Connect with us

Trading

Determing where you will invest

Published

on

gbaf1news

When you have already decided to start investing for your future, a million dollar question in investing is “Where to invest?” And the answer you are looking for – is the place where you can maximize your wealth is the place where you should invest.
Now this answer differs from people to people depending on their risk bearing ability. If a person has a high risk bearing ability he may go for a high risk investment say Equities and a person with low risk bearing ability may go for lower risk investment i.e. Fixed Deposit (or FD).
Investments are of various types and are in various forms. Few investments are based on fixed returns and few are based on market conditions and of whose future cannot be predicted. But remember, not all of your money should go into one source of investment.
Investment types can be broadly classified into: Cash, Fixed Interest Securities (Bonds & Gilts), Property, and Shares.
Within each asset class there are investments to suit different kinds of risk, duration, returns and liquidity.

  1. Liquid Investments: Liquid investments are investments that could be turned into cash easily and resume various forms, such as savings accounts, Certificates of Deposit, Money Market Accounts, and other interest –bearing accounts offered by banks.
  2. Cash: Cash deposited in a bank or building society can earn interest. The amount of interest that you will get depends upon a number of different things. Savings in deposit accounts or National Savings products which offer interest, is the way most people start investing.
  3. Fixed interest securities (Bonds & Gilts): Bonds are issued by governments and companies as a means of borrowing money. Government bonds are known as gilt edged securities or “gilts”. Bonds issued by companies are known as corporate bonds.

Investment needs to be guided by a set of objectives. The main objectives taken into consideration by investors are capital appreciation, current income and safety of principal. The main aspect that affects the objectives is risk. Some investors are risk takers while others try to reduce risk to the minimum level possible. Identification of constraints arising out of liquidity, time horizon, tax and special situations need to be addressed.
The types of investments can be broadly classified into 3 groups:

A)    Debt – Low risk, 6-12% returns
B)    Equity – High risk, returns linked to market performance
C)    Commodities / bullion and such – Low risk, low returns.

The investments can also be classified into:
Fixed income investments: When you invest in Fixed income investment types you will typically have a number of guarantees provided by the issuer, such as

  • Guarantee that your savings will be returned to you on a certain date, and
  • Guarantee that you will be paid a regular income (interest payments)

Growth investments: This section includes common shares, mutual funds, Exchange Traded Funds (ETFs) and segregated funds. Growth investments, or ownership investments, typically are considered riskier because they do not have guarantees; the value of investment is not guaranteed; the income paid by the investment is not guaranteed, and there is no guarantee that the invested savings will be returned.
So how does this work? For example, if you own the common shares of a corporation, then you actually own a portion of the company and its business operation. If the business does well, then the value of your ownership (the common shares) should increase, and as a result the company in some cases will at the discretion of the issuer pay you some money while you own the shares (in the form of dividends payments).
Hybrid investments: These type of investments cannot be strictly classified as neither a Fixed income nor Growth investment because they possess characteristics that may be those normally associated only with a Fixed income investment or a growth investment.
Investment that fall into this type would include Index – linked Guaranteed Investment Certificates (GICs), Principal Protected Notes (PPNs), Convertible bonds, Capital Trust Securities, etc.
A Hybrid investment is a trickier type of investment of to understand because its characteristics can be confusing.
Deciding how to invest? Understanding the basic types of investments that companies issue and how they fit in the corporations’ capital structure can be very helpful because the majority of retail investments originate from this structure.
You should also keep in mind that capital markets are constantly evolving and new variations of the two basic capital structures (equity and debt) are constantly created. When looking at specific investment, you should try to first identify and classify the investment’s capital     characteristics.
Mostly people consider short term investment plans to make money quickly. So what do these plans contain? Short term investments allow you to invest an amount of money at a high yield interest rate, and gain access to the return sooner rather than later. So if you are interested in short term investments, talk to your financial advisor. He or she can tell you what the best short term investment opportunity you can use will be.
While planning investments it is crucial to know the strategies of managing it. There are two ways you can manage your investments- active and passive.
While investing you should first analyse what kind of investor you are according to your risk-taking capability.

  1. Aggressive investors: They use a stock market investing strategy that involves greater stock volatility, which is higher risk. For example, if an you put your money into an older apartment building than invests more money renovating the property, you are running a risk and you can call yourself an aggressive investor. In this case you expect to be able to rent out the apartments for more money than the apartments are currently worth or to sell the entire property for profit on their initial investments.
  2. Conservative investors: They often invest in cash. Conservative investment options may include mutual funds, interest bearing savings account, money market accounts, Cash deposits and US treasury bills. These investments (long-term investments) are relatively safe, low risk investments that grow over a period of time.Moderate investors: They often invest in bonds and cash and may occasionally participate in stock market. Moderate stock market strategies include low or moderate risk.

Hence, before you start investing, it is very important that you learn about the different types of investments, and what those investments can do for you. You also need to understand the risks involved, and pay attention to past trends as well.

Trading

Energy stocks drag down FTSE 100, IG Group slides

Published

on

Energy stocks drag down FTSE 100, IG Group slides 1

By Shivani Kumaresan

(Reuters) – London’s FTSE 100 slipped on Thursday, weighed down by falls in energy stocks as oil prices slid after a surprise increase in U.S. crude inventories, while IG Group tumbled on plans to buy U.S. trading platform tastytrade for $1 billion.

The blue-chip FTSE 100 index lost 0.4%, while the domestically focussed mid-cap FTSE 250 index also slid 0.4%.

Energy majors BP and Royal Dutch Shell fell 3.2% and 2.5%, respectively, and were the biggest drags on the FTSE-100 index. [O/R]

“What is holding back the UK is a lack of tech stocks to capture the ‘rotation’ back into tech seen since Netflix results,” said Chris Beauchamp, chief market analyst at IG.

“Stock markets overall are much quieter today, looking so far in vain for a new catalyst for further upside.”

The FTSE 100 shed 14.3% in value last year, its worst performance since a 31% plunge in 2008 and underperforming its European peers by a wide margin, as pandemic-driven lockdowns battered the economy and led to mass layoffs.

British Prime Minister Boris Johnson said it was too early to say when the national coronavirus lockdown in England would end, as daily deaths from COVID-19 reach new highs and hospitals become increasingly stretched.

IG Group tumbled 8.5% after announcing plans to buy tastytrade, venturing into North America after a stellar year for the new breed of retail investment brokerages.

Ibstock jumped 7.3% to the top of the FTSE 250 after the company said fourth-quarter activity benefited from better-than-expected demand for new houses and repairs.

Pets at Home Group Plc rose 2.2% after reporting an 18% jump in third-quarter revenue, boosted by higher demand for its accessories and veterinary services as more people adopted pets during lockdowns.

(Reporting by Shivani Kumaresan in Bengaluru; editing by Uttaresh.V and Mark Potter)

Continue Reading

Trading

Wall Street bounce, upbeat earnings lift European stocks

Published

on

Wall Street bounce, upbeat earnings lift European stocks 2

By Amal S and Sruthi Shankar

(Reuters) – European stocks rose on Wednesday after Dutch chip equipment maker ASML and Swiss luxury group Richemont gave encouraging earnings updates, while investors hoped for a large U.S. stimulus plan as Joe Biden was sworn in as president.

The pan-European STOXX 600 index closed 0.7% higher, getting an extra boost as Wall Street marked record highs.

All eyes were on Biden’s inauguration as the 46th U.S. President, with traders betting on a bigger pandemic relief plan and higher infrastructure spending under the new administration to boost the pandemic-stricken economy.

Tech stocks rallied to a two-decade peak in Europe after ASML Holding NV rose 3.0% to all-time highs on better-than-expected quarterly sales and a strong order intake for 2021.

Meanwhile, Richemont rose 2.8%, after posting a 5% increase in quarterly sales as Chinese splashed out on Cartier, its flagship jewellery brand.

Britain’s Burberry jumped 3.9% after it stuck to its full-year goals, saying higher full-price sales would boost annual margins, while Asian demand remained strong.

The pair boosted European luxury goods makers that are heavily reliant on China, with LVMH and Kering gaining between 1% and 3%.

“Any sign that retail spending is picking up in China is going to be a boost to the Western markets and those heavily exposed to it,” said Connor Campbell, financial analyst at SpreadEx.

The European Central Bank is set to meet on Thursday. While no policy changes are expected, the bank could face more questions about an increasingly challenging outlook only a month after it unleashed fresh stimulus to bolster the euro zone economy.

“With the new round of easing measures fully in place and no new forecasts to be presented tomorrow, it should be a fairly uneventful day for the euro,” ING analysts said in a note.

Italy’s FTSE MIB gained 0.9% and lenders rose 1.6% after Prime Minister Giuseppe Conte won a confidence vote in the upper house Senate and averted a government collapse.

Conte narrowly secured the vote on Tuesday, allowing him to remain in office after a junior partner quit his coalition last week in the midst of the COVID-19 pandemic.

Daimler AG jumped 4.2% after its Mercedes-Benz brand unveiled a new electric compact SUV, the EQA, as part of plans to take on rival Tesla Inc.

Germany’s Hugo Boss added 4.4% after Mike Ashley-led Frasers said it boosted its stake in the company.

(Reporting by Sruthi Shankar and Amal S in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur and Kirsten Donovan)

Continue Reading

Trading

Miners lead FTSE 100 higher on earnings cheer

Published

on

Miners lead FTSE 100 higher on earnings cheer 3

By Shivani Kumaresan

(Reuters) – UK’s FTSE 100 rose on Wednesday as miners gained after a strong production forecast from BHP Group, while encouraging updates from luxury brand Burberry and education group Pearson drove optimism about the earnings season.

BHP Group Ltd climbed 2.8% after it forecast record iron ore production for fiscal 2021, helped by high prices for the commodity. Other miners Rio Tinto, Anglo American and Glencore rose more than 2%.

Global markets rallied in anticipation of more fiscal spending as Joe Biden prepared to take charge as the 46th U.S. president.

“There is a view in the markets that more spending is in the pipeline, after all, Mr Biden will want to start his presidency on a positive note,” said David Madden, market analyst at CMC Markets UK.

The FTSE 100 index rose 0.4% and the domestically focussed FTSE 250 index added 1.4%.

The FTSE 100 has recorded consistent monthly gains since November after the sealing of a Brexit trade deal and hopes of a vaccine-led economic recovery, but has recently lost steam as tighter business restrictions sparked fears of a slow rebound.

Burberry rose 3.9% as it stuck to its full-year goals and said higher full-price sales would boost annual margins and Asian demand remained strong.

Global education group Pearson jumped 8.6% after its global online sales grew 18% in 2020, helped by strong enrolments in virtual schools.

WH Smith Plc surged 10.4% to the top of the FTSE 250 index as its trading during Christmas was ahead of its expectations.

(Reporting by Shivani Kumaresan in Bengaluru; editing by Uttaresh.V, William Maclean)

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

Euro zone business activity shrank in January as lockdowns hit services 4 Euro zone business activity shrank in January as lockdowns hit services 5
Business2 hours ago

Euro zone business activity shrank in January as lockdowns hit services

By Jonathan Cable LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to...

Volkswagen's profit halves, but deliveries recovering 6 Volkswagen's profit halves, but deliveries recovering 7
Business3 hours ago

Volkswagen’s profit halves, but deliveries recovering

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car...

Muted recovery for UK retailers in December ends worst year on record 8 Muted recovery for UK retailers in December ends worst year on record 9
Business3 hours ago

Muted recovery for UK retailers in December ends worst year on record

By David Milliken and Andy Bruce LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus...

Global chip shortage hits China's bitcoin mining sector 10 Global chip shortage hits China's bitcoin mining sector 11
Business3 hours ago

Global chip shortage hits China’s bitcoin mining sector

By Samuel Shen and Alun John SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines...

Iran's oil exports rise 'significantly' despite sanctions, minister says 12 Iran's oil exports rise 'significantly' despite sanctions, minister says 13
Business3 hours ago

Iran’s oil exports rise ‘significantly’ despite sanctions, minister says

DUBAI/LONDON (Reuters) – Iran’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers...

Nissan to source more UK batteries as part of Brexit deal 'opportunity' 14 Nissan to source more UK batteries as part of Brexit deal 'opportunity' 15
Business3 hours ago

Nissan to source more UK batteries as part of Brexit deal ‘opportunity’

By Costas Pitas LONDON (Reuters) – Nissan will source more batteries from Britain to avoid tariffs on electric cars after...

Muted recovery for UK retailers in December ends worst year on record 16 Muted recovery for UK retailers in December ends worst year on record 17
Business3 hours ago

Muted recovery for UK retailers in December ends worst year on record

By David Milliken and Andy Bruce LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus...

Chinese phone maker Honor partners with key chip suppliers after Huawei split 18 Chinese phone maker Honor partners with key chip suppliers after Huawei split 19
Business4 hours ago

Chinese phone maker Honor partners with key chip suppliers after Huawei split

By David Kirton SHENZHEN, China (Reuters) – Chinese budget phone maker Honor said on Friday it had signed partnerships with...

Oil down $1 as China COVID-19 cases trigger clampdowns 20 Oil down $1 as China COVID-19 cases trigger clampdowns 21
Business4 hours ago

Oil down $1 as China COVID-19 cases trigger clampdowns

By Noah Browning LONDON (Reuters) – Oil prices fell on Friday, retreating further from 11-month highs hit last week, weighed...

Stocks ease as gloomy data takes shine off U.S. stimulus hopes 22 Stocks ease as gloomy data takes shine off U.S. stimulus hopes 23
Business5 hours ago

Stocks ease as gloomy data takes shine off U.S. stimulus hopes

By Tom Arnold and Swati Pandey LONDON/SYDNEY (Reuters) – Global shares slipped off record highs on Friday as gloomy data...

Newsletters with Secrets & Analysis. Subscribe Now