‘Factor investing' is all the rage at the moment. Also called ‘smart beta,' many exchange traded funds (ETFs) are using this strategy to great effect.
JP Morgan estimate that funds using this strategy hold assets of nearly $400 billion. A rise of more than 200% over the past five years.
So what is factor investing all about? And why is it growing in popularity?
Read on to find out…... ››› more
Asset allocation involves spreading your money across different asset classes. For example, investing a bit in shares, bonds, property, gold, cash and commodities. So why bother doing this? Why not stick your whole investment pot into shares? And how best can you apply asset allocation to your portfolio? Read on to find out…
Why opt for asset allocation?
The idea behind asset allocation is t... ››› more
Picking the right stocks to invest in isn't an easy feat. You just have to look at how many unit trust funds don't manage to consistently beat the market over the long-term. But there are some investing strategies that stand you in good stead to beat the market at its own game. Read on to find out more about these strategies…
Market beating strategy #1: Invest in ‘value’ shares
This inve... ››› more
Rebalancing is a great way of reducing your investment risk and getting better returns. By keeping your investment portfolio in check and taking it back to your original asset allocation, you can reap the rewards. So if you want to do it, how often should you rebalance your portfolio? And how can you add more money into your investment pot? Read on to find out this and more…
How often to reba... ››› more
When it comes to looking closer at particular companies, you might notice that financial journalists are more interested in earnings and profits than anything else. But concentrating on a company's return on capital employed (ROCE) can add another dimension to your understanding of a company's business. Let's take a closer look at what's going on…
Rising profits can be misleading
On the face... ››› more
Rebalancing your portfolio involves periodically buying and selling different asset classes within your portfolio to bring everything back to your original allocation. And back to your optimal mix of assets. In theory rebalancing seems to make a lot of sense. But in practise is it really worth the bother? Let's take a closer look…
Rebalancing could be worth the hassle involved
A couple of st... ››› more
When you invest in banks, you have to take into account that banks carry high levels of debt. And carrying too much debt can make them very risky. You want a bank to generate a good return, but not at the expense of carrying a massive amount of debt. So what's the best way to weigh this up? Let's take a closer look at how you can weigh up a bank's debt…
Examining a bank’s debt
A good measu... ››› more
Rebalancing is a simple strategy of keeping your assets in certain proportions. Periodically, you check these proportions. If any of these assets stray out of their proportion, you ‘rebalance' them. Rebalancing means you can forget about the daily ups and downs in the market. And your portfolio can benefit. Let's take a closer look at the benefits to your portfolio…
How rebalancing can bene... ››› more
You're looking to invest in a new share. You've done your research and you're pretty sure you're onto something good. There's nothing certain with investments, but there are a few things you can do to make sure you're on the right track. And calculating a company's return on capital employed (ROCE) is one of them. Let's take a closer look…
What is ROCE?
When you calculate ROCE, it shows you ... ››› more
When it comes to investing, whatever market it is, there are risks. But you can't let those risks get in the way of you making money in the market. You don't need to worry about what's coming next. What's important is to have a good risk management strategy in place. So what's the best way to do that? Read on to find out…
The performance of the market over the last few years
It’s a good id... ››› more
Weighing up banking shares to invest in is anything but easy. They're a tricky bunch to evaluate.
The financial crisis of 2008 showed just how risky banking can be. And they aren't always the most transparent of companies to look at.
The risk comes from the high level of debt banks carry. Let's take a closer look…
Have you thought about where a bank gets money from?
When you deposit m... ››› more
There is a simple misconception about the link between the stock market and the economy. If you can overcome this misconception, you'll be in a better position to make better investment decisions. So what is this misconception? And what should you do? Read on to find out…
The link between the economy and the stock market
There is a simple misconception that if the economy is doing well, the ... ››› more
The cyclically adjusted price earnings (CAPE) ratio shows you smoothed out earnings over a ten year period. You can use CAPE to work out whether investors are paying a lot or a little for earnings at the moment. Research done found that, on a broad basis, the CAPE ratio was right. Let's take a closer look at what the research showed…
The results from using the CAPE ratio are impressive
Resea... ››› more
As an investor, diversification is a very important part of putting your portfolio together. But once you have your portfolio, what's the best way to maintain it? How can you ensure you keep the diversification and balance you want? It all comes down to rebalancing. Let's take a closer look at how this works…
The ins and out of rebalancing
Have a look at the chart below…
Let’s ... ››› more
It might surprise you to hear that there are commonalities between tennis and investing. If you can apply the rules of playing defensive tennis to your investments, you'll prevent yourself from making the biggest mistake in investing. Here's what you need to know…
Investors and tennis players
Retail investors are like amateur tennis players. They make a lot more mistakes than points.
In h... ››› more
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