Lauren Hua

Which is better for total return, income or growth stocks?

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Investors looking to fund their living expenses through their share portfolio typically select stocks which are high yielding to provide them with income. However, what we have identified over the years is that high yielding stocks have not perform well in the stock market and therefore have not created significant capital appreciation for their investors. Companies which typically pay large dividends are usually blue-chip mature companies. As the growth phases of these companies are over, they do not need the …

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How does the overall market influence individual stocks?

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How does the overall market influence individual stocks? The performance of the overall market has a strong influence on individual stocks because markets are interconnected systems driven by broad investor sentiment, economic forces, and institutional behaviour. Even if an individual company is doing well, its stock may still fall (or rise) just because the overall market is falling (or rising). Here’s a breakdown of why that happens: 1.Market-Wide Factors Affect All Stocks Certain forces affect all companies, regardless of their …

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How Higher Oil Prices Affect the Share Market

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Higher oil prices can affect some parts of the share market more than others. However, we don’t see oil prices rising so much due to the Iran/Israel conflict as to have an overall negative effect. Despite this, it is worth revisiting how different sectors can be impacted by increasing oil prices. Here’s a breakdown of how and why oil price increases influence stock markets:  Winners: Energy and Commodities Companies in oil exploration, drilling, refining, and services tend to benefit from …

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Why a capital raising may cause the share price to decrease

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Capital raisings may cause share prices to decrease for several core reasons, primarily tied to dilution, valuation concerns, and investor sentiment. Here’s a clear breakdown:  Dilution of Ownership When a company issues new shares to raise money: Each existing shareholder owns a smaller percentage of the company. Unless the capital raised leads to proportionate earnings growth, earnings per share (EPS) will decline. This dilution lowers the value per share, even if the company’s total value (market cap) increases. Shares Offered …

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What is deflation?

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Deflation is an economic term that refers to a general decline in the prices of goods and services over a period of time. It is the opposite of inflation, which is the rise in prices. Causes of Deflation: Decrease in consumer demand – When people spend less, businesses lower prices to attract buyers. Deflation causes people to hoard money and put off spending it. When the general level of prices is falling, people will think about buying goods later believing …

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