Category Archives: Finance & Treasury

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5 Things Every Investor Needs to Know

By Morgan International Staff Writers 

Investments are a vehicle to store wealth and a wise investment will provide profit. Whether you are a personal or institutional investor, there is potentially a lot at risk when you begin investing. Therefore you need to have your wits about you. These are our top 5 things you need to know before you start investing:

  • Understand the different investment types

There are a range of different investment types such as property, stocks, bonds, funds, shares, and savings accounts. They each have different risk profiles and also varying windows for a return on investment. It is important to know the characteristics of each investment type.

  • Work out what you can invest

Decide upon what you have as an initial investment and potentially what you want to invest on an ongoing basis. You should also consider how much you can afford to lose in the worst case scenario as this will help you decide on your appetite for risk. For example, if you can’t afford to lose anything then you have no appetite for risk and you should be putting the money in a savings account with the bank.

  • Confirm what you want from your investments

Are you seeking additional income for now or are you looking at savings for the future? Most investors fall neatly into one of two categories – investing for income, or investing for growth.

  • Decide on your diversification strategy

To balance risk within your portfolio you need to diversify – this means choosing a range of investment types that will fare better/worse given the economic climate.

  • Decide on your risk appetite

It is important to understand the level of risk associated with each different type of investment. Higher risk investments, if successful, usually offer higher rewards. Lower risk investments conversely offer less reward.

In Summary

Investing is far from a game, and there is real money at stake. Therefore it is important to be equipped with robust knowledge before starting. Personal investors often hire the services of a CFA charterholder to assist them. Those looking to pursue a career in providing investment advice, or being an institutional investor typically look to gain the CFA charter.

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Life After Passing CFA Level I

By Morgan International Staff Writers 

You have passed your CFA Level I exam. Congratulations! I am guessing it has been a fairly tough couple of months – particularly if you are juggling work and study. Before you start considering Level II, you should first do 3 things, and we are here to tell you what they are.

  • Review and analyse

Whilst the exam is still fairly fresh in your mind, take some time to evaluate your exam performance. Were there any areas you were better or worse at? Maybe you ran out of time, perhaps you over or under wrote. Also consider any specific syllabus areas you were weaker on – particularly if they flow through into the later levels. Make a note of your analysis in key points and then put them away safely until you start to consider Level II.

  • Have some fun

If you are working full time, it might be the ideal opportunity to take some annual leave and go on holiday. Or perhaps you want to stay at home but have day trips, spend time with friends/family, and catch up on things you have neglected during your exam preparation. Whatever you choose to do, make sure you relax, destress, and recharge your batteries. Do your best to put the CFA out of your mind at least for a week or two.

  • What is next?

Once you are refreshed, it is time to think about how you want to study for the CFA Level II exam – even if you self-studied for Level I, it is time to consider if you want to get additional professional support this time around. Once you know what your approach is going to be, you can get the exam booked in, and then produce a detailed timetable for exam preparation.

In Summary

The CFA curriculum is incredibly demanding, and for those who pass their Level I exam, it is time to take stock, analyse the success, have some fun, and then get back on the horse to study for Level II while the Level I content is still fresh in the mind.

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Understanding Corporate Finance

By Morgan International Staff Writers 

Perhaps you have heard of the CFA charter and are interested in pursuing your studies, or maybe you just have a general interest in corporate finance. If either is true, then this blog is for you as we take a whistle stop tour of the key components of corporate finance.

Corporate finance includes the financial activities needed to run a corporate. Its primary concern is shareholder value maximisation through financial planning and implementation of various strategies over the short and long term.

One of the key activities is capital investment decisions, i.e. should an investment be made and how. If it should be made, how would it best be funded – through equity, debt, or a mixture of both. Another question to answer is whether or not investors should be offered a dividend as a return on their investment. These are the longer term questions a Corporate Finance Manager must answer. On a day to day basis there will be issues such as:

  • Inventory control
  • Management of current assets and liabilities
  • Short term financial issues and management of liquidity

Another key task is sourcing capital in the form or debt or equity. There are a number of options with respect to borrowing, such as commercial banks or issuing debt securities in the capital markets. The decision should be researched thoroughly and fit in with the strategic aims of the project itself and the organisation as a whole. Furthermore the organisation could decide to make a sale to raise equity. As you can see it is a complex decision including a number of factors.

One of the most important tasks in this role is to make capital investments through deployment of long term capital. The decision making process is primarily concerned with capital budgeting which includes a review of capital expenditures and future predicted cash flows, compares the proceeds and then decides which projects are within the budget. Over or under investment can put the company at grave risk.

In Summary

The role of a Corporate Financier is not for the faint hearted but it is well rewarded. It is an important role within the organisation that can determine its success or failure. If you are up for the challenge, why don’t you take a look at the CFA programme.

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Pre-CFA Exam Words Of Wisdom

By Morgan International Staff Writers 

Becoming a CFA charterholder is likely to be the longest and most difficult process most candidates have experienced in their educational lives so far. On average, a candidate will study for 300 hours for each level of the exam. This typically takes 6 months bearing in mind that most candidates also have a full time job.

Nailing the exam first time around for each level is far more likely if some straightforward study tips are followed:

Plan

Produce a timetable that covers the detail of what you will study and when. You need to fit in approximately 300 hours of study, which will include reading, retention activities, and mock exams. It is useful to build in some additional slack of approximately 5-10% to allow for unexpected events such as being extra busy at work or being unwell.

Consider a professional programme

You may want to undertake review days, or seek more detailed support. Consider what will work for you, do your research, select a provider, and schedule that into your overarching plan.

Find what works for you

We all learn and retain information in different ways. Some candidates may be able to read material once and commit it to memory. Others may need to use flash cards to retain information. Find out what works for you early on and utilise that technique throughout your studies.

Do practice papers in exam conditions

The CFA exam is arduous – prepare for that by undertaking practice papers in exam conditions. I cannot recommend highly enough taking a day out to do the full six hour exam in the two sections, with the set middle break.

Avoid panic cramming

If you have followed the tips above, there will be no need to panic cram. It will not only stress you out, but it may cloud the systematic learning you have undertaken.

In Summary

If becoming a CFA charterholder was easy, many more people would be pursuing it. To be successful, a methodical approach to study and exam preparation is fundamentally important. For more advice and tips, take a look at our website.

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6 Must Watch Films for Finance Professionals

By Morgan International Staff Writers 

Movies are a huge part of modern culture and a fair number have focussed on the lives of finance professionals – some legit, some far from it. Many of these films actually bio interesting individuals in the profession. So here are our 8 top watches for finance professionals.

  • The Accountant (2016)

Starring Ben Affleck and Anna Kendrick, this crime thriller follows a small-town Illinois CPA who has high functioning autism and makes him living out of ‘uncooking the books’ of criminal organisations globally who are experiencing internal embezzlement.

  • Wall Street (1987)

Gordon Gecko is a bad guy investor whose famed line is ‘greed is good’. For Gecko there could never be enough wealth and he embodied everything that was selfish and excessive about Wall Street in the 1980s.

  • Shawshank Redemption (1994)

His finance expertise saves banker Andy Dufrense from some pretty dangerous situations after he ends up in prison after being convicted of murdering his wife and her lover. He uses his accounting acumen to negotiate a number of benefits for himself and his fellow inmates.

  • Ghostbusters (1984)

Accountant Louis Tully is desperate to date his neighbour Dana Barrett who is played by Sigourney Weaver. However Dana’s is preoccupied as her apartment is haunted by a demi God called Zuul and there is a gateway to another dimension in the freezer. Who you going to call?

  • The Wolf of Wall Street (2013)

A black comedy biopic of Jordan Belfort who is played by Leonardo DiCaprio. This movie directed by the critically acclaimed Martin Scorsese was a box office hit. It follows Belfort’s debaucherous time as a stockbroker on Wall Street. It recounts his firm’s engagement in prolific fraud and corruption.

  • Lethal Weapon 2 (1989)

A comic but not flattering portrayal of the accounting profession as Joe Pesci plays a money laundering accountant who is a fall guy for cop duo Mel Gibson and Danny Glover.

In Summary

As with all things Hollywood, the portrayal of professions is typically at the extreme. These films are all very watchable in different ways, and should be particularly interesting for the finance students and professionals out there.

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Understanding Your CFA Exam Results

By Morgan International Staff Writers

Understanding your CFA exam results is not only fundamentally important to know if you have passed or not, but also so that you can evaluate areas of strength and weakness. At the highest level you will have either a ‘pass’ which indicates your total exam score met the MPS, or ‘did not pass’ indicating the MPS was unfortunately not met.

Thereafter there is a topic area performance summary which lists:

  • Each topic area covered on the exam
  • The maximum points that could be earned in that topic area (note that the maximum points achievable vary for each topic)
  • An indicator of the score range (≤50%, 51%–70%, or >70%) in which the candidate’s score in that topic area fell
  • Level III candidates receive two topic area summaries – one for the essay portion of the exam, and the other for the set portion of the exam.

If you do not pass, you will receive a score band (1-10). This shows how your score compares with the rest of the candidates who also failed. A score of 1 indicates performance in the bottom 10%, and the top 10% indicates being the closest to the MPS.

In the event a candidate is not satisfied that their exam result is correct, they can request for their exam score to be manually retabulated. A request can be made via a form which is available for 30 days following the release of the results. This is not a remarking process, but simply verification that the scores were totalled and recorded correctly. In the event the score is found to be correct, no refund of the retabluation fee will be due. However, if the score is found to be incorrect, even if it does not change the overall exam result, the candidate will receive a refund.

In Summary

Reviewing the performance report summary is incredibly important for candidates who have failed the exam as it provides a strong indication of stronger and weaker areas. This will allow candidates to tailor their exam preparation and revision to increase their chances of passing the next time the exam is taken.

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Top Non-Financial Skills Required in Finance

By Morgan International Staff Writers 

To be successful in the finance profession, candidates need more than a strong set of technical skills and relevant work experience. As organisations expect their employees to work more broadly, it is increasingly important to have a range of non-financial skills. These are our top six.

  • Communication

The capability to communicate verbally and through writing. This includes the very important ability to explain what the numbers mean to individuals who are not financially savvy. Furthermore, the skill of active listening as well as speaking should be mastered.

  • Stakeholder management

Managing relationships is an important life skill in both your work and personal life. This includes dealing effectively with colleagues, subordinates, management, and those outside of the organisation.

  • Marketing

Marketing yourself within the organisation and externally. This is only possible if you have awareness of, and confidence in your strengths. Those most successful at this can also convey that they have a personal interest in the outcome of what they are doing – they care! This is particularly important when you are managing somebody else’s money.

  • Attention to detail

One number being added on or taken off can make a huge difference – particularly when reporting results and communicating with the tax authorities. Also the information provided to management is used to make important business decisions, and therefore it needs to be accurate.

  • Organisational skills

You are likely to be very busy – managing a mix of business as usual activities with project based work. Into this mix you need to make time for training and development, and management responsibilities you may have. Therefore the ability to manage your time is of paramount importance.

  • Tech savvy

You will not only need to use the generic work systems, but you will be expected to use accounting software. As you move between organisations you will need to turn your hand to software packages you have not used before. Therefore developing good technical skills is a great asset to have.

In Summary

Whilst a Finance professional is expected to have a strong technical skills and work experience, organisations are seeking so much more. They are looking for well-rounded candidates who aren’t just focused on the hard numbers, but are able to communicate effectively and are able to manage their workload to the advantage of the organization.

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Avoid CFA Level I Exam Failure

By Morgan International Staff Writers

Nobody wants to fail their exams – however many do. In fact the majority do. In the June 2015 sitting, just 43% passed. We are here to share the top reasons for failure, along with ways to avoid it happening to you.

  • Can’t prioritize studying vs working?

This will likely be the first time that you have had to juggle full time work and study. We are not going to lie – it is challenging. But it is possible as many candidates succeed. We would encourage all candidates to consider that they need to undertake approximately 300 hours of study, then produce a detailed timetable of what will be done and when.

  • Out of exam practice

It may have been a few years since you have taken an exam and you may be a little rusty. There are plenty of old papers that you can use to practice. The key is to do them under exam conditions – that means you time yourself and make sure you are somewhere quiet.

  • Over estimating prior knowledge

For many candidates, they will have covered a lot of the CFA level I curriculum content in prior studies, such as their university degree. It can be all too easy to have a quick look over the syllabus and think you know it already. The best way to test this knowledge is to do some practice papers and see how you score. This will identify any areas of weakness.

  • Get external help

Your chances of exam success greatly increase when you have support from an experienced team of professionals. So don’t forget to get in touch with us and ask for support on your CFA journey!

In Summary

Yes – passing your CFA level I exam is not going to be easy. Chances are you will be out of practice, struggling to juggle all of your responsibilities, and be nervous about a 6 hour exam! However, there is a lot to be optimistic about if you consider and utilize some of our tips above.

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Tips on Getting Rich From Robert Kiyosaki

By Morgan International Staff Writers 

Robert Kiyosaki is an American businessman and author, famous for his personal finance series of books called Rich Dad Poor Dad. They have gained global recognition, being translated into 51 languages available in 109 countries. Although published in 1997, it is still praised for being relevant today.

Kiyosaki tells the story of his two fathers; one biological who was poor, and the other the father of a childhood friend who was the rich dad. Both of his father’s taught him to be successful, but with very different approaches. His Poor Dad is highly educated and saw that as his passport to success, but got caught up with things like job tenure and security. He becomes trapped in the Rat Race. This is in comparison to Rich Dad who is not well educated but focuses entirely on how to make more money.

The book presents two core concepts – a can do attitude, and fearless entrepreneurship.

Kiyosaki presents six key ‘get rich’ themes:

1. The rich don’t work for money

Opportunities in life come and go. The rich instantly recognise them and make something of them. The poor do not see these opportunities as they are preoccupied with making money and security.

2. The importance of financial literacy

The author emphasises the importance of financial literacy and a working knowledge of accounting, such as understanding the difference between assets and liabilities.

3. Minding Your own business

Strive for ways to become your own boss rather than making money for an employer. Nurture your own business.

4. Taxes and corporations

Be informed about how corporations are run so that you can use the ‘machine’ to protect and enhance your assets.

5. The rich invent money

Don’t wait around waiting for an opportunity to happen. Hire people more intelligent than you are and capitalize on that.

6. The need to work to learn and not to work for money

The Rich build skills in sales, marketing, management, cash flow, and systems.

 

In Summary

Rich Dad Poor Dad has stood the test of time as it is a thoughtful observation of what drives some individuals to wealth and others to pursue money for security. The latter will never be rich as they are too busy in their employment to recognise opportunities.

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Pre-CFA Exam Words Of Wisdom

By Morgan International Staff Writers 

Becoming a CFA charterholder is likely to be the longest and most difficult process most candidates have experienced in their educational lives so far. On average, a candidate will study for 300 hours for each level of the exam. This typically takes 6 months bearing in mind that most candidates also have a full time job.

Nailing the exam first time around for each level is far more likely if some straightforward study tips are followed:

Plan

Produce a timetable that covers the detail of what you will study and when. You need to fit in approximately 300 hours of study, which will include reading, retention activities, and mock exams. It is useful to build in some additional slack of approximately 5-10% to allow for unexpected events such as being extra busy at work or being unwell.

Consider a professional programme

You may want to undertake review days, or seek more detailed support. Consider what will work for you, do your research, select a provider, and schedule that into your overarching plan.

Find what works for you

We all learn and retain information in different ways. Some candidates may be able to read material once and commit it to memory. Others may need to use flash cards to retain information. Find out what works for you early on and utilise that technique throughout your studies.

Do practice papers in exam conditions

The CFA exam is arduous – prepare for that by undertaking practice papers in exam conditions. I cannot recommend highly enough taking a day out to do the full six hour exam in the two sections, with the set middle break.

Avoid panic cramming

If you have followed the tips above, there will be no need to panic cram. It will not only stress you out, but it may cloud the systematic learning you have undertaken.

In Summary

If becoming a CFA charterholder was easy, many more people would be pursuing it. To be successful, a methodical approach to study and exam preparation is fundamentally important. For more advice and tips, take a look at our website.