“Never invest in a business you cannot understand.” Warren Buffet

“Behind every stock is a company. Find out what it’s doing.” Peter Lynch

There are two key decisions in investment decision-making: the buy decision and the sell decision. By being aware of the common pitfalls of buy decisions, we can potentially save ourselves from a painful sell decision.

Social Proof

Social proof is an extremely powerful force. It’s often noticeable at intersections when a group of pedestrians are waiting to cross. Often, if one breaks rank, others quickly follow. ... (read more)

Guest post from from Lars Kroijer

With Donald Trump making headlines on an hourly basis and our social media accounts going crazy with comments on his presidency of it being an effective coup and a one-way route to the apocalypse, we are left asking ourselves: Should we perhaps change our investment strategy as a result?

In short the answer is yes, but perhaps not how you think.

In earlier blogs, I have outlined how I consider it highly unlikely for the vast majority of investors that they can beat the markets themselves through active stock selection, market timing, or via picking the one out of ten actively investment funds that may do so over a ten-year period. And that for your equity exposure you should pick as broad and cheap an index tracking exposure as you can get your hands on, namely a world equity index tracker. “Just” because Trump is now president of the United States, that is no less true. You most likely couldn’t beat the markets before November and still can’t. ... (read more)

Being young and in love is pretty much the closest we’ll ever come to feeling bulletproof. There’s an undeniable confidence that rises to the surface when you’ve got age on your side and a heart bursting with emotion. Colours seem brighter, food tastes better and risk is relegated to the back of your mind as you carry on with reckless abandon. Live in the moment, right? Wrong. Eventually the pitfalls will catch up with you and suddenly you’re partnered up but penniless. Rather than forget about your finances completely, a little bit of future proofing can be the perfect foundation for your happily ever after. Read on to find out the most common mistakes young people make – and you can avoid them. ... (read more)

Debt is an essential driver for growth in many businesses, and maintaining a sustainable level of debt as you grow can be a healthy way to finance your expanding business. However, having an unsustainable level of debt is all too common especially among small businesses. Every business should have a debt strategy that outlines how much debt is sustainable and how to manage or reduce debt.

Identify causes of debt ... (read more)

Check out this investing video series on www.kroijer.com by Lars Kroijer, who used to run a hedge fund in London. Basically it says you can’t beat the market, and explain why that is important.

For investors from Australia the message is – “don’t invest in Australia. You already have plenty of domestic exposure”. As an example, if you buy Australian stocks for your investment portfolio, you are adding concentration risk as you are already exposed to the economy via your job, house, insurance, etc. Instead you should try to decrease the correlation and concentration risk in a portfolio by investing globally. That way you lower the risk of losing money on your domestic investments at the same time and for the same reason (decline in local economy) that you lose your job, job prospects, your house is worth less, potentially your education worth less, etc. ... (read more)

The Bank of Japan has caught the attention for all stock markets. Their decision on monetary policy will have a lot of influence on global markets and economy as a whole. The Bank of Japan recently moved assets by the millions, causing changes in sovereign debt and trading funds. Seeing as this did not realise their goal of annihilating deflation, this bank went ahead to target the yield curve.

While working to maintain 10-year bond yields at zero, the bank also hopes to keep flattening rates at a minimum. This is a big decision that will most likely affect the bank’s profits, but what exactly does this mean for financial markets, and more specifically, for CFD traders? In case the plan drafted by the bank fails, is there a way that these traders can rise above the losses and find their ground again? ... (read more)

With the end of financial year upon us, so much attention surrounds how to get the most out of your tax, but there is real merit in planning all year round and saving important dollars too. It’s not just about saving at tax time!

Rate Detective CEO, Damon Rasheed (former economist for the ACCC) has some great tips on how to start the new financial year smarter, healthier and with peace of mind. Remove the stress of 30 June by using Damon’s advice to ensure your finances are in shape. ... (read more)