October has arrived, which means it really is summer time now, with thunderstorms, sweltering hot days, late sunsets and all downhill to the end of the year parties. It also means the end of another quarter and as such a good time for a quick review of finances. Now as a rule I do a major review at year-end, but I use each quarter end for a quick check up. How are your financial goals for 2011 doing? Have you been saving enough and what's the status of your emergency slush fund? Is your investment portfolio on track and how's the trading going? This is not about setting goals or changing existing ones, it’s really more about making sure you’re still in control.
 
On Tuesday at 20h00 we have another webinar from Keith Mclachlan who is determined to help us better understand and use fundamentals for investing. This week he is looking at an Overview of Valuation Models (book here). There are probably as many ways to determine a valuation as there are companies to value; Keith will narrow it down to a few of his preferred methods before expanding on them in future webinars.
 
In the past week we had a great presentation from Mark Weetman at the JSE Power Hour on Diversification and Wealth. Any half decent portfolio needs diversification and Mark shows us why and more importantly how. A major benefit of the presentation is that he is mostly using a range of the EFT and ETN products available on the JSE, so nice and easy.
 
100 Second Tip
Who's driving your bus?
It is simple. If you're not driving your bus then somebody else is driving it and you're going to their destination, stopping at their preferred stops and basically not in control. This is applicable to our lives, but it is equally applicable to our finances. Stop for a moment and ask yourself if you are in control of your money, or is it on somebody else's bus or even worse - a driverless bus?

The week ahead

Tuesday at 8pm - Overview of Valuation Models 

The week that was

JSE Power Hour on Diversification and Wealth

All the best 

JustOneLap.com

twitter.com/JustOneLap

facebook.com/JustOneLap

So we're out of the Rugby World Cup, not going to the African Cup of Nations soccer tournament later this year and failed dismally at the Cricket World Cup earlier this year. Looking on the bright side, at least we're not one of the bosses of troubled Belgian-French bank Dexia. Over the weekend governments of France, Belgium and Luxembourg announced that they had reached a deal to dismantle this troubled bank and it now has the distinction of being the first victim of the Euro zone debt crisis.
 
We have two webinars this week with the first being on Wednesday at 13h00 - The JSE auction process. At the start and end of every trading day all stocks on the JSE go through an auction process to ensure a fair opening and closing price; this webinar will explain how it works and how you can take part in the auction process. It will also cover the less frequent volatility auction that happens when a stock makes a sudden large move during the course of the day.
 
On Thursday at 17h30 is another JSE Power Hour event and the topic is Derivative Trading. Ten years back, the only real derivative option for us to trade was warrants, but this space had exploded and the webinar will look at the different derivatives on the market including the risks, styles and when to use them.
 
In the past week we had Keith Mclachlan doing another of his keep it simple webinars - this one an Overview of Valuation Models. He broadly sketched out the different methods and in later webinars will start to delve into the different models in more depth. This is a great top-level overview of some valuation methods.

The week ahead

Wednesday at 13h00 - The JSE auction process

Thursday - 17H30 - JSE Power Hour: Derivative Trading

The week that was

Overview of Valuation Models

Money tip

Most people either have a home loan or will soon have one as they buy their first house. These days a home loan is an access bond in that you can deposit extra cash into it, effectively paying off the debt quicker, and if you need to, you can withdraw the extra money as required. Depending on the value of your house and your credit history, you may also be able to extend the value of the loan making more cash available for withdrawal in the bond.

All is well and good and your home loan is likely to be your cheapest (lowest interest rate) debt as it is long-term and secured by an unmovable asset - your house. BUT the flip side is that as long-term debt it should never be used for paying off short-term bills.
 
For example, taking money out of your home loan to pay off a car debt may seem like a great idea - especially as it'll cost less per month. But the reality is that this means you'll be paying off the car for the next 20 years (the duration of the home loan) while your car is unlikely to survive even 10 years. So for at least half the time you'll be paying for something you no longer own and the car will end up costing a lot more than if you'd paid it off over 5 years!

All the best

The JSE is hosting a myShare Day on 22 October for those in greater Johannesburg. JustOneLap will have a stand and I will be doing a presentation on 'Shoes or Shares' at 09h00, 12h00 and 15h00. There will be a number of other presentations as well as explanations and stands by brokers and ETF issuers around their products. More information and online booking (yes you have to buy a ticket for R50!) is available here.

In the week ahead we have a webinar on Wednesday at 20h00 - Silent Trading Risks. It will focus on the three seemingly small but potentially significant threats every trader faces but is often oblivious to - spread, slippage and costs. This is a must attend webinar for all traders.

We had a great webinar in the past week. Understanding the JSE Auction Process. It is a short webinar explaining exactly how the auction process works. It is simple, but like much else, only when you've had it explained to you. So become a pro on the auction process and learn all about JSE auctions (opening, closing, volatility and mid-day).

Week ahead

Wednesday at 8pm - Silent Trading Risks

Week that was

Understanding the JSE Auction Process

Money tip

Last week we suggested that you don’t use long-term debt (your home loan) to pay off short-term assets (your car). A couple of people emailed to say that they have always used their bond to buy a car, but with the proviso that they paid the money back into the bond in some three years.

Agreed, your home loan is usually your cheapest form of debt and as such a great source of cheap funds if you have excess money in the bond. BUT only if you then pay the money back in the shortest time possible, not over the twenty year life of the bond.

All the best

JustOneLap.com

twitter.com/JustOneLap

facebook.com/JustOneLap

At some point in time everybody applies for credit. When it’s your turn, the credit provider is going to check your credit rating and base his or her decision to lend you money on that rating. So the question is simple, what is your credit rating? Here at JustOneLap we talk about know your money - grow your money and an important part of this is to know your credit rating - check your credit rating. Know what your current credit providers are saying about you and make sure that it is accurate and fair.

So how do you do this? Easy, pop along to Credit Report and for R80 they will check your credit rating at SA's three major Credit Consumer Bureaus and send you a report. They'll also explain how to correct any incorrect information and how to improve your credit rating. Click here to get you own credit rating report.

In the week ahead we have another webinar from our FX expert - Alwyn Burger. This month the topic is Selecting FX Trading Pairs. Typically people will decide to trade one or two set pairs such as cable or EURO/$, but are they where the profit is? Different FX pairs will behave differently and one pair may be dead, offering no profitable trading, while another may be cooking up a storm, handing out profits left right and centre. This webinar will help you understand how to decide which pair to trade this day or week.

We had a great webinar focusing on maximising profit by avoiding leakages in your trading last week. Silent Trading Risks looks at spread, slippage and costs. Every trader knows about them, but to become an elite trader you need to tighten every aspect of the trading process. This webinar is designed to focus our attention on these three leaks that can make a significant difference over a trader year.

Coming up

Monday 24th Oct at 8pm - Selecting FX Trading Pairs

Tuesday 1st Nov at 1pm - Trading agricultural futures

Thursday 3rd Nov at 1pm - Momentum portfolio - update Q3 2011

Week that was

Understanding the JSE Auction Process

Money tip

Know your credit rating - check your credit rating. Enough said.

All the best

JustOneLap.com

twitter.com/JustOneLap

facebook.com/JustOneLap

So Greece gets saved again with more haircuts and bailouts and the end of the world is cancelled again, until it isn't. With a 24/7 news flow it is far too easy to get trapped into the minute details and miss the big picture; and the big picture locally is that a number of stocks were ridiculously cheap regardless of what happened to the EU sovereign debt crisis. As investors we need to lift our heads, ignore the noise and make decisions based on facts rather than fears.

Alwyn Burger did an excellent yet simple webinar for us last week on Selecting FX Trading Pairs. Most traders will have a preferred FX pair or two that they trade, but are they offering opportunity? Are there perhaps better FX pairs to be trading right now? Alwyn suggests a simple method to decide which to trade and which to ignore.

We have a packed week coming up, starting on Tuesday at 13h00 with a webinar on Trading agricultural futures and options. There are two great things about agricultural futures: they only trade 09h00 – 12h00,perfect for the lazy amongst us, and more importantly, they are uncorrelated to the other financial instruments we trade. The maize price doesn't care what's happening in Greece, it cares about rain, supply/demand, crop yields, etc. for the year. Now as traders we don't need to be farmers to understand it all, we just trade the price that moves independently from financial markets.

On Wednesday at 20h00 we have another webinar from our fundamental expert - Keith Mclachlan and he's venturing down the road of valuation models, starting with the basic Valuations: Price Earnings (PE) ratio. It may be basic but as the most popular model used for valuations it is critical we understand the methodology as well and the pros and cons.

On Thursday at 13h00 we will doing the Momentum Portfolio Q3 update that we've been running for 2011. This is the update for the end of Q3 2011. At the last update for end of Q2 2011 it was doing very well and beating our benchmark (the Top40). The beauty of this system is it's pure simplicity - buy the winners - and so far it's doing great, but the update will tell us if it's still working.

Coming up

Tuesday 1st Nov at 1pm - Trading agricultural futures and options

Wednesday 2nd Nov at 8pm - Valuations: Price Earnings (PE) ratio

Thursday 3rd Nov at 1pm - Momentum portfolio - update Q3 2011

Thursday 10th Nov at 5.30pm - JSE Power Hour: Cannon Super Dogs

Week that was

Selecting FX Trading Pairs

Silent trading risks

Money tip

It may still be October (sure late October) but Christmas decorations are already appearing and that means the mad hurtle towards a spending spree of note is about to start. While things are still calm, stop and take stock of your Christmas spending plans. What did you do wrong last year, how can you be smarter this year and perhaps most importantly - how can you spend less. No-one is going to begrudge you for looking after your financial state of being rather than going on an all out spending spree that sends your credit card into a state of shock. Maybe talk to family members about joint gifts, bring-and-share meals or even buying ETFs for the kids rather than over-priced toys that are typically forgotten before the summer heat has faded?

All the best

JustOneLap.com

twitter.com/JustOneLap

facebook.com/JustOneLap