Meb Faber, the podcaster and founder of the investment firm, Cambria Investment Management acknowledged the significance of “yield and capital appreciation” as a strategy for cash management, especially during financial uncertainty.
Previously, on March 24, the American venture capitalist Tim Draper shared certain tips regarding fund management, with regard to the current financial turmoil after the debacle of the banking giant Silicon Valley Bank (SVB).
Notably, his concerns included diversifying risks, awareness of fraud, awareness of vulnerabilities, the significance of yield and capital management, etc.
As a response to Draper’s Twitter post, Faber commented that the concern for yield and capital appreciation is “particularly meaningful in a time of higher inflation”:
Significantly, in Draper’s advice, he explained that “yield has been a major factor in cash management”, for years. He added that it has been remarkable even at times when there were lower interest rates and inflation.
While narrating on the current influence of yield, Draper stated that awareness of risk and return are equally relevant, adding:
Interstingly, along with his reaction towards Draper’s points, Faber mentioned his non-consensus portfolio, published on March 5, 2020, in which he cited risky factors of finance as well as the fallacious beliefs on the safety of Treasury bills.
Further, he explained that though the returns of T-bills seem safer, it is “not exactly”, quoting:
Similarly, Draper also included in detail the different risky elements and the significance of the awareness about it, adding that even the government themselves are “at risk of becoming insolvent”.
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Source: Cryptocurrency - investing.com
