Lauren Hua

Are ETFs causing a bubble?

ETFs have become hugely popular recently as they can offer portfolio diversification at a very low fee. However Michael Burry, as portrayed in the “The Big Short” and who predicted the subprime mortgage crisis thinks there is a bubble brewing in passive investing with ETFs. In this article we discuss the impacts of ETFS on the stock markets. What is an ETF? It is a fund which usually holds multiple stocks and tracks an asset class or an index traded …

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Why is the AUD dollar going down?

The Australian dollar has fallen to its lowest level in 10 years. The price of the Australian dollar is simply driven by demand and supply. Price goes down when the demand is low and price goes up when demand goes up. So why has demand been falling for Australian dollars? Interest Rates The US cash rate is 2.5% and Australian interest rates are only 1% at the moment. The Reserve Bank of Australia (RBA) is considering further interest rate cuts. …

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Why inflation is good for the economy

High inflation has often been considered harmful to the economy. However, it is deflation which can be more harmful to the economy. Economist John Meynard Keynes believed that some inflation was needed to encourage consumers to spend and prevent the paradox of thrift. The paradox of thrift is detrimental to the economy. This is because savings prevents consumers from spending and the economy from growing. Deflation can be a bad for the economy Deflation occurs when all prices fall. Simultaneous …

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Top 9 Mistakes That Traders Make

If you can identify these top 9 mistakes that traders make, then you can improve your results. The stock market consists of people who are all driven by emotions. Because of this, a lot of trading decisions are impacted by these human emotions. In this article we list common mistakes that traders make. 1.Refusing to sell at a loss There is a term called “loss aversion”. This means people would be rather avoid losing money than gain money. Studies have …

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What is the difference between active and passive investing?

Active and passive investing are terms which have been used frequently in the media lately as the debate continues over which one is better. In this article we discuss the differences between the two and the pros and cons of each. Active management An active management strategy is one where fund managers try and beat the market by actively managing the portfolio. An active portfolio manager seeks to identify and exploit opportunities to find mispricing in stocks in the market. …

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