magazine archive
magazine archive
Education
What does a high share price mean?
Thursday 23 Jan 2020A lot of investors presume that a stock priced at £10 is much more expensive than something priced at 250p. Yes, you need more money to buy a single share, but you can’t learn anything about how the equity is valued from its share price. Classic methods of valuing a company include comparing a...
The difference between bottom-up and top-down investing
Thursday 16 Jan 2020All investors want to make money from equity markets but you can go about it in many different ways. Styles like growth, value and income are widely understood, as are buying shares directly or using funds or investment trusts. And within the wider funds space there is the age-old debate about...
What portfolio rebalancing is and how it can help with investing
Thursday 28 Nov 2019Those who seek to make money from the markets are often looking to balance out the risk of loss with the potential for reward. Typically the higher the risk, the higher the possible reward and vice versa. The proportion of your portfolio you allocate to distinct asset classes will therefore depend...
Discover a great tool for valuing high growth companies
Thursday 14 Nov 2019The ‘Rule of 40’ is increasingly being adopted by high growth company executives as an important metric to help measure the trade-offs of balancing growth and profitability. Most retail investors may be unfamiliar with the term yet it is simple to understand and easy to apply. It can help you...
What are consensus earnings forecasts and why do they matter?
Thursday 07 Nov 2019The term ‘consensus’ is usually used to describe a broadly-accepted opinion or decision among a group of people. When applied to company earnings, it refers to the average of a collection of analysts’ forecasts. According to the efficient market hypothesis theory, made popular in the 1970s by...
What to expect from investing in different assets over the long-term
Thursday 31 Oct 2019Before embarking on a journey it is important to have a realistic expectation of how long it will take, how bumpy or smooth it will be and the likelihood of reaching the final destination. Likewise there are many types of asset to choose from in the capital markets which will be appropriate for...
When to use price-to-book value
Thursday 17 Oct 2019It has long been a vital tool in helping investors to value shares but price-to-book value (PBV) has fallen out of favour in recent years. For most of the past decade investors have been drawn to growth stocks because that’s where the best returns have been earned. The PBV value tool is not always...
What does a good and bad portfolio look like?
Thursday 03 Oct 2019Portfolio construction has an important part to play in the investment world, but receives very little attention. It’s a shame because it can make a huge difference to long-term performance as well as reduce stress to help investors stay the course. This article looks at the benefits of building a...
What are dividends and when do they get paid?
Thursday 08 Aug 2019Dividends are rewards paid by companies to their shareholders, typically in cash or sometimes as shares. These payments tend to be distributed twice a year for individual company shares. Many investment funds and exchange-traded funds (ETFs) also pay dividends to their investors and distributions...
What are adjusted earnings and why do companies use them?
Thursday 01 Aug 2019When companies report their financial figures, often the final figure they want you to see is not the one that simply represents all of their incomings minus their outgoings. A growing number of firms think if you just take the statutory figures they provide, which usually stick rigidly to industry...