delinquency rate. In 2018, 10% of adults with a bachelor's degree were behind on payments; the rate was 37% for students with associate's degrees.30

Some economists fear the burst of this asset bubble above all because it could have devastating consequences for the next generation. Students with sizable outstanding debt and limited government support may have to delay marriage, growing a family, buying property, or switching to a different career.29

Protecting Yourself from Asset Bubbles
While an asset bubble can have a few primary causes, such as low-interest rates, demand-pull inflation, and asset shortage, one of the key signs to watch out for is irrational exuberance. If you think the value of an asset doesn't justify the hysteria, avoid buying it purely because it seems profitable. Often, the price will keep increasing for years. The problem is that it is tough to time asset bubbles and their subsequent burst.

Instead, opt for a well-diversified portfolio of investments. Diversification means a balanced mix of stocks, bonds, commodities, and even equity in your home. Revisit your asset allocation occasionally to make sure that it is still balanced. If there is an asset bubble in gold or even housing, it will drive up the percentage you have in that asset class. That's the time to sell. Work with a qualified financial planner, and you won't get caught up in irrational exuberance and fall prey to asset bubbles.31

handsomebolanle:


Contact me if you're under EKO Elect. Distribution.... and NO you can't go with it when you move...

Hi, I would like to contact you regarding this.

Macktaob:

Hi, I would like to contact you regarding this.

Kindly Send a PM

Emndy:


That won't apply as i have had the account for over 2 years.

As for the additional payment/returns outside of the 4.5%, do we know relatively what additional percent? (historically)?

maybe @emmasoft can enlighten me.

It depends, you should get additional 2% or thereabout.

Find attached the screenshot of the returns since 2017 and the additional returns

Grupo:


I'm not sure this still holds.

My investment wasn't up to six months when I withdrew all of it and I got the entire money with the capital intact.

You paid penalties on the returns, you will lose 20% of the interest earned

lavylilly:
Mention the fintechs no be say tomorrow come you go say " I said it here"

Why should I? To gain what exactly? Your applause?? No, thank you!

NL1960:


6 months in a given year or 6 months after opening the account?.

6 months after investing

Eg invest N1 million 2 years ago

N2 million a year ago

N1 million 4 months ago.

You have a total of N4 million.

You can liquidate N3 million.


If you liquidate N4 million, you will lose 20% of interest earned by the N1 million invested 4 months ago

For Fixed Income Funds you are expected to leave the fund for 3 months, for money market funds you are expected to leave the funds for a month

emmanuelewumi:


You paid penalties on the returns, you will lose 20% of the interest earned

I didn't.

The returns showing on my dashboard added to the capital showing on my dashboard was exactly what they sent me after I submitted my redemption form to my account officer.

Everything happened in less than 6 hours.

Grupo:


I didn't.

The returns showing on my dashboard added to the capital showing on my dashboard was exactly what they sent me after I submitted my redemption form to my account officer.

Everything happened in less than 6 hours.

Did you liquidate all your funds, possible the 20% of your interest was negligible that you didn't observe it.

emmanuelewumi:



Did you liquidate all your funds, possible the 20% of your interest was negligible that you didn't observe it.

Could have been deducted from the additional returns you would have earned

emmanuelewumi:



Did you liquidate all your funds, possible the 20% of your interest was negligible that you didn't observe it.

Yes, I liquidated everything. As I got a better offer which I put the money into.

Well, I don't really know. Maybe they took something and I didn't notice.

From the last fact sheet of VGIF, the fund under management is N13 billion

United Capital Fixed Income Fund has N150 billion under management, has an average return of 15.6% from 2016 to 2020

Yes, from one of emmasoft's previous explanation, that deduction only happens on a percentage of what you gained within the period and never on the capital.

emmanuelewumi:



Could have been deducted from the additional returns you would have earned

ojesymsym:
Yes, from one of emmasoft's previous explanation, that deduction only happens on a percentage of what you gained within the period and never on the capital.

Never said it was deducted from the capital, he will lose 20% of the interest earned on the investment, all funds have minimum holding period.

Money Market Fund 30 days

Fixed Income Fund 90 days

Eurobond Fund 90 days

VGIF has the longest which is 180 days

emmanuelewumi:



Never said it was deducted from the capital, he will lose 20% of the interest earned on the investment, all funds have minimum holding period.

Money Market Fund 30 days

Fixed Income Fund 90 days

Eurobond Fund 90 days

VGIF has the longest which is 180 days

Please what mutual funds has the best rate currently. Don’t understand what’s going on at FSDH

chigo4u:

Please what mutual funds has the best rate currently. Don’t understand what’s going on at FSDH

Which of the funds do you have with FSDH.

I have FSDH Treasury Bill Fund and Coral Income Fund with them

chigo4u:

Please what mutual funds has the best rate currently. Don’t understand what’s going on at FSDH

My money market fund with United Capital is now paying close to 7%

emmanuelewumi:


My money market fund with United Capital is now paying close to 7%

If I drop funds with them would I be getting same 7%?

OgogoroFreak:
If I drop funds with them would I be getting same 7%?

Currently 6.95% should increase to 10% by next quarter

emmanuelewumi:



It depends, you should get additional 2% or thereabout.

Find attached the snap shot of the returns since 2017 and the additional returns

Thanks a lot.

NL1960:


6 months in a given year or 6 months after opening the account?.

6 months from the date of your deposit.
However, the returns are prorated from the date of your deposit to the next payment date which is January or July so that you always get a return whenever you are existing before 6 months after penalty is deducted from your earnings.

Grupo:


I'm not sure this still holds.

My investment wasn't up to six months when I withdrew all of it and I got the entire money with the capital intact.

It still holds. But at no time will your capital be deducted. The 10% deduction is from your interest perhaps it's how you did your calculations the deduction is system base it would have been removed before you get credited.

Emndy:


That won't apply as i have had the account for over 2 years.

As for the additional payment/returns outside of the 4.5%, do we know relatively what additional percent? (historically)?

maybe @emmasoft can enlighten me.

The additional earnings is very much dependent on the fund's performance which in turn is dependent on the prevailing rates. Usually between 2 to 3.5%. It's not Gurranteed in any way like the benchmark rate but because fund managers and other parties to the fund get paid from the extra it's almost certain that there will be extra because fund mangers must work hard to get pay for their professional inputs.

emmanuelewumi:


Which of the funds do you have with FSDH.

I have FSDH Treasury Bill Fund and Coral Income Fund with them

Coral income fund and It crashed this month.

emmanuelewumi:


My money market fund with United Capital is now paying close to 7%

Is united capital a subsidiary of UBA? I prefer mutual funds that are subsidiaries of big names

Guys is TB auction this week?