Educational articles

What is an alternative investment?

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In this low interest rate environment, investors may find it hard to find investments which generate a good return. Alternative investments are asset classes that do not include the traditional ones such as equities, bonds, and cash. In this article we discuss what the pros and cons of alternative investments and explain some examples of what these asset classes are. Why do investors invest in alternative investments? Alternative investments can add to diversification to an investor’s portfolio as they do …

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Which asset classes to invest throughout the economic cycles

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Different asset classes perform better in different environments.  Investors can optimise portfolio performance by identifying which assets perform the best at certain phases of the economic cycle. In this article, we will go through the different asset classes and outline which economic phase is best to purchase each one. Cash Cash is the lowest generating asset class and banks are currently offering 2% on their high interest rate savings accounts. This asset class is also considered a safe haven so …

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Four ways to manage risk in your share portfolio

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Mitigating risk is an important exercise for any investor in order to preserve capital. The main objective of any portfolio is maximum returns, however this can only be achieved if risk is managed correctly. In this article we outline four ways to reduce risk and therefore optimise performance. 1. Calculating beta One way to mitigate risk in the portfolio is the look at the beta of each stock. Beta measures how the stock fluctuates compared to the broader market. A …

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What are cyclical stocks and why are they important now?

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It is important for investors to be able to distinguish which stocks on the Australian share market are “cyclical”. At certain phases of the economic cycle, cyclical stocks can under or overperform the market. This means that by identifying where we are in the cycle, and identifying which stocks are cyclical stocks, an investor can improve their portfolio returns. What are cyclical stocks? Cyclical stocks are stocks that move with the economic cycle. This means these stocks are affected by, …

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Reflation: What is it, and why you need to understand it

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Reflation is an important term for investors to know. It is important to understand where we are in the business cycle as it can affect the performance of your share portfolio. In this article, we discuss what reflation is, how it is implemented, and the sectors which profit from these economic conditions. What is reflation? Reflation is a deliberate attempt to raise the general level of prices to achieve an economy at full employment and growth. In Australia, the Reserve …

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