Investing

Down markets need larger returns to return to the starting point

Down markets need larger returns to return to the starting point

Many of us are too heavily invested in shares, but won’t realise it until it’s too late. We will get scared and panic sell. A common reason for this surprise reaction is our inability to perform basic maths.

A common miscalculation is that if stocks go down 30% then that is fine. They only need to go back up 30% and I’ll be back to break even. This isn’t […..]

A recession is coming

A recession is coming

Hold on to your hats people, an economic recession is coming. Unemployment will rise. House prices will fall. Stock markets will crash.

The results of an economic recession can be devastating. Especially to those who have yet to experience one. The last one was in 2007-08.

That means there are a whole lot of people under the age of 35 that may have not experienced a recession in their working (earning income) lifetime […..]

Lowest cost index funds are not always the best

Lowest cost index funds are not always the best

Stock index funds are all the rage these days. They occupy about 20% of the global market and this amount is increasing every year. The main driver of the conversion of investors from active to passive stems from the fact that many active funds (after fees) are delivering worse results than passive index funds.[…..]

Dollar cost average or lump sum?

Dollar cost average or lump sum?

Most of the time, index fund investors will invest at regular intervals, such as weekly or monthly. Occasionally though, we may be lucky enough to come across some extra money. This may be from the sale of a house, or maybe you are thinking about starting to invest.

Naturally, this leads to one of the most common investing questions. Should I invest it all at once (lump sum), or spread the contributions out over a longer period of time (dollar cost average)?

Beginners guide to investing part 14: Staying the course

Beginners guide to investing part 14: Staying the course

With the rapid rise of smartphones and the internet, we are inundated with information on a daily basis. This is both a blessing and a curse.

Readily accessible information is fantastic to discover new information that will improve our lives. The problem is that we are easily distracted. I am anyway. I’m sure I’m not the only one? Echo, echo, echo.

These distractions take us away from the valuable information we should be paying attention to and […..]

Beginners guide to investing part 13: The impact of inflation and fees on returns

Beginners guide to investing part 13: The impact of inflation and fees on returns

When reviewing our investment results, all may not be as it seems. Is that 7% return, actually 7%? Not if you have left out fees and inflation in your calculations. Two small, but not insignificant considerations that can eat away at […..]

Beginners guide to investing part 12: Running the numbers

Beginners guide to investing part 12: Running the numbers

Whether you are a buy and hold investor, or a buy and sell investor you will still be interested in reviewing your stocks. It is not as simple as it first appears.

We will often receive an annual report from our stock broker or online provider of how your stocks have done that year. 5%, 9%, 2%, -5% and so on. So, if our stocks over 10 years have returned 70% in total, that is 7% per annum right? WRONG. […..]