Investing offshore can benefit your portfolio.
It can be a good way to diversify your investment portfolio. And it gives you the chance to get into some potentially lucrative investments you may not have access to in your home market.
But it comes with a downside. It exposes you to considerable exchange rate risk.
So what exactly is this exchange rate risk and what does it mean for your i... ››› more
Many companies on the Johannesburg Stock Exchange have operations overseas. This is particularly so with the Top 40.
Before investing in a company, it makes good sense to check out how big a company's overseas operations are.
Why? Because you're exposing yourself to exchange rate risk.
Here's what you should check out before investing…
The effect of exchange rate risk on a compan... ››› more
When you invest, especially in large companies, there's a good chance that some of its revenue comes from overseas.
If this is the case, the company comes with exchange rate risk. This is the risk that an exchange rate will work against the company's revenue streams, hurting the bottom line.
So how can exchange rate risk affect a company?
Let's take a closer look…
Where the risk f... ››› more
If you decide to trade contracts for difference (CFDs), before you even think about putting your first trade on, you need to work out how you're going to manage your funds.
You'll never be 100% accurate with your trades, so it's vital you have a strategy in place to limit your losses.
As CFDs are geared financial products, with the potential to make healthy profits from small moves in share ... ››› more
Last month, the JSE All Share Index 40 (ALSI 40) fell by 3.2% and broke a crucial level that I've been watching.
By breaking this level, the JSE has entered into the “Deathly Crocodile's Mouth.
And that means, I expect the stock market to fall down another 7.75%.
But why wait for the fall when you can bank an easy 111.29% trading gain?
The Deathly Crocodile’s Mo... ››› more
A whole host of different companies, large and small, make up the Johannesburg Stock Exchange.
A lot of investors put the associated risk of investing in a company down to its size. But just because a company is large doesn't mean that it comes with no risk.
So what's your best bet to reduce your overall investment risk?
Let's take a closer look…
The link between company size and... ››› more
The commodities market is a vast one. With South Africa being so rich in commodities, like gold and platinum, perhaps you're interested in putting some money into the market?
Before you make any decisions, you need to know more.
So what exactly is the commodities market? How can you trade and invest in it? And how is investing in commodities different from investing in other financial instru... ››› more
When it comes to investing for the long-term, you don't want to take on huge amounts of risk to increase your returns.
Yet there is a way you can increase your returns without taking on extra risk.
So how can you do it?
Read on to find out…
An investment strategy that can pay off over the years
The idea behind this investment strategy is simple. You need to focus on investing... ››› more
The rand has been under severe pressure this week.
On Tuesday, the Reserve Bank's quarterly bulletin revealed the current account deficit ballooned over the second quarter. This led the rand sharply weaker.
Making matter worse for the local currency is a strong dollar. This is putting further pressure on the rand.
And with mining and manufacturing data out today, expectations are that the... ››› more
Do you notice that more often than not, you probably had the good advice on how to prevent your trading losses before you made them?
But for some reason you just keep ignoring it - and you keep making the same mistakes to the detriment of your trading account.
Today I'm going to re-iterate the four trading tips the novice traders make the fatal mistake of ignoring.
1. Adjust your expecta... ››› more
The rand fell to three-week lows yesterday as investors turned away from riskier assets.
But today, the local currency is trading slightly stronger.
Let's take a closer look at what's going on with the rand…
The rand bounced back after weakening under pressure
The rand strengthened somewhat bringing it “back within a recent trading range,” reports Fin24. This after the local ... ››› more
Since the financial crisis struck, across the world interest rates fell to try to keep the global economy ticking over.
But record low interest rates mean that investors are struggling to get a decent return on their cash. One of the biggest beneficiaries of this are junk bonds.
So why are investors turning to junk bonds? And what are the risks of investing in junk bonds?
Let's take a clo... ››› more
“Trading is nothing more than gambling!”
“Trading is like a casino where the house always wins!”
These are a just a few things my friends used to tell me, when I started trading.
But that's when I told them, they have to change the way they look at things when it comes to trading the markets
You see, my friends didn't have the tricks and tips to think like a casino. Instead, th... ››› more
Investing on the stock market is risky. But it's the risk that makes people invest. Without taking on risk, there's no chance of a potential reward.
So what can you do to minimise the risks you take on?
There are some easy-to-apply techniques to follow that can lower your chance of losses. And they can boost the potential profits you can make from your investments too.
Read on to find ou... ››› more
Risk management is a vital part of investing and trading. If you have discipline and stick to the risk management strategies you have in place, your portfolio will perform better.
Take stop losses for instance. It's easy to set a stop loss when you buy shares, but it's another thing when it comes to sticking to them. You might want to hold on just that little bit longer just in case the share p... ››› more
Many investors spend their investment career battling against the market. This leaves them taking on too much risk and not reaping the rewards.
You buy into a share. The share price plummets, but you hold on and in the process lose money.
Or you buy into a share. The share price rockets, but you sell out quickly to grab profits when there's still a lot more to come.
So how can you ensure ... ››› more
If you want to short sell a share, you want to profit from its share price falling.
By short selling a share, you'll borrow it from an existing owner, pay a fee for the privilege and then sell it back.
You can use a number of trading instruments to short sell. These include single stock futures, contracts for difference and options.
So what are the risks with short selling? And how can y... ››› more
If you look at the bond market, the safest types of bonds you can invest in are government bonds. This is because governments rarely go bust. And if things get tough, governments can always resort to printing more money.
But it's not quite as easy for companies. African Bank bonds are a perfect example of what high risk can do to corporate bonds.
Let's take a closer look at what determines h... ››› more
Turn on the news and the headlines are chock-full of unfolding or ongoing geopolitical events somewhere in the world.
The stock markets have fared well so far, but the world is a fragile place.
So how can you ensure your investments don't bear the brunt of a stock market wobble?
Read on to find out…
Discipline is key to surviving stock market volatility
Unless you have a cryst... ››› more
When global stock markets continue to climb, sure enough there will be those who come out to say the end of the bull market is near. It's time for the bears to have their turn.
So if a bear market is around the corner, how can you prepare?
Let's take a closer look
How investors behave
It’s funny how the behaviour of investors works…
Throughout stock market history, investors show ... ››› more
Disclaimer Note that FSP Invest, a division of Fleet Street Publications (Pty) Ltd, is a research house and not a registered broker, financial advisor or financial service provider. Our editors and customer services teams also do not give personal investment advice. The advice in this website is general advice only and may not be appropriate to your particular investment objectives, financial situation or particular needs, so before investing or if in any doubt about your personal situation, you should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Board.
We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found in this publication.
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 newsletter. However they have signed restraints to prevent the abuse of their position as contributors to this publication.