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 …
A stock market plunge can leave investors very nervous and create panic. However the odds are that stocks prices will be higher in three to five years after a bear market. Bull markets follow bear markets so investors who panicked and sold at the bottom of the market lost out on the gains when the market recovered. But overall if you look at the stock market on a long term view you will find that there are more years where …
A recent report from Standard & Poor’s (S&P), the SPIVA report, has uncovered that over 80% of Australian fund managers have underperformed the index over 15 years. Investing in a managed fund is generally perceived as an easier way to invest. It can be a set and forget exercise where the investor does not need to monitor their investments. However, the convenience of a managed fund comes at a cost. Management fees can often be quite high. Often these fees …