Savvitas had the honour of welcoming #OnAir leading financial journalist and best-selling author Rodney Hobson in which he presented Investing for Recovery.
Rodney first took us back in 2008, and the subprime mortgage crisis; the crisis had repercussions, with the FTSE, and stock markets around the world experiencing a sharp decline. However, as a result of this crisis, a change took place and from the crisis until today we entered a ‘golden age of investing’. According to Rodney, there are similarities between the 2008 crisis and the impact of the coronavirus at present. The FTSE can however cope with these crises.
Although most shops had to close, along with restaurants and the hospitality industry, when they reopen people will spend again. This will help recovery. Banks now are stronger; they need to have reserves that enable them to withstand the pressures of a slowdown; and have been encouraged by government not to pay dividends.
So how important are dividends? Dividends are the point of investment. Dividends vary according to the vagaries of the share price; they allow the company to retain the cash needed to finance itself.
Concerning investments: To begin with, it may be wise to invest mainly in larger companies, then turn to smaller companies as one becomes more knowledgeable. Small businesses can be profitable of course, this represents the risks - ‘the bigger risk you take, the more money you may gain, or of course you may lose’.
In summary, ‘Start big and boring!’ always include some tech stocks in your portfolio, Rodney chooses technology companies that do something tangible, and decide the level of risk with which you’re comfortable.
Rodney is author of the best-selling ‘Shares Made Simple’, now reprinted
three times, and the ‘Book of Scams. He has also published a successful series
of ‘Inspector Paul Amos’ crime novels. See: http://rodneyhobson.co.uk/ @RodneyHobson
Report by Ivrina Nivarosa, Savvitas International Intern Programme