Don't discount the value of a guaranteed return

Over the weekend I had the time to listen back over one of the recent interviews with Satyajit Das. Das highlights his take on how to invest in this current environment. He makes the following points: 1) Invest a lot in ensuring you as an individual have a very high income earning capability through education or other mechanisms 2) In this environment capital preservation should be the first consideration in your investment process – ahead of both income and capital growth. Das then explains why investors should not ignore the current ‘low rates’ of income on term deposits and bonds. He uses the example of a Japanese fund manager who invested in 20 year Japanese bonds at 3% in 1996. At the time it seemed a low return, however, these rates have not been seen since. “You’ve got to be really careful to look at even low yields but which are guaranteed and secure and ignore. It’s very, very important that you understand that.” I’ve market the video segment here: