2020 has been one hell of a year. Coronavirus has ravaged most markets and yet certain stock markets have hit record highs.
Whatever the reason for the run up, the obvious divergence of share prices from the underlying reality seems to be all too apparent to professional investors.
So, is it time for you to hit the big red button? Is now the time to sell everything?
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The economy is opening up again following lockdown.
Restaurants and hotels are opening their doors again, so it might sound like a good idea to take a bet on these companies share prices recovering quickly now…
But before you do that, just give me a moment to explain why these sectors, and specifically two stocks in these sectors aren't headed for a recovery yet.
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Did you know…
The US economy is in the deepest recession in living memory.
Also, the US Federal rate has dropped from 2.25%, taking the borrowing interest rate to 0.25%.
And yet, in the last quarter, the Dow Jones and the S&P 500 have baffled the world having the best quarterly rallies since 1998.
In the last three months, each stock market has surged more than 20%.
Now I don... ››› more
The gold price is up 55% in the past 12 months in rand terms!
In dollar terms its up 13% this quarter alone - making for its best quarter in years.
It currently hovers just below $1,800 - but all indications are that it will hit the $2,000 mark soon.
Discover: 103% gains on the table for savvy investors, thanks to this... ››› more
Bidcorp's share price is hitting a ceiling after a V-shaped recovery from the March lows. The R280 to R290 is an area of congestion for the share price and a sustained break above R290 is unlikely. The downside risk is a return to the R250 level. We'll look at the chart in a minute.
Today marks BidCorp's financial year end and the past 6 months have been a tough environment with significant r... ››› more
The rise of the World Wide Web turned the world of shopping on its head.
One company that cashed in massively was the USA's Amazon.com.
This company is now the biggest eCommerce retailer in the world. And, in spite of Covid-19, lockdowns and (in case you've forgotten) a simmering trade war between the US and China, Amazon's share price has just reached all-time highs.
When looking eas... ››› more
You know the saying…“Out of crisis comes opportunity”?
Well, today I'm going to share two investors who followed this “investment mantra” and made a fortune.
Plus, I'll show you a way to access some great opportunities in our market that exist right now thanks to the pandemic.
"There are decades where nothing happens; and th... ››› more
Ethereum (2nd largest crypto by market cap) has been one of the best performing crypto-currencies this year.
Last year, I mentioned that the crypto-currency was about to undergo a major upgrade in 2020.
With the upgrade launching in July, it's about to make Ethereum much faster, more secure and better for DApps (Decentralized apps).
Ethereum 2.0 also contains the promise of an entirel... ››› more
It's very hard to make sense of markets right now.
On the one hand, it's crystal clear the economy is in a mess. Unemployment is even higher than the worst of the Global Financial Crisis of 2008. The damage done by lockdowns cannot be easily undone.
On the other hand, governments have pumped unprecedented amounts of money into the system and the market seems to be on an unstoppable rise. J... ››› more
The word “investing” might conjure up men in suits, big deals around boardroom tables and the exchange of millions of rands.
But today I'm here to tell you that investing is not just for the rich, it's not just for super smart financial gurus. And you don't have to be the Wolf of Wall Street to start investing.
Even if you have only a few rands to spare, you can start investing today.... ››› more
Much of the 1920's was a time of great prosperity and growth in the US.
Many technological developments like cars, radios, electricity became available to the American people.
This economic boom fuelled the fast-rise of the US stock market.
Everybody owned stocks, not only investors. Entrepreneurs, nurses, taxi drivers, you name it. It was everybody's ball-game.
From 1920 to 1929, ... ››› more
Last week I received a letter from a Red Hot Penny Shares member asking about dividends from companies in our portfolio.
‘X' asked for the companies that pay the biggest dividends.
But the answer to that question is a bit more intricate.
You see, a company selling at R1 paying a 5c dividend could be more attractive than a R10 share paying a 30c dividend. But the 30c dividend is techn... ››› more
The final theme in our 6-part series is Healthcare and Pharmaceuticals.
While the global pandemic seems to be “under control” and vaccine trials on the go, there's a continued focus on healthcare, hospitals and medication. These form part of a defensive sector that is generally less cyclical.
In preparation for an increase in Covid-19 patients the healthcare sector ramped up medical e... ››› more
Over the past few weeks, many clients have contacted me to discuss their prospects in the face of looming retrenchment and salary cuts. Some are facing early retirement; others have been forced into unpaid leave which means their savings are starting to suffer. All of them are afraid of what this means for the future.
There is no question, the economic impact of the Covid-19 pandemic and the r... ››› more
I bought my first shares in the midst of the 2008 financial crisis.
My first buy was Old Mutual shares, and the price rose by more than 211% in the 18 months following my buy…
I rolled some of my returns into a property company, and an industrial stock - in the end I turned a couple thousand rand as a student into enough money to pay for my studies, put down a deposit on my first propert... ››› more
This week we reveal the second last theme in our 6-part series set to perform in the new economic reality, which will evolve as global economies open and start recovering post Covid 19 lockdowns.
Part 5 - Precious Metals:
Precious metals provide diversification that protects your portfolio in bad times. But can also benefit in the good times. Investing in the physical... ››› more
If you've been following mainstream economic news over the past month, you'll probably think the world is in a much better place. You'll have heard about a variety of drug trials on Covid-19 vaccines.
News from companies like Johnston and Johnston, Merck, Moderna, Novavax all seem to be buoying investor sentiment.
The slightest hint of a potential solution to the Coronavirus problem and ma... ››› more
Did you know there a number of problems that can arise when crypto trading or exchanging?
Not all exchanges support the necessary coins or trading pairs.
You also need to trust the exchange you're using in case your cryptos disappear.
And of course, you have to pay certain fees like commission for exchanging cryptos.
The good news though, is there's a technology that can solve these... ››› more
The world is in turmoil!
Although looking at global stock prices you might not believe it.
But let me tell you, despite the insane market recovery, economic chaos and uncertainty are still the order of the day.
And, when you're reviewing your potential investment options, it's not surprising if you feel like you've been dropped in the middle of the jungle with nothing but a survival kn... ››› more
Eskom recently submitted documents to the Centre for Environmental Rights (CER) stating that it could possibly keep its Grootvlei, Camden and Hendrina power stations open as late as 2030. These are all power stations at the end of their lives, that would have been shut in part starting this year!
Eskom is doing this to keep extra capacity in the grid, and avoid load shedding.
But here's t... ››› more
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We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found on this website.
Remember: Never invest more than you can afford to spare and that the value of any investment, and the income derived from it, can go down as well as up. The past is not necessarily a guide to future performance.
Editors or contributors may have an interest in investments commented on in this website.