Lauren Hua
There is a term called loss aversion which means that losses have a higher psychological impact than making financial gains. When a person loses $1,000, they feel more pain than the joy of gaining $1,000. In this article we discuss this concept in further and the impact it has on your share portfolio. Definition: In trading psychology, humans feel more pain when they lose money compared to when they win money. Fear is a more dominant emotion than greed. This …
The set and forget strategy is not an ideal method for investors to maximise their returns in their share portfolio. It is prudent for investors to keep a watchful eye on their portfolio and make changes when appropriate. We discuss reasons why the set and forget strategy is not an optimal strategy for all types of stocks. Stocks that don’t perform need to be cut The set and forget strategy fails to identify and cull stocks that have not performed …
IPO Definition An initial public offering (IPO) is when a private company first offers stock to the public as it becomes a publicly traded company. These companies undergo IPOs to grow their business, and they need to raise capital to do so. IPOs are also a cost-efficient way to finance growth objectives. When companies sell shares to the public, they increase their equity. This improves the company’s debt to equity ratio, which will improve their ability to borrow funds if …
Inflation is the rising price of goods and services. The increased cost of living essentially means you will need to spend more money when purchasing everyday items such as bread, milk, apples, petrol, etc. Cash would not be the optimal asset class to hold in a high inflationary environment as inflation is rising faster than the interest that you earn on your cash. Stocks would be a much better choice. For many companies, their revenue and earnings should grow at …
Companies may find they have excess cash but see no opportunities for expansion. In this situation, they may want to participate in a buyback to use these funds which can increase their ownership. In this article we talk about what a share buyback is and why companies participate in them. What is a share buyback? Share buybacks occur when a company repurchases their own shares so they can gain back some ownership from shareholders. They do this by offering shareholders …