Quantifying

Short Guide to Inflation-indexed Bonds Summary In this post I introduce you to inflation linked bonds and how they can be used by investors in an investment portfolio. Introduction Most private investors focus their attention on the equity market. It's exciting and offers the possibility of big gains, albeit at the risk of big losses or worse every now and then. Others are nervous of the equity market and prefer government or corporate bonds with their predictable (mostly) flow of coupons and pay-out (hopefully) on the maturity date. If your nervousness has developed into paranoia you may invest in gold as an insurance against war and pestilence. And if all of these options and choosing between them seems like too much then, of course, cash is a respectable investment although in some countries you may now be 'rewarded' with a negative interest rate. But there's a good alternative to all of these options and that's inflation-linked bonds. What are I...

Introduction This blog is going to be about everything quantitative, focusing on applications of mathematical and statistical modelling. Not cool eh? Well, hopefully you'll find otherwise. Mathematics has been around for millennia and was first used for essentials such as counting things. More exciting applications soon developed in geometry and astronomy. This happened because people observed the regularity of the movements of the moon and the stars. Useful things came out of that very early such as the ability to navigate. But the ability to develop statistical models was a long time coming and wasn't to do with the lack of data. Conceptually statistics seems difficult and many ideas, even as simple as the mean, took a long time to gain acceptance. A great article on this is "An average understanding" by Simon Raper in the Royal Statistical Society's Significance magazine which you can find online. We take this concept for granted but it was only i...