Lauren Hua
The price of gold is up 17.20% for the year so what is the cause of this massive increase in the price? In this article we discuss the factors which can cause the price of gold to go up. High inflation Gold is considered a safe haven, so in times of high inflation, investors flock to gold as a store of wealth. Inflation is still above the central banks’ targeted levels. Hence gold can be used as a hedge against …
The term “toppy” is frequently used to convey a market which seems to be trading at its high. In this article we talk about what a toppy market it and the strategies that can be implemented to reduce risk in this kind of market. Definition A toppy market occurs when the market has hit a level where market looks like it can’t extend from. There may be market sentiment that there is an asset bubble forming. Investors are concerned with …
The state of the economy is important for investors in the share market as it can determine the type of stocks they will buy and the strategies they will undertake for their portfolios. These are different indicators you can use to monitor the economy. Manufacturing The Purchasing Managers Index (PMI) is based on the results from a monthly survey from various manufacturing companies each month. There are five activity indicators which are measured. These include production, new orders, supplier deliveries, …
In environments of high levels of economic growth, these are the 3 main sectors that need to be on your radar: 1.Industrials Sector This cyclical sector performs well when the economy is doing well. These companies usually have fixed costs which they pay in all economic conditions. So, when the economy is good, their margins increase, and their revenues head higher. Companies are also more willing to spend more money on equipment upgrades and shipping when business is going well. …
Read MoreWhat sectors do well when economic growth is strong?
Companies can use excess cash to acquire new companies but they can sell a subsidiary to obtain cash and add value back to the parent company. In this article we discuss about what you need to know about divestment. What is a divestment? A divestment occurs when a company sells off a subsidiary or some of its assets. It is essentially the opposite of an acquisition. The company is looking to optimise the value of the parent company which may …