Lauren Hua
Gold is below the US$1200 per ounce mark for the first time in more than two and a half years. But despite recent global uncertainty, the price of gold has not been going up. Gold is usually a safe haven when there is instability or uncertainty in the market place. So what are the reasons for the drop in this precious metal? Strong US dollar Strength in the US dollar works against gold. Gold is denominated in US dollars so …
To determine whether a stock is cheap or expensive, investors generally use the price to earnings (P/E) ratio. Historical information can be used to compare how expensive a company is in comparison to how the share price has traded over time. Price per earnings can also be compared to other stocks in same industry. That way we can also determine whether individual stocks are expensive relative to their peers. What is the P/E ratio? The price per earnings formula is …
Higher interest rates are actually bad for bonds as it means lower bond prices. It is a confusing concept to understand so here is a simplified explanation. Bond yields are monitored by equity investors as it can impact the share market and reflect the direction of the economy. We have written about this on the following blog posts: Why rising bond yields is bad news for the stock market What bonds can reveal about the share market How bonds work …
Read MoreWhy Rising Interest Rates is a Negative for Bondholders
The recent decline in Australian housing prices is the greatest we have seen in 9 years. Investors are not pouring funds into property at the same rate as before as rental yields tumble. The royal commission into banking has created a local credit crunch. Many consumers are finding their loan approval amounts have dropped significantly due to stricter lending practices. Three of the big four banks have recently increased their variable interest rates on home loans. This is going to …
Stocks on the Australian share market are categorised by their size. This is usually measured by a company’s market capitalisation. It is calculated by multiplying the company’s current share price by the total amount of shares on issue. A market cap is essentially what the market values the company at. The size of a company has a huge impact on the characteristics of the stock. Knowing the difference between these types of companies will assist the investor to select the …
Read MoreThe Differences Between Small Caps, Mid Caps and Large Caps