Nigel Green, the chief executive of deVere Group, which has $12bn under advisement, is speaking out after Beijing announced on Friday it will impose new tariffs on $75 billion worth of US goods and resume duties on American autos.

The Chinese State Council said it will slap tariffs ranging from 5 to 10% in two batches. The first on 1 September and the second on 15 December.

Mr Green notes: “China and the US are playing a dangerous game of brinkmanship which will inevitably dent global growth at a time when the global economy is headed for a serious downturn.

“Both sides are getting hurt by the ongoing tit-for-tat trade war and given that they’re the world’s two largest economies its negative impact is far-reaching and intensifying. There’s some serious collateral damage.

“It is likely that there will be further retaliations in the form of tariffs, punitive sanctions on each other’s nation’s firms and, possibly, currency devaluations.”

He continues: “The already volatile markets have been rattled again by today’s news.  Investors are getting spooked.

“However, the trade war will likely prove a blip for long-term investors.  

“Indeed, investors should embrace some volatility as important buying opportunities.

“Fluctuations can cause panic-selling and mis-pricing. Sought-after stocks can then become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all typically results in better returns.

“A good fund manager will help investors seek out the opportunities that turbulence creates and mitigate potential risks as and when they are presented.

The deVere CEO concludes: “Many savvy investors will be using the fall-out of the US-China trade war to generate and build their wealth.”

One needs to understand the industry before jumping into its business. Many things that look easy on the outside will surprise you when you get to their implementation. You should have a few resources beforehand if you are to start a property development business.

Make Sure You Know the Industry

People say you need money to start a business. Most successful entrepreneurs disagree. They say you need to have skills like no other to start a business, and the investment will come to you. Make sure you are worthy of running a successful business before you worry about finances. Learn everything there is to know about the industry you plan to target. For that, you may have to do a job, work as an assistant, or join a study course. When it comes to property development, you need to understand every corner of it. Start the business only after you are certain that you have explored the entire industry.

Arrange Investment

Once you are confident that you can run the property development business, it’s time to prove it. Your skills will be tested and there will be money on the line. You either have to invest your own finances or get a loan. It’s best if you have your own investment because that way you don’t have to answer to anyone. On the other hand, it won’t be a problem even if you don’t have the finances. As I said, the

investment will come to you if you are skilled. Anyone would agree to invest with you when they know you are not going down. You can get development finance from Property Finance Partners for your business. It is a property finance company that provides real estate raising finance solutions in the UK.

Keep Contact with Suppliers

A professional network is your net worth. You need to have contact with every supplier related to your work. You should also understand every service and product that you will use and their current value in the market. As a property developer, you may need services of builders, electricians, painters, architect, carpenter, plumbers, decorators, and interior designers. Having a reliable relation with these professionals will give you confidence and allow you to meet deadlines with quality work.

Understand Your Target Market

You should have a full understanding of your target audience before investing in a business. You should know who will need your services, how they will approach you, and if there is any space for you in the market. It can be difficult to survive in a market with fierce competition. Likewise, you should also know the right time to penetrate the market and when to take a break. Having an audience persona in your mind will help you better target your potential customers.

Use Digital Marketing

Marketing is important to make an entrance in the industry. While many property developers may underestimate it, digital marketing has helped many new entrepreneurs build their business. Use every marketing tool to get an edge over your competitors. Once you understand your market, targeting potential customer becomes easier.

Digital marketing doesn’t need you to have an office, you only need a website and a few social media profiles. You will reach out to potential customers through these channels. It’s also a great way to enter the market because it lets everyone know that you exist and now offering your services. Portray your skills and unique selling point on the internet. See what your audience is expecting from your industry and provide them an easy solution for that.

Build a Reliable Team

Every businessperson needs a team that he can rely on. The team builds the foundation of a business. If your foundation is strong, you are likely to survive in the market. Property development business doesn’t necessarily need a team if the leader is skilled enough. You will need the expertise of an accounting professional with the knowledge of all legal matters to understand and control all expenses. A project manager can divide your responsibilities and ensure that all development on site is in order. Moreover, you may need someone who understands the field to be on the lookout for opportunities.

Deciding Your Property Sector

A property business developer should know every sector of his industry. He should further understand the requirements of each sector where he wishes to operate. Whichever sector you choose, you will need to follow its every news and update. By specializing in just one sector, you are more likely to dominate it. You will know what, when, and where to buy, sell or rent a property. You will be able to make more sales by telling customers exactly what they want to hear if you focus on just one type of audience.

Brexit and its surrounding political upheaval is of course much to blame. Here Ana Bencic, Founder & CEO of Nexthash, delves into the potential benefits cryptocurrencies could offer in situations like this.

Figures taken on Tuesday 6 August show the pound trading for $1.2176 and €1.1199 respectively. The Brexit-related insecurity has been attributed listed as one of the factors behind the decline in the value of the pound, made worse by weak retail sales in June.

With the decline in the national currency and with Brexit on the horizon, questions are swirling around, about how the UK can maintain its attractiveness to foreign and domestic investors.

Investors who have been taking notice of the unpredictable nature of fiat currency’s’ value in relation to political events, as well as the near-constant rise in the value of several cryptocurrencies, will be looking at what makes cryptocurrency a viable alternative to traditional currency.

With more uncertainty than ever in the market, including the inability to hold above 1.27, the pound, it is clear that the value of pound sterling is predicated on political factors. In stark contrast, cryptocurrencies like Bitcoin and Ethereum appear to be unaffected by political upheaval. The value of Bitcoin has reached peaks of over $9000 and despite price drops, it appears to be gradually increasing in value over time. Investors who are wary of traditional currencies will be attracted to the fact that cryptocurrencies are not created by, or under the direct control of any financial institutions or third-party entities. Blockchain-based cryptocurrencies are decentralized and they use peer-to-peer technology to enable all functions such as currency issuance, transaction processing and verification to be carried out collectively by the network. While this decentralization renders cryptocurrencies free from manipulation or interference by a government or central bank, the flipside is that there is no central authority to ensure that things run smoothly or to back the value of a particular currency.

Additionally, Bitcoin effectively increases efficiencies, adds security to transactions and eliminates traditional methods of fraud. Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all that crypto needs is a verified exchange traded fund (ETF). An ETF would make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in crypto, which some say may not automatically be generated with a fund.

Cryptocurrencies are yet to reach their full potential, but this will come with time as traditional investors & traders start to use it more often and several major first-world nations pass legislation in support of cryptocurrency trade and investment. At this point, the crypto market is estimated to be worth $700 billion and the perception is that digital currencies are here for good.

Cryptocurrencies are yet to reach their full potential, but this will come with time as traditional investors & traders start to use it more often and several major first-world nations pass legislation in support of cryptocurrency trade and investment.

Countries with underdeveloped infrastructure and nations experiencing devaluation of their national currency can seize the advantages of cryptocurrencies- for the simple reason they can move money across their country’s borders with far greater ease than traditional currency.

Traders make use of cryptocurrencies as a peer-to-peer payment method, allowing them to send money in much less time than a bank transfer would take and with relatively low transfer fees when transferring funds internationally.

Blockchain based currencies will continue growing in popularity with traders and investors for their unique advantages of confidentiality, immutability, fast transaction times and a lack of external mediators.

Although political events,  such as Brexit can disrupt areas like the fuel economy, the sector as a whole is strong. Why? Simple: because we always need energy.

However, in terms of a general investment strategy, there are times when non-essential commodities can be profitable. For example, since 2009, cryptocurrencies such as Bitcoin have become popular. Although experts will argue from an ideological standpoint that we need cryptos and blockchains, the reality is that they aren’t necessary (i.e. we already have currencies).

Non-essential markets may be essential investments

Of course, that could change as developers find new ways to use blockchain technology to prevent fraud and the like. However, right now, crypto technology remains a niche market. But, even though that’s the case, you can still make a lot of money from investing in Bitcoin, Ethereum and other tokens. The same can be said of other innovative yet non-essential industries. A prime example is gaming. Although it doesn’t fall into the same class as energy or forex, it presents no less value in terms of opportunities if you understand the market.

When you look at gaming as a whole, it’s currently worth an estimated $137.9 billion. According to the Global Games Market Report, 2.3 billion gamers now enjoy a combination of online, console and mobile games. In fact, the latter is the largest entity within the gaming industry, generating $70.3 billion in revenue in 2018. However, when you delve further into the market, an abundance of similar but diverse revenue streams present themselves. For example, online casino operators such as GVC Holdings are now among the largest gaming companies in the world.

With casino sites attracting casual players through welcome bonuses, such as free spins, complete novices are now becoming familiar with Vegas-style gaming online. In fact, such is the variety of promotions out there, third-party sites have become an essential way of directing players to the best spots. By reviewing the latest free spin offers and, more importantly, explaining the terms and conditions, review sites have made casino gaming more attractive and accessible to novices. Put simply, these sites, as well as the operators, have turned online casino gaming into a $45 billion+ entity.

Investing in gaming isn’t a game

Alongside gaming operators such as Amaya, which completed a $4.4 billion takeover of PokerStars back in 2014, video game companies have been flexing their muscles in recent years. Perhaps one of the best-known developers is Electronic Arts (EA). Boasting a share price of $95+ in August 2019, this gaming company saw revenue top $5.15 billion in 2018 for a net income of $1.04 billion. Helping to bolster EA’s balance sheet is a list of acquisitions that stretches back to 1987. Starting with Batteries Included and moving into the present day with takeover of mobile developer Industrial Toys, EA has been one of the industry’s most active players.

However, it’s not just EA making moves. Everywhere you look in gaming, something big is happening. With virtual reality (VR) and augmented reality (AR) starting to evolve, the market looks set for another rush of activity. For any savvy investor, this has to be worth considering. Even though games are, in essence, ephemeral, it seems their appeal isn’t. While the likes of Activision or Ubisoft might not form the foundations of your portfolio, they certainly have their place. Indeed, if you’re considering entering the investment game, gaming could be an ideal market.

Studies show that a large portion of forex traders fail. The problem is that most do not prepare adequately before starting their live trading activity.

You can increase your chances of becoming a successful trader by identifying the mistakes that most traders do and avoiding them. The following are some of the common mistakes that beginner forex traders do and our tips on how to avoid them.

Mistake 1: Not enough forex education

You will never trade successfully unless you invest in education. Many beginners start trading with a gambling mindset. However, successful forex trading requires an understanding of the global markets, trading strategies and technical and fundamental analysis. You need to know how to use financial information resources like Bloomberg or the Financial Times, charts and other tools.

Once you are confident with your knowledge you should test it with the help of the demo account. Demo trading is the best time to test different strategies. You should not start live trading until you identify a trading strategy that you feel comfortable with in the demo environment.

Mistake 2: No risk management plan

Forex trading is a high-risk venture, and it is therefore critical to have a risk management plan that factors in the amount of risk you are willing to take. Once you identify your risk appetite, you should identify trading tools to protect yourself against additional risk.

For example, you can implement a stop-loss to close trades when the prices hit your risk threshold. Likewise, you can have a 'take-profit' feature in place to lock in trades when your target price is reached. These are not the only risk management practices you can adopt and before you start trading you need to be aware of all important practices and how to use them to your advantage.

Mistake 3: not sticking to your risk management plan

You can have a trading strategy and a risk management plan, but you will achieve nothing unless you follow them. Remember that forex trading requires high discipline. Traders often ignore their risk plan when chasing losses or when they feel overconfident about a specific trade. You should learn to identify the urge to ignore your risk management plan as an emotional reaction and keep reminding yourself that emotions are the number one cause of wrong decision making in trading.

Mistake 4:  Choosing the wrong broker

Most novice traders assume that all brokers are equal.  This is not true. There are many factors that can differentiate one broker from the other and choosing the right broker has a huge impact on your success or failure in the trading world.

But if we can think of one factor that is simply crucial to check before choosing a broker it is the license. You should only work with forex brokers like Capex.com who have a license from top regulatory bodies. If a broker is not regulated by one of these bodies then it cannot be trusted and you should not work with them.

Bottom line

It is always good to learn from other people's mistakes and this is what we have tried to help you do in this article. We do hope that you learned the pits and falls of forex trading and that you will have the patience and discipline to avoid them.

Trading forex, especially with CFDs may involve a high risk and your potential losses when trading CFDs may be substantial.

Bunk looked at the cost of a rental deposit and the cost of renting for a decade. Bunk then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58%.

Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58% would mean a total repayment of £231,798, a total of £254,478 including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680.

This means, that renting is £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.

This saving is most notable in Cambridge with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.

In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.

The lowest saving is in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city.

Co-founder of Bunk, Tom Woolard, commented: “Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.

However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to homeownership, even with almost record low-interest rates. 

Not only this but those that feel resigned to renting due to the high financial barrier of buying actually have a much better opportunity to save compared to those paying a mortgage. Whether they choose to use this for a deposit further down the road or simply to enjoy a better quality of life is up to them.”

They deem it to be a “high risk” product and have recommended limiting P2P lending to 'sophisticated investors’ only. Below, Finance Monthly hears from Frazer Fearnhead, CEO at The House Crowd, on why we shouldn’t’ be restricting P2P lending.

This is likely off the back of the recent collapse of mini bonds provider London Capital & Finance, which persuaded customers to invest in bonds (with a ‘fixed’ 8% interest rate) that weren’t ISA eligible. Sadly, some 14,000 people have lost most of the £214 million they had collectively invested. This has, understandably, increased regulatory scrutiny of similar products marketed to retail investors.

Nonetheless, the FCA is lumping all P2P lending companies in with London Capital & Finance, which is patently unfair. The company marketed a product as an ISA, but wasn’t one at all – it was a mini bonds investment – so we’re not even talking about comparable products here. Plus, it obviously wasn’t acting in a regulated fashion and, as a result, it’s a knee-jerk reaction to lump the whole P2P industry together with it.

Democratising investment options

Peer to peer lending, including products such as IFISAs, allow everyday people to access the sorts of returns that only high-net-worth and experienced investors historically had access to. Restricting this offering (or warning people away from it unnecessarily) would deal a big blow to the P2P lending industry and defeat its key objectives – for borrowers, to democratise access to finance and for investors, support the ability to lend in return for a better rate of interest.

Why should investments with higher interest rates be reserved only for experienced investors or those who already have significant capital? It’s precisely the savers who are working to build up a nest egg for their futures who should have such opportunities, especially since lending is much easier to understand than more complex investments. If they’re only left with options like cash ISAs (which won’t necessary beat rising inflation), they won’t be able to do it.

Why should investments with higher interest rates be reserved only for experienced investors or those who already have significant capital?

The FCA said that “anyone considering investing in an IFISA should carefully consider where their money is being invested before purchasing an IFISA.” Of course, this is still true – all investments should be carefully considered before they’re undertaken. But that doesn’t mean that we should completely rule out one of the most accessible investments available on the market today.

P2P is a diverse landscape

Another issue is that, at the moment, it seems the FCA can’t (or won’t) distinguish between different types of P2P loans with different levels of security. It’s true that many providers offer unsecured loans, but there are others that do offer more security. Lending can be secured against an asset which helps to mitigate the risk of the borrower defaulting, as a legal charge over the asset can force its sale and regain investor capital. Other lenders also operate a ‘provision fund’ as an additional security measure.

The FCA has previously warned of introducing ‘appropriateness tests’ in order to restrict who P2P lenders can market their products to, but the problem with this lies in conflating products that are in fact very different from each other. Not all P2P lending products are the same – levels of security do vary by provider, but if the right due diligence is conducted and processes are put in place to mitigate risk, they can offer consistency and reliability. Similarly, we should not look to compare, for example, a stocks and shares ISA with an IFISA. They are fundamentally different – and, arguably, the IFISA can be a safer option.

Ultimately, there are risks involved in all investments, but the answer isn’t in scaremongering. Appropriate education and transparency is what we need to get people investing their money wisely in a variety of options, and we would like to see the FCA do more to support this.

However, despite propaganda and horror stories surrounding the housing market in the UK, and the question of how Brexit will affect this, there are actually a lot of positives to buying in the UK at the present. It may well be the case, that now is in fact the perfect time to buy a house in the UK, and here’s why.

Population Levels

A recent census actually showed that the population has grown by a record of 7% in the last decade to just over 68 million people. That’s almost the equivalent of adding the entire city of Manchester to the UK every year. In the next twenty or so years, the number of UK houses needed is expected to reach the sum of at least 28 million, which is an increase of 250, 000 households per year. With rapidly growing numbers like this and the demand for houses growing, why wouldn’t you invest in a property? Not only this, but cities such as Birmingham, Manchester and Leeds are flourishing like never before. London no longer has the monopoly, as many places up North are regenerating. Birmingham alone has gone through a complete transformation, costing over £500 million in development.

Low Prices

Housing prices are at an all time low, meaning it can only go up from here, so why wouldn’t you buy them now in order to make money on them later? It’s a very rare combination: the

weak pound, low interest rates and falling property prices. Because of these elements, borrowing is cheaper than ever, and mortgage rates are at an all time low. This increases the amount of money landlords can charge for rent, thus making their monthly rental income higher than ever before. Therefore investing a buy to let property in the UK at present could make you a lot of money in the long run.

Other Positives

Of course there are further positives to investing in a UK property:

• Studies show that the UK is actually the top European city for property investment, despite political Imagine how much it will boom when Brexit is (finally!) concluded.
• For investors, thanks to the internet and a growth in the alternative methods of sale to the traditional, such as quick sale investors, for example here. This is a great option in case investors end up looking for a quick cash sale, or alternatively look to make a purchase of the
• If statistics are indeed correct, it’s set that at least 20% of the population will be looking to rent their home rather than buy them in the next five If this is the case, then now would be the perfect time to invest in a buy-to-let property. Imagine the money you could make in the future - not bad for the pension pot. Sometimes an investment now is worth the reward you’ll get in the future.
• In the world, out of the top universities, sixteen are actually in the
• In regards to the growth in population, mathematically there are actually too few houses for the amount of people in the country now, and by how much that’s set to grow. Because the demand outweighs the current supply, investors who have exposure to property as an asset are likely to be able to regenerate a return from
• The rise in employment levels in the country is also another reason for investors to buy. By the end of 2017, 75.3% of people in the UK were then employed, as opposed to the 5% the previous year. 2017 showed the joint highest number since records began in 1971. To make this more useful, in numbers it means that roughly 415,000 more people were employed since 2016.

In short, these are only a small amount of the reasons why it’s worth investing in the UK now, and why in fact it’s the perfect time to buy property in this country. Regardless of your purpose, whether you’re looking to become a landlord or wanting to buy your own home, looking at prices and statistics now is the ideal time. So what are you waiting for

Following, we are going to explain the trends that led to this massive change and what it means for young buyers.

1.  Ripple Effective

The successive cycles introduced in 1970s consist of economic houses where the property value increases first in London, this wave then goes south easy and other reasons. London always stayed at the front. However, the percentages were not always impressive.

Prices of houses in London have bee n doubled in North (Yorkshire, and Humberside).

2.  Income Growth

There have been some changes in regional prices. These are influenced by national factors like low interest rates and an increase in real incomes. The real incomes have had an impact on house prices. A 1% increase in real income will lead to a 2% increasing house prices. This is because households can afford to pay a bit more. This way, the house prices show a bit more volatility than the respective income.

3.  Supply, Demand and Other Patterns

Recently, there has been poor income growth in London. This shows that England is operating in a weak national housing environment. But it doesn’t show the regional price pattern. Internal migration patterns, supply shortages, higher demand in London also have their impact.

It's important we look closely at the southeast and see how outer London relative to inner London and South-East is as a whole. We need to focus on areas that aren’t very distant from each other. Recently, more people left London than the ones who entered it. London has attracted young people recently, but some older groups have left the city. This loss declined until 2009 but peaked once again, especially in 2016-2017.

This pattern is rather consistent and is leaving an effect on real estate prices. As a high proportion of people are leaving London to settle someone where else, there will be a fall in house prices in London as compared to the South East in the past two years.

In case if you are a young professional and looking for accommodation, you should try to find flats to rent in Edinburgh. CityLets.co.UK is a certified leading property portal that enlists properties for rent all around England. This site has been helping people finding ideal accommodation since 1999.

4.  Types of Property

The price for different types of properties increased and decreased in different patterns. Families can easily move to different locations as they can easily adjust into a different type of property.

With that said, its time we discuss the differences between prices of terraced properties in inner and outer London. This shows the inner London real estate market suffered from a drop-in value. This is once again consistency with Households moving to expensive inner regions.

5.  Investment Opportunities

Migration flow isn’t the complete story. The southeast is also suffering from shortages, but it’s time we discuss the monetary environment and low interest rates.  Housing in London is included by its role as an investment along with being a consumption good.

Investment motives for buying housing are important in other areas, but London has some special characteristics. Prices in London are more responsive to changes in interest rates than anywhere else.

Speaking of falling prices, the average flat in London costs more than £400,000. The average flat in south-east costs £200,000. Even if we ignore the massive difference, this is still beyond the resources of most first-time buyers unless they have strong additional support. In short, the price falls will unlikely to benefit first-time buyers.

In this article, we are going to have a look closely at the earnings per share formula – including why it is important, what it is used for, what it indicates, and how it can be worked out.

Earnings per share (commonly abbreviated to EPS) is a financial figure based on a calculation  that show the past profitability of a company, the present profitability of a company, as well as that profitability that it could experience in the future. The EPS can be calculated by first establishing the net income (the net income is the income that a company makes after overheads have been considered), and then dividing this number by the total number of outstanding shares that the company in question has. If you are new to the stock market and the world of investing, you may not know exactly what ‘outstanding shares’ refers to – it refers to the number of shares that a company has that are not held by them, for example those that are held by its various different types of shareholders, no matter how big or small they may be individually. In simple terms, it is a calculation that one can execute and that can be useful as part of the decision in whether or not one would like to make an investment in the company in question, and whether or not they think the idea is a financially wise one.

The earnings per share (EPS) therefore, refers to what proportion of  a company’s profit has been dedicated to each individual share of that company’s stock. People regard this measure very highly, most particularly those that are interested in and that invest in the stock market actively – investors and traders. It is generally accepted that if a company has a higher earnings per share value than another, then it also has a better level of profitability and is therefore usually the more desirable option for investment. When the earnings per share is being calculated, it is recommended that a weighted ratio is made use of, since the number of shares that an organisation has in different types and places can be a varying one over the course of time naturally. The ‘weighted average’ of a company refers to the number of outstanding shares, more specifically, how much the number of outstanding shares that a company has, has changed over time, and whether or not it has at all! It is considered to be an important calculation to make prior to working out the earnings per share, in order to obtain a more accurate reading of where the company could be in the future, and to ensure that the earnings per share value that is obtained is not just one that is based on recent successes and endeavours of the company.

With the weighted earnings per share in mind, there are two different ways that the earnings per share value of a company can be calculated. It can be calculated firstly as the normal earnings per share, which is done by establishing the net income of the organisation in question after tax and then dividing this number by the total number of the outstanding shares that a company has. Alternatively, it can be calculated and a more realistic result can be obtained by calculating the weighted earnings per share value, which is done by taking the total dividends away from the net income after tax, and then dividing this number by the total number of outstanding shares that the company in question has.

The earnings per share value can be a provider of valuable information to a potential investor, depending on what type of investment that said investor is looking for.

The earnings per share value can be a provider of valuable information to a potential investor, depending on what type of investment that said investor is looking for. For example, an investor may be in search of an investment that is slightly more risky but that could provide extremely high returns if there risk happened to be worth it. On the other hand, an investor may be looking for an investment that can provide them with a steady source of reliable income that keeps any risk-taking to an absolute minimum. The earnings per share ratio of a company can tell this investor how much room the company in question has in terms of room for expansion to take place, and how reliable an investment they are making, as well as how much potential the investment has to return their needs.

Different types of Earnings Per Share Measure

There are many types of earnings per share measures that exist, three of which get the most focus from investors and shareholders.

Trailing EPS – the ‘trailing EPS’ is the earnings per share that the company in question had throughout the course of the previous financial year. It is an accurate reading to think about since it is based on  actual factual financial happenings within the organisation being looked at – it is not merely guesswork that is based on predictions on the company and how they think their business year is going to end up. However, the main problem with this figure is that it does not refer to what is relevant at the current time – a company’s profits can be extremely different 10 months apart.

Current EPS -  the ‘current EPS,’ refers to the earnings and the numbers of the company at the present time. This figure can be based on differing data however, in that a certain amount of the data will be factual and will use recent factual information surrounding the organisation in question, whilst the remainder of the data will be made up of reasonable predictions. The accuracy of this number is very much reliant on what stage of the financial year the company is in when the readings are made.

Forward EPS – ‘forward EPS’ is a number that is based on the profits that the organisation believes they will be making at some point in the future. These estimations are made either by the company in question, or stock market analysts. Anyone that is seriously considering investing in a company should consider these values, since they can be a good indicator as to what the future holds for the company.

We are often asked which is better – property or an investment portfolio. Below, Dan Atkinson, Head of Technical at EQ Investors, answers all your questions.

We invest many things during our lifetimes. Whether it’s time, money, or experience that we are investing we are always looking for a future outcome. When we invest money it’s important to frame our decisions with what we want our future to look like. It’s helpful to have this approach when we decide how to invest our money.

One decision people often consider is should they purchase a buy-to-let property, or should they build an investment portfolio? It’s not quite a clear-cut decision and a better question would probably be, what mix is right for you? Let’s have a look at some of the important factors you need to think about.

Buy-to-let

Many of us are familiar with the housing market and have watched our own properties increase in value. A property rented out to reliable tenants can be an excellent source of income. Rents vary hugely across the country, so always do your research.

It is important to remember there will be costs to cover such as general repairs and maintenance, agency fees and insurances. These costs will continue whether you have paying tenants or not. As a landlord you will also be taking on a number of legal obligations which may result in additional costs. You can outsource some of your responsibilities to a manging agent but this will reduce the return.

However, over the last few years the Government has started to reduce the tax efficiency of property investment. Investors will pay an extra 3% Stamp Duty Land Tax when they buy a residential buy-to-let property. They also previously enjoyed Income Tax relief on mortgage interest, but this is also being reduced and will be restricted to 20% from April 2020. When they eventually come to sell their properties, this will now be subject to Capital Gains Tax (CGT) at 18% (within basic rate band) or 28% (higher and additional rate taxpayers) on the gains.

This coupled with rising property prices leading to lower yields makes it harder to find the right property and more expensive to build a diversified portfolio than it was in the past.

Investment portfolio

Investment portfolios can potentially enable you to spread your investment more widely as you are not having to buy one expensive asset. This means that investors can build up more diversified portfolios to generate income and capital growth. Instead of having their investments just in one town, city, or country they can invest across the globe. Spreading their money into different types of investment such as property, equities, and bonds helps reduce some of the risks.

Whether you choose to build your own portfolio or delegate this to a professional, there will be costs. These relate to the ongoing management of the funds, ensuring that the overall mix remains suitable for you, and a structure to hold these safely and securely.

Investors have a choice about how they hold their portfolio. ISAs in particular provide freedom from Capital Gains Tax and Income Tax; you can add £20,000 to your ISA each year.

Income generated by a portfolio is taxed differently to property. For investments held outside an ISA, the first £2,000 of dividends are tax free and the subsequent rates (7.5%, 32.5% and 38.1%) compare favourably with the main rates of Income Tax (20%, 40% and 45%). Some of the income generated by a portfolio will be taxed as Interest and most investors will have a tax-free Personal Savings Allowance of up to £1,000. The respective rates of Capital Gains Tax are also lower at 10% and 20%.

Perhaps the biggest advantage of using an investment portfolio approach is liquidity. It isn’t possible to dip in to the capital value of a buy to let property without selling the whole thing. In comparison you can sell part of an investment portfolio if you need access to capital. As well as the practical and tax considerations, it is normally a lot quicker to sell an investment than a property.

In summary

So what about you?

As with many aspects of life and financial planning there is no easy answer. You should consider what you need this money to do for you. For most people our money is there to serve our lifestyles (current or future). If we start to find managing the money takes away from this then we probably need to reassess our decision.

If you are likely to need to dip into it then an investment portfolio might be more attractive. Delegating responsibility about where to deploy your money and the day-to-day management may also become desirable as how we want to spend our time changes.

While many traditional methods and procedures are still in play, firms are adopting modern and innovative strategies to draw in a hipper and younger, yet more demanding, clientele.

From new technologies to fresher approaches to client service, here are the top trends that are sweeping and changing wealth management today.

A Digital Industry

2018 witnessed a firm-wide and strategic digitalization of wealth management companies. The trend continues to this day as big and small firms reshape the different aspects of their business to embody the change.

As the industry prepares for a generation of younger and tech-savvy clientele, integrating digital strategies to their marketing efforts and creating more efficient client-advisor interaction channels become essential.

Firms that have already taken the lead in implementing a centralized digital management strategy are raising the bar and driving competitors to do the same.

In the words of FinTech Advisor and ASEAN/India Retail Banking and Wealth Management Expert, Arvind Sankaran, “We are witnessing the creative destruction of financial services, rearranging itself around the consumer. Who does this in the most relevant, exciting way using data and digital, wins!”

Sustainable Investing Is Here To Stay

The Institute for Sustainable Investing’s 2017 “Sustainable Signals" report showed that there is a growing interest in sustainable investing and the adoption of its principles among investors. What's even more interesting is that millennials are taking charge.

Millennials take sustainable to the center stage as they search for more socially and environmentally conscious investment opportunities.

This increasing demand for sustainable ventures will continue to push wealth managers to take impact investing more seriously. Thus, the next years may see financial advisors incorporating the environmental, social, and government (ESG) philosophy into their services and financial planning approaches.

The Rise of AI and Robo-Advisors

Taking into account the millennials’ fascination with anything technologically-inclined, it’s not at all surprising that the idea of Robo-Advisors resonated and connected with young investors quite well.

In a statement, the automated investment service firm, Wealthfront, commended the ability of software-based solutions in delivering investment management services at a “much lower cost than traditional investment management services.”

While it can be argued that Robo-advisors can never replace competent human financial advisors in terms of creating customized long term investments or tax and retirements plans, the competition between automated and human advisors have benefited the clientele. For one, it drove the costs asset management down. More importantly, it forced financial planners to step up their game and prove their worth.

Basing on current trends, digital assistants (Robo-advisors, chatbots, and other forms of AI interactions) will continue to play a significant role in empowering client-advisor experience. We might be looking at a future where AI becomes a fundamental element in crafting large-scale hybrid advice offerings.

A Focus on Customer Experience

2018’s World Wealth Report identified that many clients think the relationship they have with their financial advisors and wealth managers falls short of their expectations and can use some improvement.

This is clearly a heads up for advisors and managers out there. In the wealth management industry, customer experience holds great weight for clients. For most investors, client-advisor relationships are critical because they believe in their in-depth implications on the realization of financial and life goals.

These days, investors are gradually witnessing moves towards better customer satisfaction as wealth management companies embrace automation and hybrid models of financial management, and re-engineer their strategies to satisfy demands and ensure that customers have the best possible experience during interactions.

With the new breed of investors putting a prime on user experience and opening themselves to the possibility of switching to other wealth management providers if their expectations aren’t met, the best way forward is to innovate and shift to strategies that put the client and their needs at the core.