investing Archives - Fairmont Equities

What is dollar cost averaging?

March 3, 2022 by Lauren Hua

Investors may use various strategies to purchase shares in their portfolio. Dollar cost averaging is a one such strategy. In this article we discuss what it is, why it is used, and whether it is effective. Definition Dollar cost averaging involves the investor buying the same nominal amount of a share holdings regularly. This allows the investor to average down the cost price as purchases have been executed at different entry points. This helps prevent the investor from buying the …

Bond Basics

November 11, 2021 by Lauren Hua

Bond yields are closely followed by share market investors as they have an impact on interest rate movements. In this article we discuss what a bond is and the difference between a bond price and bond yield. Definition A bond is essentially a loan. These products can be issued by a government or a corporation. When governments or companies want to raise money, they can do so by issuing bonds. When an investor buys a bond, they are lending money …

What is the optimal diversification for your portfolio?

April 22, 2021 by Lauren Hua

Diversification is a strategy that investors may use to reduce risk in their portfolio. This is achieved by holding stocks in different sectors and different market caps. However, you can overdiversify and this can affect the performance of the portfolio. In this article we talk about the dangers of overdiversification and what the optimal number of shares is for a portfolio. Optimal Number of Shares for Diversification Twenty stocks is the optimal number to have in a share portfolio. Your …

Do you have enough to retire?

May 7, 2020 by Lauren Hua

Statistics show that three in five Australians feel they do not have enough money to retire. This Mortgage Choice survey also identified that 54 per cent of Australians start planning for retirement when they are over 50 years old. These are alarming figures if you want to retire on a comfortable level. Below is a guideline set by the ASFA (Association of Super Funds of Australia) outlining annual costs involved for a modest and comfortable retirement for those aged around …

What to buy when the market is in the late cycle

February 20, 2019February 20, 2019 by Lauren Hua

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 …