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Podcast: Roger Montgomery talks about the best time to buy stocks

Posted: 12 June 2020 7:36 am News

Investing expert Roger Montgomery for pocket money podcast

2020's stock market has been a rollercoaster, but is there an opportunity in the volatility?

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This year has been a wild ride for stock investors. Thanks to coronavirus, the oil price war and growing tensions between global powers, we've never seen a more volatile stock market.

In a single day in February, we saw share prices on the ASX drop by 7%, only to rise by 14% within a couple of hours. It was enough to leave the most expert of experts scratching their heads.

But where there is volatility, is there opportunity?

Fund manager Roger Montgomery of Montgomery Investment Management shares his insights about why the stock market is behaving so erratically, and whether there might be another crash on its way.

Topics discussed in this episode:

Investing chat 101

Investing talk can sound like a foreign language for those of us who aren't in the know or are new to the game. Here are some explanations for some of the jargon you might hear used in this episode.

Price-earnings (P/E) ratio: The relative value of a company's stock price to its recent profit results, i.e. the price investors are paying for every dollar of profit the company makes. A high P/E ratio may indicate that the stock is overpriced or that investors are expecting growth to occur in the future and are willing to pay more for it.

V-shaped recovery: Where there's a quick decline followed almost immediately by a quick recovery.

Private equity funds: Investment funds that hold private companies that are not listed on a stock exchange.

Fiscal Stimulus: Measures taken by governments or central banks to financially support the economy. May include cutting interest rates, tax cuts and funding.

CLO (collateralised loan obligations): A type of security that pools multiple company debts together. These companies are typically at a higher risker of defaulting on their loans.

CDO (collateralised debt obligations): Played a key role in the GFC. Investment products that can contain various types of debt and other assets, including corporate debt but also personal loans and mortgages.

GFC: Global financial crisis.

Read the transcript of this episode


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