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Financial Trading

What is value investing?

Answered by Sophia Miller | 8 months ago 3 Answers

The premise of value investing is that the market isn’t always efficient in pricing a company’s intrinsic value. A value investor seeks to exploit these inefficiencies to profit from them. This is usually by being contrarian and going against the herd (all typical value investing terms). It’s the strategy most associated with the common investing phrase ‘buy low, sell high’. The value investor seeks out value stocks that are trading below their book value.

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redicis follows

3 months ago

The phrase "buy low, sell high" encapsulates the core idea of value investing, where investors aim to purchase stocks at a price lower than their intrinsic value, expecting that the market wi

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What are the benefits of investing in bonds?

Answered by Shane lee | 8 months ago 1 Answer

Less volatility: Bond prices tend to fluctuate much less than share prices, making them potentially safer investments.

Income: The coupon payments on bonds can provide a predictable and stable revenue stream

Diversification Perhaps the most significant benefit of investing in bonds is the diversification they can bring to your portfolio. Although shares have outperformed bonds over the long term, holding a portion of your portfolio in bonds can help reduce financial risk.

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What types of bonds are there?

Answered by Ruby King | 8 months ago 2 Answers

In Australia, there are two types of bonds:

Corporate bonds: These are bonds issued by companies. They tend to offer higher interest rates, but there is more default risk with small, growing companies than with large, blue-chip companies and government entities

Australian Government bonds: These are bonds issued by the federal government. Due to the lack of default risk, they are considered safer investments than corporate bonds and offer lower interest rates.

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What are bonds?

Answered by Rosemary Kelly | 8 months ago 1 Answer

When companies and governments want to finance new projects, they often need to borrow money. They can do this by issuing bonds for money markets and investors to buy, effectively providing the capital for the loan.

Put simply, bonds are a way for organisations to borrow money by breaking a loan down into smaller parts or ‘bonds’ and making them widely accessible to lenders of all sizes.

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What are some key features of exchange-traded funds?

Answered by Nicholas Hamilton | 8 months ago 1 Answer
  • An ETF is a collection of securities that can include shares, bonds, commodities, and currencies
  • ETFs might include Australian or international assets
  • You can buy and sell units in an ETF the same way you purchase shares through a stockbroker or via an online share trading platform.
  • You usually purchase units in an ETF, not its underlying investments
  • The unit price of an ETF fluctuates during the day as it’s bought and sold on an exchange
  • ETFs often have low management expense ratios (MERs) or fees

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What are the different types of ETFs?

Answered by Mia Hall | 8 months ago 1 Answer

Depending on your objectives, values, and attitude to risk, you can invest in many different types of ETFs. These include:

  • Industry ETFs focus on a specific industry, like financial services, resources, or healthcare.
  • Commodity ETFs invest in commodities, such as gold or iron ore.
  • Fixed-income ETFs concentrate on investments that offer a fixed return, like government or corporate bonds.
  • Currency ETFs invest in the US dollar, Euro, or other international currencies.
  • International ETFs invest in overseas shares, bonds, and commodities.
  • Ethical ETFs invest in businesses that align with defined values, like sustainability.

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