Don’t Write Off the Market Just Yet
Some people have a different view on sharemarket slumps. They see the low stock prices as an opportunity to buy a good deal.
During times of economic volatility, it is our natural instinct to guard our wealth and distance ourselves from risk. While this reaction is unsurprising, it can also mean missing out on growth opportunities created during crazy times.
Warren Buffet, one of the world’s most successful professional investors, sees market downturns from another perspective, saying “Look at market fluctuations as your friend rather than your foe; profit from folly rather than participate in it.”
Generally when we see a lower price for something we want we rush in for a bargain, however it can be quite the opposite with stocks. Why is it that we treat stocks that have dropped in price with fear? Stock prices of a company can drop for a multitude of reasons.
Lately we have seen the share values of a number of reputable companies with healthy balance sheets be negatively affected due to a rush to sell as a result of the economic crisis.
Despite the uncertain trading environment, fund managers are always reviewing the market for investment opportunities. Many superannuation managers are searching to find stocks in profitable companies with strong balance sheets and dividends. For example Australian companies such as household names like David Jones have delivered strong profits after tax and dividends in 2008. However during 2008, David Jones’ share price fell by more than 30%.
Identifying opportunities
Not all businesses will be affected by the world economic crisis similarly. Some sectors are more susceptible to the business cycle than others.
Companies who deal in of basic goods and services continue on almost unabated, for example we all need to eat - so supermarkets aren’t as affected as much as manufacturing, motor vehicle sales or luxury goods.
Australia’s population growth is at a 19 year high and growing at 1.7% per annum. Australia’s growing population provides increasing demand for goods and services as people need food, housing, cars, and other staples. Unlike many overseas countries, Australia benefits from two key factors: a high population growth rate and a high demand for accommodation.
Population growth is nearly twice that of the US while Germany has negative population growth. In the US there is an over-supply of housing while Australia suffers from a lack of supply. The combination of limited accommodation and a rising population will create growing demand for housing which will support further building and provide opportunities for the building industry.
The value of companies
Many people view companies with falling share prices with fear, but we need to take a look under the bonnet of these firms to find out why. Have they borrowed heavily?
What industry are they in? Are they competitive against their peers? Only by answering these questions, can we know if their share value has fallen for valid reasons or if the company is indeed on sale.
When investing, many fund managers seek firms with high and maintainable dividends, strong balance sheets and substantial cash flow. These companies are more likely to outlive the volatility storm and may give you a greater return when the market moves into the next phase of recovery and
beyond.
Before you consider changing your strategy, you should see a professional. Having a financial adviser and a long-term financial plan can give you confidence to manage the effects of market cycles. With the right advice you can ensure your investments are tailored to your risk profile and time horizon, giving you the certainty of knowing you’re doing what’s right for you. This article brought to you by a Brisbane business consultant who offers sales training courses and a web site design brisbane. Distribution by seo packages. BS1004
Nine words women use
1.) Fine: This is the word women use to end an argument when they are right and you need to shut up.
2.) Five Minutes: If she is getting dressed, this means a half an hour. Five minutes is only five minutes if you have just been given five more minutes to do what you’re doing before helping around the house.
3.) Nothing: This is the calm before the storm. This means something, and you should be on your toes. Arguments that begin with nothing usually end in “fine”.
4.) Go ahead: This is a dare, not permission. Don’t Do It! The best way to defuse this situtation is to say: “On second thought’s you’re right. I don’t know what I was thinking.”
5.) Loud sigh: This is actually a word, but it is often misunderstood by men. A loud sigh means she thinks you are an idiot and wonders why she is wasting her time standing here and arguing with you about nothing. (Refer back to #3 for the meaning of “nothing”.)
6.) That’s Okay: This is one of the most dangerous statements a women can make to a man. That’s okay means she wants to think long and hard before deciding how and when you will pay for your mistake.
7.) Thanks: A woman is thanking you, do not question, or faint. Just say “you’re welcome”.
8.) Whatever: Is a women’s way of saying “you’re dead”.
9.) Don’t worry about it, I’ve got it: Another dangerous statement, meaning this is something that a woman has told a man to do several times, but is now doing it herself. This will later result in a man asking `What’s wrong?’ For the women’s response refer to #3.
Engin review - VOIP service
My wife makes an average of 60 calls per month to Sydney from Brisbane at an average costs of $2.70 each. That’s $162 per month. She also has clients overseas in places like PNG and the middle east.
I’ve been thinking about signing up for one of those voice over the Internet services for years and finally last week I signed up with Engin. The signup process was easy and within 3 days I had my Engin voice box and a nifty little wireless phone. The plan I’ve signed up to is $10 per month and the phone cost $30 if I committed to 12 months.
So far I have been very impressed with the quality of service. We have Optus Cable Internet and a small wireless LAN at home. All I had to do to get it working was plug in the Engin box to the router, activate the service by e-mail and then power up the telephone.
The voice quality is very acceptable, about 90% as good as standard PSTN. The other impressive features are incoming call control, call blocking, time of day diversion and so on. A 4 hour call to Sydney costs us 10 cents. Overseas calls are about 3.5 cents per minute.
I have no idea how much bandwidth a call consumes, which can be important if you have a cap on your downloads and uploads. I suspect bandwidth consumption is around about 20 kilobits per second which equates to 150k per minute or 9 Mb per hour. It could be a lot less than that because I assume the gaps between words consume very little bandwidth.
I was a bit worried about what happens to the voice quality when shaping from the ISP kicks in. Once I hit my download limit on the cable Internet, Optus throttles me back to about 56Kbps. I noticed no change in the voice quality once my connection was throttled back to 56Kbps.