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Showing posts from August, 2015

Who is the Fed?

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Key Words from this lesson: FED (Federal Reserve), Market Condition & Interest Rate , Currency , Asset Valuation . What does the Fed do? - Maximize employment and stabilize prices. - Supervise and regulate banks. - Maintain stability of the Financial System. - Service debt for the US Government. Interesting Facts: - Before 1913, the US had over 30,000 currencies in circulation. - The FED is actually an independent institution, with government regulation and supervision. Market Conditions and Interest Rate: - In a bull market (leading to a greed cycle) the Fed can raise interest rate to try and calm the market. - In a bear market (a fear cycle) the Fed can cut interest rate to try  and stimulate the market. Market Condition and Investments: Typically investors can compare the relative yields of investing in bonds/stocks, to decide which offers more attractive returns. - When interest rate is high, it is advantageous to buy bonds. Bond Coupons w

Bond continued..

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Key Words from this lesson: Interest , Compound Interest , Coupon Yield , Current Yield , Yield to Maturity .

What is a Bond?

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Key Words in this lesson: Corporate Bond , Par Value , Term , Coupon Rate , Underwriter's Fee , Government/ Treasury Bond , Local Government Bond , Inflation , Interest Rate . In the event of a bankruptcy, the order of equity distribution is: 1. Bond holders. 2. Preferred share holders. 3. Common share holders. Key Words in this lesson: Par Value , Coupon Rate , Term , Market Price , Basis Points . Long term bonds with good coupon rates become attractive when: - The stock market is overpriced and the yield is only similar or worse than bonds. - The interest rate is unsustainable high. When the interest rate is high, the market prices of bonds are low. When the interest rate falls, the bond prices rise with higher demand. (Note: There are some exceptions. For example, in recent years Governments have been purchasing bonds through Quantitative Easing programmes (i.e. printing money). This artificially suppresses bond yields whilst interest rates have al

Organise your life with OneNote

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I don't think I have mentioned Microsoft OneNote before.  Had to use it recently to coordinate a volunteering project and found it to be rather useful. You can add notes, timetables, emails, documents, excel, pictures, drawings... pretty much anything into one place and that can be accessed and contributed by others that are working with you.  It is also available across different devices so that it's always there on the go which I really appreciate. OneNote is one of those software that came with the Office but one that I never had any reasons to click on. It has always been there in the background. I wish I have discovered how useful it is sooner. Have a go and see if you agree.

Market Bubbles and Crash

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Key Words from this lesson: Market Cycles , Market Psychology , Greed & Fear human instincts. Worth noting ideas: - Invest based on knowledge rather than emotions. - Accumulate shares (based on Value and Price ) rather than trading regularly. - Be greedy when others are fearful and be fearful when others are greedy. - In longer term , value of a good business becomes absolute.

Stable, Understandable, Predictable

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A stock must be stable and understandable if you were to have any chance of predicting its future earnings. And if you don't know how much money the business will generate, then you can't really make an investment decision. Key Words fro this lesson: Stable , Understandable , Predictable , Historical Data , Earnings Per Share (EPS) , Debt to Equity ratio .