It may sound obvious, but markets can go up, down, or sideways. Unfortunately, many investors get worried when markets start to head south. Successful investors have a strategy for each phase of the market. When markets do star to head lower, it is important to remember not to panic. Market volatility is normal and market downturns are often followed by market upturns. We have had large falls in the market for periods of time only for the market to head …
The world of dividends can become confusing for the investor if they are not familiar with the all jargon. These are the top 10 questions commonly asked about dividends. Why do companies pay dividends? Companies decide to pay dividends to investors out of their excess earnings as a way to reward them. Companies need to be making money to be able to pay dividends. So generally speaking, firms that can pay dividends are in a financial stable position. Are dividends …
Many investors avoid resource stocks because there is a perception that this sector is very volatile. However, large cap resource stocks usually do not suffer massive one day losses. When you look at how much they can fall in a given day, you will be surprised to see how they compare to other sectors of the market. This is distinct from other companies on the ASX which can suffer massive falls of 10-50% in one day if they release a …
There are four stages of the economic cycle. These are the early phase, mid phase, late phase and recession. The characteristics of the economy currently point us to the view that we are in the late phase of the cycle. Some of these characteristics include low appetite for risk, flattening of the yield curve, a fall of consumer spending, slowdown in growth, and low levels of unemployment. Each cycle requires a different approach to investing. If you can understand what …
Recent manufacturing data from China disappointed the market. It once again raised the question of whether growth in China can sustain these levels. Many believe that a Chinese slowdown could spiral the global economy into recession. This is because it is the world’s second largest economy. China is also Australia’s largest trading partner, purchasing 30.6 per cent of our exports. Our second highest trading partner is Japan, with a distant 12.7 percent. We believe that the Chinese will continue to …