Lauren Hua

Why inflation is good for the economy

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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

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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?

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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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The difference between top-down investing and bottom-up investing

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There are many different investment strategies investors can undertake when investing in stocks. The terms “top down investing” and “bottom up investing” are strategies which are used frequently in trading. Here we discuss the meaning and differences between top-down investing and bottom-up investing. Top-down investing This strategy involves analysing stocks on a macro level. This means that the investor is looking at the overall picture of the economic outlook and ascertains which sectors will be performing the best. These analysts …

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Why Australia’s low savings rate could be a big problem

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The household savings rates in Australia was only 2.80 percent in the first quarter of 2019. The average savings rate was 9.49 percent from 1959 until 2019 which means that our savings rate is now extremely low when compared to the Australian average.  With many households highly indebted, Australians may be digging into their savings account to cover bills. In this article we look at the problems that can occur with a national low savings rate. Decrease in household expenditure …

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