One of the major challenges facing investors is how to generate an income return which beats inflation. This has been a problem since interest rates declined to historic lows following the financial crisis, but is now even tougher because of the rise in inflation. While interest rates could realistically edge upwards in future years, higher-yielding…
Gold may not have a practical value as an alternative currency. It’s not possible to enter a shop and pay for any product or service in gold. However, the precious metal may have value as an alternative to cash or other assets due to its scope to help protect against rising inflation. Inflation potential In…
Since the EU referendum on 23 June 2016, the pound has weakened significantly versus a basket of major currencies. For example, it is down 15% versus the dollar, and by 14% versus the euro. Much of this is due to the increased political risk facing the UK from Brexit, with many investors now more cautious…
The election result has plunged the UK into a period of significant political uncertainty. There have been calls for Theresa May to resign, and there is the potential for a relatively weak minority government formed by the Conservatives and DUP. This could be just the beginning of an intense period for UK politics. In just…
The general election result was supposed to be a foregone conclusion. The Conservative party was meant to increase the size of its majority, with opinion polls showing a lead of as much as 18 points over the Labour party in the last month. However, a surge in support for Jeremy Corbyn has meant that the…
A higher rate of inflation could be a game changer for UK income investors. In recent years, it has been at relatively low levels, and this has made it fairly straightforward to generate a positive real dividend yield (i.e. after inflation has been deducted). Now, though, inflation is at 2.7% and is forecast to move…
It’s been a long road but, finally, the FTSE 100 has reached 7,500 points. This may prompt worry among some investors, since it could mean the index is overvalued and there is a lack of investment opportunities on offer. Risks such as Brexit, the general election, Trump’s Presidency and numerous others could weigh on the…
Investor expectations can be a gift or a curse. Sometimes they allow investors to buy shares at discounted prices because the market expects a difficult period. Other times, however, they can lead to a disappointing share price performance even if a company records high earnings growth. In such a scenario, if profit growth falls below…
When it comes to investing, it seems as though timing is everything. Even the best stocks can have their bad days. And the ‘dogs’ of the index can enjoy periods of stunning share price growth. Therefore, finding the right stocks at the right time seems to be the difference between success and failure in investing.…
Special dividends have long been overshadowed by share buybacks. The latter has proven popular with company management due in part to its positive effect on EPS, which is often linked to bonuses, and the flexibility it brings. This contrasts with ordinary dividends, which the market expects to be repeated in future years once they have…
