Having a basic understanding of financial statements is key for anyone who wants to invest in shares.
All sorts of people analyse financial statements. From small time investors, to Chief Financial Officers (CFO’s) of big businesses.
For investors, a company’s financial statements help determine whether it’s a good or bad investment.
For business owners and CFO’s, financial statements drive their business decisions by showing them where their businesses are succeeding or failing.
I'm a firm believer in the KISS ("Keep It Simple Stupid") acronym, especially when it comes to long-term investing. Below is the over-summarised version of the Fund of Funds (FOF) strategy:
The above strategy works well once it's up and running because it doesn't need ongoing maintenance; you put your faith in the fund managers you believe are the best at what they do, and invest in their funds each month.
That's the easy part. The tricky part is deciding which funds you want to invest in. In this post, I'll cover five questions it's worth asking yourself before choosing funds for your FOF investment portfolio.
I've put together 10 of my favourite investing related quotes. They are in no particular order.
Quote 1. Christopher Browne
Investing a bit of money each month over many years will go a long way towards growing your retirement pot. The easiest way to do this is through Dollar Cost Averaging, where you invest the same amount of money each month into your portfolio, regardless of what the market is doing. Over time, this lets you average the prices at which you buy your fund units.
Dollar Cost Averaging (DCA) is great, but Value Averaging (VA) is better. In this post, I'll explain:
Understanding a bit about economics and how it plays a part in your investment strategy will go a long way towards growing your wealth over time. Quantitative Easing (or 'QE') is a word that gets thrown around a lot in the financial news, so I've written this post to explain:
I once had a finance lecturer who introduced me to the Options Robot; an easy way of understanding and remembering the four basic types of financial options:
Before I explain what my lecturer was talking about, I'll first give a brief overview of each of the above types of options. Investors use options for hedging and speculating on stocks, foreign exchange, bonds, you name it.
To keep things simple, I’ll describe each type of option using stocks as the underlying asset, but you can generally apply this to most other asset types.
"If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” George Soros, Fund Manager of the Quantum Fund
Technically, a bond is just a loan. But investing in bonds is a different ball game altogether. In the investment world, bonds are considered the safer and more boring cousins of shares. However, they’re also one of the most mathematically fascinating asset classes out there.
In this post I’ll explain how bonds work, and let you know how to invest in them. It's time to get technical!
If you're like most people looking earn a second income, then you've probably considered investing in the stock market. And if you're like most people, then you probably find the stock market insanely intimidating!
Sure, you can make a lot of money investing in stocks – if you know what you're doing. But you can also lose a lot of money if you don't. That's where funds come in.
Funds work like this:
Some investment gurus recommend stocks. Others are doom-mongers who preach the coming collapse of the global financial system. They believe that most of the modern world will spiral into a state of Zimbabwe-like hyperinflation. For them it’s not a matter of if, but when paper money becomes worthless, and our investments wither away.
I personally choose to take what the doom-mongers say with a large tablespoon of salt. Yet nobody knows what the future holds, which means that a financial apocalypse could still happen tomorrow.
People often talk about trading and investing as if they're the same thing, but they're really quite different. In this post, I'll outline the differences between the two, which will hopefully help you decide whether your personality and current lifestyle are best suited to becoming: