How will global disruption affect small cap stocks? September 9, 2019 | City Talk Small capitalisation stocks, or small caps, can offer the potential for higher returns compared with investing in larger companies, although they are not without risks. As with all equities, investors may not get back the amount they originally invested. As well as the potential for higher returns, investors are also being drawn to the sector [...]
Ten things every investor needs to know about offshore wind power September 5, 2019 | City Talk The solar and onshore wind industries have long been areas of focus for climate change investors, but offshore wind has always lagged behind because of its higher cost. However, that is set to change, with substantial growth likely in the sector over the coming years, as offshore wind approaches cost competitiveness with conventional electricity generation. [...]
Five sustainable investing myths September 2, 2019 | City Talk Given the dramatic rise in popularity of sustainable investing, it’s perhaps no surprise that a few misconceptions have come along for the ride. Sustainable investing – sometimes known as “ESG” investing because it considers environmental, social and governance risks and opportunities – has become increasingly important. Last year our employer Schroders found two-thirds of investors [...]
Investing ‘IQ test’ reveals the traits that could limit returns August 29, 2019 | City Talk Investors globally suffer from an ambiguity bias which can prevent them from taking risks with their investments and potentially lower their returns, Schroders investIQ test found. All investors have behavioural biases such as ambiguity aversion or impulsivity which can affect the way they invest. By understanding these biases, investors may be able to improve their [...]
The chart that reveals the secret of value investing August 27, 2019 | City Talk Value investing is the art of buying stocks which are valued at less than their true worth and are awaiting a correction. History suggests that over the longer term value investing works, although past performance is no guarantee of future returns. But why does it work? Using data going back to the late 1800s, the [...]
Behavioural finance: what the polka dot maxi dress sensation has to do with investing August 23, 2019 | City Talk THE polka dot Zara dress sensation comes to mind when considering recent examples of “herd bias”. The hugely popular dress, which has its own Instagram page dedicated to sightings of it, was initially a sell-out, and it seems herd mentality has been at play. However, this bandwagon effect, where people gravitate towards something because “everybody [...]
Economy on red alert with yield curve close to inversion August 16, 2019 | City Talk Both the US and UK yield curves are on the verge of inverting. The yield curve has been a reliable predictor of US recessions over the last four decades, less so in the UK. With only one exception, each time the yield curve has inverted, the US economy has entered a downturn within 18 months. [...]
Value investing will survive Fortnite – and other tech disruptors August 12, 2019 Kyle ‘Bugha’ Giersdorf is 16, lives with his family in Pottsgrove, Pennsylvania and last weekend, by virtue of his extraordinary proficiency at a computer game, he became a millionaire. At the end of the first-ever Fortnite World Cup, which took place at New York’s Arthur Ashe Stadium, Kyle emerged victorious from a field of 100 [...]
Lessons in investing from England’s Cricket World Cup victory August 7, 2019 | City Talk It may not have felt like it at times during the final but England started the Cricket World Cup as clear favourites to win the tournament. Forget the weight of money that tends to distort domestic teams’ odds ahead of a major sporting event. Independent data had England ranked as the top one-day cricket side [...]
Why has the weaker pound failed to turbocharge the economy? August 5, 2019 | City Talk The sharp fall in the pound in the wake of the 2016 Brexit referendum would help “rebalance the UK economy”, in the words of Mervyn King, former governor of the Bank of England. But since then, the UK has struggled to improve its trade position and has certainly not seen any boost to GDP growth. [...]