Of course, but far too often we are so wrapped up in our own political and financial infighting that we not only don’t understand or assess the impact, but we don’t even realise our financial world is changing rapidly, both for good and bad reasons.

Here is just some of what was happening on the international financial side in the last few weeks:

• The latest United States Treasury Auction where US government securities are sold in the open market netted the highest bond prices (and lowest yields) since May 2013. Why was that? The US government sells treasury notes and bonds to the public and financial institutions on a regularly scheduled basis. The sales proceeds provide cash to the US government for various mandates including circulation within the monetary economic system.

• Meanwhile, the European Central Bank was buying back Sovereign Debt (bonds), in effect, injecting liquidity into the EU economic system.

• Brexit: the referendum in the UK has taken place with citizens voting to leave the Eurozone. The pound plunged in response yesterday. Will the change in currency value against the US dollar impact our UK exports/imports? Will Bermuda residents with UK connections lose their right to travel freely? This columnist could not try to answer these questions in detail as this article was written prior to the confirmed outcome of the Brexit vote. It will no longer be politics as usual — at least, for a while.

• The growth of bitcoin and blockchain technology. Various news media reported in late spring that Chinese purchases of cryptocurrency pushed bitcoin transaction prices to record-highs. What is bitcoin? Is this new thing going to take hold? What will the use of digital currency mean for Bermuda residents?

• Meanwhile, according to the New York Times DealBook, Nathaniel Popper, June 17, 2016, a hacking of more than $50 million dashed hope in the New World of virtual currency. So, digital currency programmes may be headed temporarily, back to the drawing board.

• NIRP (Negative Interest Rate Programme). More countries are adopting a real or implied negative interest rate regime. The German government’s latest bund sale to investors paid no interest rate, and why would one buy a bond that pays no interest? What does it mean to have negative interest rates?

• The VIX index increased last week, indicating more volatility in US and other capital markets. Does something like this indicator affect Bermuda investors and businesses?

• Common Reporting Standards, cashless societies, country collaborative programmes for greater tax and finance compliance on a global basis, and many more interlinked finance/tax initiatives are in the offing.

What do all these seemingly unrelated factoids mean to Bermuda residents? Quite a bit, actually — our world is changing, within and without. We cannot use the old Bermuda avoidance technique that “it’s got nothing to do with me”.

What happens out there can impact us on our tiny island. We need to be in the know.

Then, too, there is as common thread running through all of these data points.

Uncertainty is one of the biggest undermines of a flourishing economy. It can affect everyone’s mindset, while impacting the success of new businesses, established businesses, and personal financial plans. And this is why, understanding the global investment world is so important.

The New Bermuda Investment Series: introduction. The investment series will run in collaboration with the retirement series. Why? Because planning for the future, retirement or not, includes understanding your savings, pension, individual investment products, and the outside economic overlay that can impact Bermuda and her residents, financially.

We will explore in-depth the concepts above, the basics of investing and more. In the meantime, start yourself on the path of financial investment discovery. Read Bloomberg, the New York Times, The Guardian, and other publications, including news reported by your local financial institutions, when you can. Take notes on items you don’t understand. Research them, or use the easy way out. Write to me. I will answer your questions.

Reader question regarding the balanced fund article of June 14, 2016.

In your June 4 edition of “Moneywise”, you stated that a balanced, US-based (though not necessarily restricted to US securities) portfolio should have generated an annual average return of 5 per cent per year over the last ten years. I presume that that return was inclusive of the years 2008, 2011 and 2016 (you mentioned - I think - the recovery of 2009). Can you give me some instances where a “balanced” portfolio has averaged 5 per cent for the last ten years?

I would caution that any investor reading this understand that in order to compare apples to apples on average, there are a numerous data points to keep in mind. Two are the actual asset allocation percentages, and the fees to manage the fund or portfolio, since both of these points can skew the return results.

A balanced fund is a generic term that generally indicates an asset allocation of 55 to 60 per cent stocks and 40 to 45 per cent bonds / fixed income. There are also balanced funds with 70 to 80 per cent stocks and 20 to 30 per cent bonds (more aggressive with possible higher returns), or the converse, 60 per cent bonds and 40 per cent stocks (more conservative with possibly lower returns) than the generic model. Additionally, portfolio managers could label a fund as balanced, but also hold hedging positions against the stocks and bonds as well as other types of securities.

If you want to compare balanced fund against balanced fund in exact detail, then you will need to compare each and every security position within the fund / portfolio against your own investment allocations. In this reader’s case, I think that he just wanted to have a sense of the range of total returns.

Please see links below to several different balanced fund performance charts over the last ten years. You can find these electronic fact sheets and many more at the following links:

UK-CF Bentley US Dollar Balanced Acc

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000000958&tab=1

Canada – Scotia Canadian Balanced Series A

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=18108

US – Vanguard Balanced Index Fund Investor Shares (VBINX)

https://personal.vanguard.com/us/funds/snapshot?FundId=0002&FundIntExt=INT

Note again – these are informational samples only. You must do your own homework as an investor. The author does not sell investments, or provide specific investment advice. This information is general in nature and cannot be used for any individual financial plan.

Next week: more on our Retirement Series Calculator. The week after the start of the Investment Series, featuring the star of the Bermuda 14-Week Financial Review, MamaZina and her Pizzarina.

Martha Harris Myron CPA CFP JSM : Masters of Law - International Tax and Financial Services; Pondstraddler Life™ Financial Perspectives for Bermuda Residents with Multinational Families and International Connections on the Great Atlantic Pond. Appointed to the Professional Tax Advisory Council, American Citizens Abroad – The Voice of Americans Overseas: Geneva and Washington DC https://americansabroad.org/. Contact: martha@pondstraddler.com