Lauren Hua

How One Losing Stock Can Affect the Portfolio

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One of the most important concepts in portfolio management is understanding how a single underperforming or losing stock can negatively affect the performance of an entire investment portfolio. Investors often focus on the number of stocks that are performing well compared with those that are performing poorly. However, the overall performance of a portfolio does not depend simply on how many investments generate positive or negative returns. It depends on the size of each investment, its contribution to total returns, …

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Why don’t mining stocks always follow the price of the commodities they produce?

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At first glance, a mining company’s share price should move with the commodity it produces. If gold rises, gold miners should become more profitable and their shares should rise; if iron ore falls, iron ore producers should see lower revenue and profits. In practice, the relationship often breaks down. Gold can rise significantly while gold miners barely move, and miners sometimes fall even as the commodity reaches new highs. The reason is that a commodity and a mining company are …

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Stagflation: What It Is, Why It Happens, and Why It Matters

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Introduction: Understanding stagflation Stagflation is an economic condition in which a country experiences persistent inflation, weak economic growth and a deteriorating labour market at the same time. It is considered one of the more difficult economic situations to manage because the problems involved can reinforce one another, while the policies used to address one problem can make another worse. The term stagflation is formed by combining the words stagnation and inflation. Stagnation refers to an economy that is growing very …

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Should You Buy More Stock When the Price is Going Down?

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Buying more stock when the price is going down can be a good investment strategy, but it depends on several important factors, including why the stock price is falling, the financial health of the company, and your long-term investment goals. When a stock becomes cheaper, investors have the opportunity to purchase more shares for the same amount of money. However, a falling share price does not automatically mean that the stock is a good investment or that its price will …

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How Government Spending Can Cause Inflation

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Government spending can cause inflation when it increases the total demand for goods and services faster than the economy can increase the supply of those goods and services. To understand this process, it is important to understand how government spending affects the flow of money through the economy, how businesses respond to increases in demand, and why prices tend to rise when an economy’s resources become scarce. Although government spending is an important tool for promoting economic growth, employment, infrastructure …

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