Educational articles

Sectors that do well in a stronger economy

The stock market likes certainty and that is what we have seen lately. The US election is now over and markets have now been moving strongly to the upside. The opening of domestic borders and many days of zero COVID cases has also provided optimism to share investors. In this article we discuss some of the sectors which will benefit from an increase in confidence in the economy and the share market. Financials Banks have been performing well lately. These …

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8 reasons why investing in shares is better than property

The comparison of property versus shares has been around for many years. Property investment has been popular for many Australians. However, there are hidden costs and large initial outlays involved compared to shares. In this article we compare eight characteristics between the two and discuss the differences. 1.Performance Over a period of 30 years, shares have outperformed property. Vanguard have tracked the performance of different asset classes for the last 30 years and have presented US shares as the top …

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What are derivatives?

Derivatives are a type of instrument which can be used by traders to speculate or hedge positions. In this article, we discuss what a derivative is and some of the common examples of this instrument. Definition of a Derivative Derivatives are instruments where their value is derived from an underlying security. This means the price of the derivatives is dependent on how the underlying asset (being stock, bond, commodities, interest rate) is performing. Types of Derivatives Options There are two …

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5 Risks with Investing in Bonds

Investing in equities has always been thought of as more risky than bonds. However, investing in bonds is not without risks. These are the top 5 risks involved in investing in bonds. 1.Income received from investor is fixed There is a fixed upside in income with bonds. When an investor invests in a bond, they will receive a pre-determined fixed payment. Whereas in equity investment, if a company has an increase in profit, they may decide to pay this out …

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What does the Relative Strength Index mean?

Technical analysts use various tools to gauge the sentiment of a particular stock or index. One momentum indicator they may use is Relative Strength Indicator (RSI). It was developed by J.Welles Wilders in his book in 1978 and it is still popular with current traders. What is a Relative Strength Index (RSI)? The RSI is a technical momentum indicator which identifies when a stock/index has been oversold or overbought. This indicator measures the speed and change of price movements. It …

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