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.
Solo Oil isn’t the only stock in my portfolio but it is the one I’ve been watching this week. It has soared from 0.42 to 0.53 (BID) since last Friday. The spread is still ridiculously high at 7.55%. The games market makers play! They have triggered a lot of stop-losses this week and stopped the games of some day traders.
Regular readers will know that I write about being thrifty on Thursdays with the exception of yesterday when I didn’t have time to write a post. In January we shop around less because we have less money to shop with. It is a frugal month for most people after the excesses of Christmas. I actually spent more on my credit card so have an unusually large bill next month. This month has been a month of making investment decisions.
Researching investments can be difficult. The best way is to read all the annual reports of every company. That is a good idea if you are making a major investment but who has time to read them all?
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.
As a small investor, I’m always watching the market and this week my attention was turned towards the US markets. The Federal Reserve increased their base rate and this has global implications. The Bank of England decided to leave our rates unchanged, but for how long? There are already signs that the US dollar will appreciate against other currencies and my shares in GSK are finding favour again and seem a bargain compared to their October price. They have lost £2.00 a share in 2 months.
Many investors make an investment in a small company and hope they make it big. I have high hopes that Solo Oil will make it big with its shares in oil discoveries both in Tanzania and in the UK.
I’m watching interest rates around the world. It seems the Federal Reserve will be the first to normalise interest rates. It could be as early as next month but many pundits are betting on December. That could be the trigger for other central banks to raise their rates too. It would certainly have an effect on the value of the US dollar as more money would be invested in the US as international investors look for better returns on their funds. That, in turn, would have a negative effect on other currencies including the GBP.
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.
Oil underpins the global economy and so a low oil price should be good for the global economy. However, the global economy is out of balance and being manipulated. The global economy should be a free market but it is no such thing. It is a network of trade deals, monopolies and cartels. (more…)
Shouldn’t we base our investment decisions on rational analysis instead of prejudice? If you drill a lot of holes in the process of making a living and need to buy a new electric drill. How do you decide which make of drill to buy? Do you look at the specifications and reliability or do you buy an American drill because the Germans bombed the chip shop 75 years ago and some Jap shot Great uncle Albert? Do we base our decisions on hate or logic? (more…)
This week the offer for Premier Foods by McCormick was withdrawn but the offer of 65p a share did show the hidden value in the company. It seems Nissin is still increasing its holding in the company and their joint venture seems a good deal for both parties. Premier’s share price still plummeted down to 42.5. This is still better than it was before the offer. (more…)
The government is in favour of staying in the European Union and is at pains to tell us that the City of London is at the centre the global finance industry and makes shed loads of money for ’Britain’. You might think they make their money on the stock market spreads and on commissions. (more…)
Market makers seem to trade with no goal except to make money. On the AIM market, they often increase spreads to as much as 20% for no apparent reason. Trying to figure out what they were doing this week was a challenge as usual. (more…)
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…)
This week I’ve been following the progress of the oil well at Horse Hill near Gatwick which has been flow-tested with good results. It’s producing about 450 barrels a day which is good for all the small companies involved. For Solo Oil, this is another investment to bring in revenue. (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…)
The other day I read that the majority of members of parliament are now landlords and have their money invested in the London property market. It only needs the government to fund a London building programme to burst that bubble. No wonder they’re all scared of Corbyn getting into number 10! (more…)
We can never be sure what the future will hold, but I think this will be the year when inflation starts to creep up again. Competition in many areas such as the supermarkets was fierce in 2015. The oil companies had to compete too with a glut of oil and that is seeing producers with higher costs disappearing. The world economy has seen tight money and increasing competition. (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…)
I have noticed recently that many company directors don’t seem to care about shareholders until they need capital. Shareholders need to be kept informed and this is doubly true for small companies on the AIM. They should have a director whose sole responsibility is to engage with investors. (more…)
The FTSE 100 is up this morning after some positive news from the US, but investors are still nervous. Private investors expect a real terms return on their investment that reflects the risk they are taking. (more…)