Simply put, diversification is not having all your eggs in one basket. In other words, spreading your investments across different shares, sectors and assets. This is because investing is risky. And by employing some diversification, you can offset some of this risk you take on. Let's take a closer look at why you should diversify your portfolio…
The risks you take on when you invest
Letâ... ››› more
Investing in shares comes with risks. And to take care of the downside risk, stop losses are a must. You decide how much of your initial investment you're prepared to lose and set your stop loss at that. Then if the share price falls and hits that level, you sell. Simple as that. But using stop losses also comes with its issues. Read on to find out more…
Setting a stop loss level
Using a ... ››› more
Many investors spend too much time worrying about what tomorrow will bring on the stock market. The most important thing is to look at the bigger picture. You need to take a wide lens approach rather than a microscopic one. And if you take this approach, you'll make better investing decisions. You just need to have your risk management strategy in place. Let's take a closer look…
How to su... ››› more
Whether the markets are falling, flat or rising, there are some companies that will continue to do well. Their share price might bob about a bit, but intrinsically they're fantastic companies. The question you may be asking now is how can you find one of those shares? Well there are ten things that great companies tend to have in common with each other. If you can find a company with these traits,... ››› more
All investors have their bad habits. Some of these bad habits are more costly than others. One expensive bad habits is holding onto a share that's not performing. You're determined not to sell until the share price rises back up to the level you bought it at. So what's so bad about holding onto shares like these? And what can you do to make sure you get rid of shares at the right time? Read on to ... ››› more
It's not just about buying shares and ensuring you have a diversified portfolio. To help you achieve success in the markets, you also need to make sure you've got your balance right. And the best way to achieve that is to rebalance your portfolio on a regular basis. So what does rebalancing entail? Read on to find out…
Decide on the asset allocation of your portfolio
How you allocate your... ››› more
This is a dilemma many investors want to face. What should you do if one of your investments just keeps performing? Should you just hold on hoping that the share will rise forever? Or should you set a limit and cash in? Well there's one simple way that allows you to bank profits and keep riding the share price wave higher. Let's take a closer look at how this works…
When to bank some profi... ››› more
Any decision you make when it comes to your investments should follow a clear plan. Unfortunately the vast majority of investors make investment decisions without a plan. They just do it, with no or little methodology behind their decision. But if you can apply a clear plan to your investments and stick to it, you're in a far better position to profit. Let's take a look at how to achieve this…
... ››› more
When it comes to investing and trading, there are certain traits that help you succeed. These include patience and discipline. But when it comes to traits to avoid, there's one trait that you don't want to have. That is overconfidence. Overconfidence spells investor disaster. So how does overconfidence work against you? And how can you beat overconfidence? Let's take a closer look at this trait to... ››› more
Human behaviour plays havoc with investing. It turns the most rational investor into an emotional train wreck. Even without you knowing it, you can make silly mistakes. The best way to combat these emotions is to identify them and have strategies in place to deal with them. Let's take a closer look at two of the worst investor behaviours…
Adverse investor behaviour #1: The impact of gains ... ››› more
Preference shares are a special type of share that some companies issue. On the JSE at the moment, nearly 30 companies have preference shares listed. If you're looking for income over the long-term, look to preference shares. So what is a preference share? And why invest in preference shares? Read on to uncover what you need to know…
What are preference shares?
Preference shares are diffe... ››› more
On Thursday 22 May the South African Reserve bank kept interest rates flat. But in the same speech the reserve bank governor, Gill Marcus, warned everyone…
She said they expected the worst quarterly GDP figures for the South African economy since the 2008 recession.
And with platinum workers still striking, around R10 billion worth of their wages alone have disappeared from our economy thi... ››› more
A company that consistently grows its income is a sign of a great company to invest in. It shows the company is well-run. And this is something every investor is on the lookout for. So how can you find a company that manages to grow its income? And what are the benefits of investing in a company that consistently grows its income? Let's take a closer look…
How to calculate a company’s fr... ››› more
If you're trying to work out whether a company's worthy of your investment or not, look at the cash. It's easy to look at profits and ignore cash. But a number of accounting issues affect profits. And good profits don't equal lots of cash in a business. So you need to look at a company's cash flow. Read on to find out how best to do this…
You need to concentrate on free cash flow
Cash flo... ››› more
When stock markets hit new highs, it can make investors very wary. Look at the Johannesburg Stock Exchange. It's been hitting record highs again. But studies show that investing when the stock market is at a new high isn't actually a bad strategy to follow. It can pay off. Let's look a little closer…
A profitable investment strategy
Let’s look at the US market…
Since 2009, the US stoc... ››› more
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