On 13 June 2022, the S&P 500 officially entered a bear market, closing more than 20% down from its record high set in January. It’s often said that no two bear markets are alike, and that certainly reads true if we contrast the economic conditions underlying today’s bear market with those of the previous bear market in 2020.
Throughout 2020 and 2021, the world witnessed numerous lockdowns, business closures, event cancellations and work from home policies, triggering a deep economic downturn. While many were hopeful for 2022, the economic shock has continued as high inflation, rate rises, and growth fears have triggered a market sell-off.
The old saying “there’s no such thing as a free lunch” offers a lesson in life and economics. Even if something appears free, the inescapable realities that goods are scarce, and you must make a choice, mean that there’s always a cost – opportunity cost. This concept was first popularised by Nobel Laureate Milton Friedman,
Gold traditionally has been used as a hedge against inflation. During periods of high inflation, central banks typically increase interest rates. High inflation can make it difficult to value companies as the dollar becomes less valuable, affecting operating costs and profits. This can make markets volatile.
This is where gold and other hedging assets come into play.
All too often I see individuals getting caught up in complex investment strategies, most of which require a mathematician to decipher. But in the long run, they generally end up with market-like returns. Like Bruce Lee said “simplicity is the key to brilliance” – and there couldn’t be a truer phrase related to the world of investing.
If you’ve visited the supermarket or the petrol station recently, you’ve no doubt been unpleasantly surprised by the massive rise in prices. Between the ongoing war in Ukraine, supply chain problems and a recovering global economy, it seems economies have been hit by the perfect storm for inflation. So how can investors benefit from these price rises?
The demand for solar powered energy solutions is set to grow strongly in coming decades, reflecting both the urgent need to deal with climate change and solar’s rapidly improving cost competitiveness.
Investors can now consider the BetaShares Solar ETF (ASX Code: TANN), which provides exposure to a portfolio of leading companies that are making solar energy more accessible,
When investors see red across their portfolios, the emotions this can trigger often lead to poor decisions. So, here’s a short guide to navigating stormy markets.
Part 1: Before the crash
The biggest gains from market dislocations are born before the crash even begins. But that doesn’t mean trying to predict recessions and sell in advance.
Nuclear energy is increasingly being accepted as a safe, reliable, low-carbon energy source and seen as a critical supplementary means of meeting the world’s growing energy demands. As a result, demand for uranium to fuel the nuclear power stations of tomorrow appears on course to grow strongly in the years ahead.
Investors should always ‘look under the hood’ of an Exchange Traded Fund (ETF) before considering investment. Determining what assets a particular fund may hold can be as simple as looking at its name, or even its ticker! But what is typically less obvious is the method used to determine how much weight is given to each holding within a fund.