Just the way we think about finance can help us save money and make money. Finance can be about risk and a diverse approach to finance can limit that risk. Using a diverse approach when we are investing is fairly common but we can also use a diverse approach when we are buying too.
Some investments take a long time to come good and are much riskier than the FTSE 100 companies. We can limit risk by diversifying and limiting our exposure quantitatively. These investments often lose money, at least on paper in the short-term, but can give a good return in the long-term.
Peer to peer lending as part of an investment strategy reduces risk. I’m still lending through Zopa at an interest rate of 4.2% through Zopa Classic. There are three different types of account including an access account paying 3.5% which beats the accounts offered by the banks easily. You don’t get FSA protection with Zopa though. I’ve been investing through Zopa for 5 years now and have accumulated a nice return.
When you’re investing in the stock market there are always political and global risks. Will the UK leave the European Union? It could affect trade and so it is a risk. The refugee crisis and the military action in Syria is a risk. As one risk disappears the politicians create another risk, this leads to a volatile market. You can lose money in a volatile market and you can make money. (more…)
All investors need a crystal ball right now. Will Britain leave the EU? Will interest rates change? Will the oil price go up or down? Will Trump be the next president of the United States? Will things get even worse in the Middle East? Will the global economy go back into recession? (more…)
When the FTSE 100 was over 7000, some pundit was predicting it would crash 20%. That would make it 5600, is that the bottom? Is that the magic number where we can all breathe a sigh of relief? Maybe not… (more…)
I was reading a forum this morning and someone suggested the reason by the world’s stock markets were so unstable was the robots having a laugh at our expense. Many transactions are now done by computers these days! (more…)
Reflecting on this week, I wondered about our local Christmas lights. They aren’t much to shout about. I wondered if reflective ribbon could be used or fluorescent paint to make it look a bit more like Christmas. There are lots of lights they are just not very Christmassy. Maybe, we should all wear something reflective? (more…)
Financial uncertainty seems to be caused by political considerations and lack of regulation. The problems in Ukraine seem to have taken a backseat now to the problems in Syria. The drop in economic growth in China seems to be less of a worry too. Those problems are still there, but we have more important things to worry about now! Get used to more uncertainty! (more…)
Some people are beginning to wonder if the policy of austerity favoured by many western nations is really a big mistake. The national debts are increasing, tax revenues are decreasing and people are suffering as a result. (more…)
At one time all the traders in the City of London had East end accents. Now they are all Oxbridge educated and talk posh, they also panic when sentiment goes against the market. They don’t appreciate that they are the sentiment. So the Shanghai composite took a dive on Monday and we saw posh boy panic in London. (more…)
It’s too early to predict the full result of the general election, but it seems likely that the Conservatives will have a thin majority. We can expect more austerity and cuts, so how will that affect investments? (more…)
It seems that traders on the stock market rely on the guidance of brokers and the pundits in newspapers, rather than doing their own due diligence before trading. We all rely on others to analyse complex annual reports, we can’t read them all; but many pundits seem to amplify minor problems. (more…)
The FTSE 100 climbed to new highs this week and although this gave investors confidence, red lights flashed on my dashboard. With interest rates still rock bottom and even negative interest rates being considered, institutional investors are looking for safe havens on the stock market. (more…)
The weather is getting colder and wetter in the UK as winter approaches. My house is fairly warm relative to the temperature outside. Einstein knew the importance of relativity. If we were all the same height, there would be no tall people or any short people. We are only short or tall relative to others. (more…)
Last week, I wrote about supply and demand within markets. Supply and demand effects all free markets. The housing market in the UK, particularly in the south is seeing rising prices, because demand is high and supply is low. (more…)