Dealing with tax

Methodology Lesson 12 Dealing with Tax They say that there are two guarantees in life, the first being death and the second being the obligation to pay taxes. As you may have already thought, paying tax is a key responsibility when it comes to investing. Even if you invest with small amounts of money, over […]

Investor Protections

Methodology Lesson 11 Investor Protections The biggest concern for most retail investors is knowing when the next financial crisis will come as they worry that their investments may go down in value significantly. Questions are always raised about the 7 year cycle and how ‘we must be close to another financial crisis’. The truth is […]

Measuring Performance

Methodology Lesson 10 Measuring Performance After making investments, it’s important to examine the quality of their performance. That applies to both trading and investing. With trading, a trader needs to examine the cumulative returns of his trades across a set period of time. That way, the trader can know the overall impact of any loses […]

Understanding Valuation

Methodology Lesson 9 Understanding Valuation One of the most famous Warren Buffett quotes goes as follows, ‘Someone is sitting in the shade today because someone planted a tree a long time ago’. This quote acts as a metaphor for valuation. It highlights how valuation includes the present value of a company as well as the […]

Corporate Finance

Methodology Lesson 8 Corporate Finance As an investor, you are relying on the management of a company to increase the value of your investment. According to agency theory, the management of a firm are employed on behalf of the shareholders as an agent, to run a company on their behalf. The agent is empowered by […]

Qualitative analysis

Methodology Lesson 7 Qualitative analysis Most of the focus in finance and investing is on numbers. When making investment decisions, ratios, equations and statistics tend to be the most utilised. This bias towards quantitative analysis doesn’t always provide the full picture of a business and often qualitative metrics are required. There are tremendous number of […]

Fundamental analysis

Methodology Lesson 6 Fundamental analysis In contrast to technical analysis, fundamental analysis is not concerned with stock chart data. Instead, fundamental analysis is about assessing the underlying business, it’s balance sheet, financial health as well as other external economic factors. For investors that mostly utilize fundamental analysis, the intention is to identify stocks that represent […]

Technical analysis

Methodology Lesson 5 Technical analysis There are 2 key ways to analyse stocks. The first is called technical analysis, while the second is called fundamental analysis. In this lesson though we will discuss technical analysis, which is primarily about trying to identify particular patterns in stock chart data. Technical analysis is mostly used by traders […]

Investing Strategies

Methodology Lesson 4 Investing Strategies In the world of investing, there is a key distinction between the strategies of trading and investing. Trading usually refers to short term investing strategies whereby investors are trying to profit from short term mispricing’s of stocks. Investing, on the other hand, refers to more long term strategies where investors […]

Measures of Risk

Methodology Lesson 3 Measures of Risk Being able to assess riskier stocks from less risky stocks is crucial when building a portfolio. It’s important for an investor to include stocks in a portfolio that meet their risk profile. If someone is very open to risk, they may want to include a lot of risky stocks […]