Inflation
Inflation is the true enemy of building wealth and investors should put measures in place to protect against inflation’s corrosive downside. “Inflation” can be defined as “the state of affairs when the value of money falls and the prices of goods and services increase, other things being equal”. Interest rates move up and down from…
Net Tangible Assets (NTA)
The “net tangible asset backing per ordinary share” figure, often abbreviated “NTA”, is one possible measure of the worth of a share, although its usefulness is subject to some reservations. It can be compared to the market value of the share. In an ongoing company the various measures related to income tend to be more…
SPI
The Share Price Index Futures (SPI), which tracks the S&P/ASX 200 Index, is the most popular futures contract. To buy the SPI, a trader would outlay a deposit per SPI contract, which is a small percentage of the value of the contract. The value of the SPI 200 futures contract is $25 times the level…
Dividend Reinvestment
Many companies offer their shareholders an alternative to receiving dividends in cash, allowing the shareholders at their option to enrol in a dividend reinvestment plan (DRP) and to take up newly created shares instead (or to take a mixture of cash and shares). When these plans first became popular such shares were generally offered at…
Platform (master trust and wrap account)
If you see a financial adviser these days they will more or less demand that you invest via a master trust or wrap account, otherwise known as an administrative platform. Your adviser might even offer you a choice of platforms, with a different selection of managed funds or shares on each. Platforms can be confusing…
Dividend imputation
Before 1 July 1987 corporate profits were subject to two lots of tax. Firstly, companies paid company tax on their earnings. Only the “after tax” earnings were then available for dividend declarations. Secondly, individual shareholders paid personal income tax on any dividends received by them, despite the fact that the companies paying them had already…
The Scoreboard – Winning and Losing Stocks for 2008
The biggest dog in 2008 went to none other than beleaguered investment bank Babcock & Brown – its shares tanking by 99.4% to the year ending 17 December 2008. Anyone with $10,000 parked with the investment house in December last year, has less than the cost of a tank of petrol to show for it…
Winners of our Gold Giveaway
More than 22,000 investors and traders went into the draw to win the CompareShares gold giveaway – signing up to the CompareShares newsletter, the FatCat newsletter, or to the new social networking site MoneyConfessions. While investors can gain gold exposure via listed funds (one is aptly named GOLD and lists on the Australian Stock Exchange);…
Earnings
While it may seem like an obvious answer, the most important number in a company’s financial statements and the major reason why share prices go up is the company’s earnings. However many investors get confused as to what exactly “earnings” is and whether earnings relates to a company’s revenue or its profit. Company analysts at…
Top 5 technical indicators to trade commodities
What are the most popular technical indicators used to trade commodities over the short term (1-3 months), and do they differ depending upon the commodity traded? Response: The technical analyst will use a number of methods when reviewing commodity markets. These methods typically include such things as Price Action (pattern recognition, candle stick charts, Elliott…
