Lauren Hua

10 Common questions about dividends

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These are the top 10 questions commonly asked about dividends. 1.Why do companies pay dividends? Companies decide to pay dividends to investors out of their excess earnings as a way to reward them. Companies need to be making money to be able to pay dividends. So generally speaking, firms that can pay dividends are in a financial stable position. 2.Are dividends compulsory for companies? No, dividend payouts are not mandatory for companies. Some growth companies may decide to not pay …

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6 Different Investment Strategies

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There are many different investment strategies available to investors. The selection of the strategies should take into account the level of risk the investor is willing to take on, the investment time horizon, and the life circumstances of the investors. For instance, an investor who is retired will need income to fund their living expenses whereas a young investor who is still working can engage in more risk as retirement is still a long way off. See below six different …

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Macro factors that affect the stock market

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Fundamental analysis of companies can give us insights into their financial health. Technical analysis can provide an insight into how a stock is trending. However, investors cannot ignore macro factors within the current economic environment.  Some of these factors include economic growth, unemployment, inflation, interest rates, and exchange rates. All of these can affect the stock market. If investors are aware of these factors, they can adjust their portfolio to lessen portfolio losses or maximize profits. Economic growth The economy’s …

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The Bitcoin Bubble

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We have had numerous asset bubbles in the past such as the tulip mania, the US housing bubble, and the dot-com bubble. The latest bubble is the Bitcoin bubble. All these asset classes rose in value due to irrational exuberance but the same characteristics were in place which drove up the prices. The price of Bitcoin has fallen 71% in the past year. All asset bubbles burst after a period of time. In this article we discuss the reasons for …

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The stock market and the economy

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It would be rational to think that there is a relationship between the economy and the stock market. If the economy is performing well, then it could be assumed that economic growth would enhance the profitability of a company and hence improve their stock price. In a recession, companies can encounter lower profits. This may mean reduced dividends for stockholders and a falling share price.  There have been numerous studies on this argument. Stock prices change rapidly and can be …

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