Stock Market Investing - Part 2

  • by Graham Bond
  • 03 Apr, 2017
Investing in indexes

Spring has now officially begun and with it great excitement and positivity for what the season has in store. A quick change of the clocks and overnight the day has been transformed. Still 24 hours being counted but the mood is now more upbeat…..6pm dinner becomes 7pm BBQ in the garden….8pm and we get the lawnmower out. The more motivated ones amongst us see this transition as opportunity to get more work done, whilst others see the extra relaxation time.

The indexing of stocks and shares are not that different. Counted and recounted day after day but the mood changes. Gloomy one day and the next its full of joy. Which way you view it though depends on your outlook and point of view. One person’s low point is another person’s high. The FTSE 100 is seen with great optimism when 7300 was recorded but the pessimists may see that magic figure with great concern. It can’t go any higher……its heading for a fall.

Of course, the FTSE 100 is just one kid on the block, albeit a very popular one. It is and hopefully will stay the most followed indices around the World. But competition is never far away and a desire to mix things up. There’s a newbie in town, Bats Brexit High 50 and Bats Brexit Low 50.

The Bats Brexit High 50 is the Top 50 Companies from the Bats UK 100 index that gets most of their Revenue from the UK….at the time of writing it is not doing very well. Conversely, the Bats Brexit Low 50 are those Companies that get the smallest part of their Review from the UK. It is doing very well !

Brexit is having a huge impact on our Economy but it is a future factor. We are still in the EU….Article 50 has been triggered and yet the measurements of the £, the FTSE, the Budget, imports/export are already being affected. The surge anticipated wasn’t so vast but the overall mood for the future is being felt.

We can study an Index such as the FTSE for answers but it is just figures. We go back to the same rule of having your own Financial Plan in place and a yearly review to tweak/adjust any future changes needed. The hysteria tactics of the papers should not be a reason for making important financial decision, let time and advice be what motivates you.

Recent Posts

by Graham Bond 27 Apr, 2017

Choosing the correct Ethical or Socially Responsible investments will depend on your own beliefs and values. A starting point is to use a screening process.This will help you to analyse which types of industries and companies they would like to either include or exclude.

There are primarily two types of screening, positive and negative.

Negative Screening

The process of Negative Screening excludes investments that you might consider undesirable. For example you might want to exclude some of the following:

  • The arms or defense industry
  • Nuclear power
  • The tobacco and/or alcohol production
  • Gambling
  • Genetic Engineering
  • Third World debt/exploitation
  • Animal Testing

Positive screening

Positive screening helps to identify the businesses that demonstrate the potential to offer good quality, long-term ethical investment opportunities. The positive screening process will help you to avoid businesses that could encounter problems as their day to day operations might not be sustainable in the long term. Positive Screening might include companies involved with

  • Projecting a positive business focus
  • Energy conservation
  • Promotion of Equal Opportunities
  • Renewable Energy
  • Pollution control

Shareholder Engagement

By employing active shareholder engagement it is possible for shareholders and fund managers to encourage a more corporate and social business approach.

It makes sense to consider investing into companies that have the foresight and willingness to adapt.

by Graham Bond 26 Apr, 2017

Anyone seeking evidence that investment decisions can be hard often needs to look no further than the front page news. China, oil, VW and Glencore are among the assets that have made the headlines in the past few months after suffering sudden, unexpected and dramatic changes in price.

Investors with exposure to those volatile assets might be licking their wounds and reconsidering their positions. This is because many investors have an investment strategy that relies on their (or someone else’s) forecasts about the future. In the simplest terms, their starting point is a blank sheet of paper, where they build a portfolio of assets they think will do better than the alternatives. Sometimes those decisions are right; sometimes they are wrong.

We have a different starting point. Our investment philosophy is based on things we know rather than things we don’t know. For example, we know that financial markets do a good job of setting prices, so we don’t try to second-guess them. Instead, we begin with the belief that investors will, on average and over time, receive a fair return for investing their money.

Our aim is to give our clients access to that long-term return through broadly diversified, low-cost portfolios of assets that aim to beat the market average. The portfolios do this by using information in market prices that tells us about a security’s characteristics and its expected future returns.

The decisions we make about what assets to hold are based on decades of academic research rather than short-term hunches. This means we can focus on meeting your long-term goals rather than becoming absorbed by short-term market movements.

Generally speaking, investment decisions are hard, but if, like us, you start with information you know is backed by decades of evidence and build an investment philosophy and strategy around it, we think you can improve your chances of being a successful investor.

by Graham Bond 26 Apr, 2017
This weeks video is by Dr Robert Waldinger of Harvard University. He is the current director of the longest running study about human happiness. Hope you enjoy it
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