Educational articles

What is the difference between a recession and a depression?

The terms recession and depression have been spoken about recently because of the economic effects of COVID-19. But what are the difference between the two and how do they both affect the stock market? A recession occurs when there are two consecutive quarters of declining gross domestic product (GDP). The GDP measures the total value of all goods and services an economy has produced. It is one of the economic indicators used to evaluate the health of an economy. A …

Read MoreWhat is the difference between a recession and a depression?

What is market breadth?

Technical analysts use various indicators to gauge the sentiment in the market. This can help them determine whether there the stock market is feeling optimistic or pessimistic. In this article we discuss what market breadth means and how to determine its strength. Definition Market breadth can show the strength of the market by looking at how many stocks are increasing in price against how many stocks are decreasing in price. If there are more stocks with increasing stock prices then …

Read MoreWhat is market breadth?

What is Modern Monetary Theory (MMT)?

Governments can try and stimulate the economy through various methods. One method used is monetary theory which involves increasing the money supply. Governments can adopt monetary policy by decreasing the interest rates, decreasing the reserves which banks are required to hold, or printing more money to increase the supply of money in the economy. However, there is another policy called Modern Monetary Policy which we discuss in this article and we include arguments for and against this theory. What is …

Read MoreWhat is Modern Monetary Theory (MMT)?

What are share buybacks and why do companies do it?

Companies may find they have excess cash but see no opportunities for expansion. In this situation, they may want to participate in a buyback to use these funds which can increase their ownership. In this article we talk about what a share buyback is and why companies participate in them. What is a share buyback? Share buybacks occur when a company repurchases their own shares so they can gain back some ownership from shareholders. They do this by offering shareholders …

Read MoreWhat are share buybacks and why do companies do it?

Differences between value investing and technical investing

There are different types of strategies investors can use to trade on the stock market. Two common strategies are value investing and technical investing.  Value investing is a strategy where the intrinsic value of a stock is evaluated and stocks are brought using fundamental analysis. Value investors like to buy stocks that are underpriced in the market. Technical investing looks more at the price action of the stock. By analysing price movements investors can weigh up the probabilities that a …

Read MoreDifferences between value investing and technical investing