Understanding Investing


Understanding Currency Hedging

Investing in international assets exposes investors to currency risk. Hedging international investments can be a prudent strategy to help protect the investment from adverse foreign exchange movements, as well as to stabilise returns and increase diversification. When currencies move dramatically, as they have recently, it is always tempting to believe that trends will persist and that it is logical to change one’s hedging strategy to benefit from the movements. Read more about Understanding Currency Hedging
 


Understanding a Portfolio Approach to Investing 

Portfolios provide an efficient and rigorous way of implementing your investment decision, by combining a number of investments in a robust and logical manner. A good portfolio will include a wide range of asset types and fund managers. Read more about Understanding a Portfolio Approach to Investing
 


Understanding Core and Satellite Investing

The idea behind core and satellite investing is to allot the major portion of a portfolio's assets to core investments to get exposure to the broad market, be it in equities, property trusts or bonds. Read more about Understanding Core and Satellite Investing
 

 
Understanding Enhanced Asset Class Investing

Enhanced asset class investing involves constructing portfolios that reliably deliver the returns of a specific asset class. These portfolios are constructed by purchasing all, or a large number of the securities within an asset class. Read more about Understanding Enhanced Asset Class Investing
 

 
Understanding Investing in Small Companies 

The small company sector, also known as "small caps," is usually seen as a source of higher return compared to the large caps. The small cap sector is best defined as the 200 stocks between the S&P/ASX100 and the S&P/ASX300. Read more about Understanding Investing in Small Caps
 
  

Understanding the Importance of Dividends

When investing in equities, investors generally have one or two possible mindsets. To either hope to make a quick profit or invest for the long term. What they may not be aware of is the role dividends play in the total return from their equity investment. Read more about Understanding the Importance of Dividends

 

Understanding the Importance of Liquidity

The liquidity of an asset indicates how quickly it can be sold and converted into cash. For many investors, liquidity means how quickly they can exit an investment and access their money. Read more about Understanding the Importance of Liquidity

 

Understanding Volatility

Why are stocks and other investments volatile to start with? Why don't they follow a smooth path in line, say, with inflation or interest rates, or net earnings? Volatility is a form of market inefficiency. Market or stock volatility is a factor of supply and demand, which in turn reflects underlying uncertainty, either with the economy as a whole or with new corporate information. Read more about Understanding Volatility

 

Understanding Gearing

Gearing is a wealth accumulation strategy where borrowed funds are used to purchase investments. It is a strategy which increases your exposure to investment markets and can be an effective way to grow more wealth over time.  Read more about Understanding Gearing

 

Understanding Gearing Risk

Borrowing to invest is an effective way of increasing an investor’s asset class exposure, achieving tax benefits and increasing returns in the process. However, as with every aspect of financial planning, it can only be successful if implemented as part of a sensible strategy. Read more about Understanding Gearing Risk

 

Understanding Fixed Interest

Fixed interest is usually regarded as a relatively safe investment asset class. However, like any investment it does carry some risks. Read more about Understanding Fixed Interest

  

Understanding the Role of Fixed Interest in Your Portfolio

Fixed interest plays a number of roles within a balanced portfolio. These include dampening equity market risk, providing a source of relatively stable income, and as a return enhancement within the defensive part of the portfolio, relative to cash. Read more about Understanding the Role of Fixed Interest in Your Portfolio
 

 

Understanding Risks in Fixed Interest 

Fixed interest can experience low or even negative returns from time to time. As with all investments, the devil is in the detail. Read more about Understanding Risks in Fixed Interest Investments
 

 

Understanding the Difference Between Term Deposits and Fixed Interest

Before making an investment decision, it pays to have a good understanding of the difference between an investment in a fixed interest fund an investment in a term deposit. Read more about Understanding the Difference Between Term Deposits and Fixed Interest 

 

Understanding the Power and Pitfalls of Compounding

Compounding is simply the reinvestment of interest on earnings. Each year, if after-tax interest and earnings on the investments are positive and are reinvested, the capital base grows quicker and the subsequent years’ returns grow ever larger. Read more about Understanding the Power and Pitfalls of Compounding


Understanding Corporate Bonds 

When companies want to expand operations or fund new business ventures, they often turn to the corporate bond market to borrow money from investors. Read more about Understanding Corporate Bonds

   

Understanding Dollar Cost Averaging

Dollar cost averaging is an investment strategy to invest equal dollar amounts regularly and periodically over specific time periods into a particular investment or portfolio. By doing so, more shares are purchased when prices are low and fewer shares are purchased when prices are high.  Read more about Understanding Dollar Cost Averaging

  

Understanding Currency Hedging

Investing in international assets exposes investors to currency risk. Hedging international investments can be a prudent strategy to help protect the investment from adverse foreign exchange movements, as well as to stabilise returns and increase diversification.  Read more about Understanding Currency Hedging
 
 

Understanding Short Selling

Short selling is when you sell a stock which you do not actually own, in the attempt to make a profit from a potential decline in the share price. It requires a high level of presumed skill and it requires a deep understanding of the merits or weaknesses of a company, a willingness to ‘bet against the market’ and a willingness to sustain potentially unlimited losses. This is a very real risk. Read more about Understanding Short Selling

 

Understanding Emerging Markets

Emerging markets are the key factor in the future growth of world trade and global financial stability, and they will become critical players in global politics. They have a huge untapped potential and are determined to undertake domestic reforms to support sustainable economic growth. Read more about Understanding Emerging Markets

 

Understanding Real Estate Investment Trusts

A real estate investment trust (REIT) is a corporate structure whereby a number of small investors can pool funds and acquire large property assets or a portfolio of portfolios. Read more about  Understanding Real Estate Investment Trusts

Understanding Exchange Traded Funds

Exchange Traded Funds (ETFs) are funds that hold a portfolio of securities managed to match the performance of an underlying index. Because they are generally an efficient way to gain index exposure to various equity markets. Read more about  Understanding Exchange Traded Funds