Though there are many strategies that investors should follow, I tend to follow a strategy where I would buy investment companies if they were at a discount to their NAV of at least 20%. I tend to find that downside is restricted if investors follow such a policy. If market were in a bear market phase (i.e. falling market), I would widen discount to say 30%. If in a bull market then discount could be narrowed to say 15%.

EARNINGS PER SHARE (EPS): Another tool that should be used by investors is to look at track record of company concerned. By this I mean growth (or lack of it) in Earnings per share. A good management team should be able to register a solid annual increase in EPS of say 15% per annum. It should be able to do this on a consistent basis.

The problem facing Cypriot investors is that there are many companies that have listed on Cyprus Stock Exchange that have registered massive jumps in their earnings in 1999-2000. Prior to this they were producing low earnings. What should investors do in such cases? In my opinion investors should look at Prospective EPS and anticipated growth over next few years.

There are also a number of non-financial factors that need to be considered before making investment decisions. These include track record of management team, prospects of Company and its industry, state of economy etc. Some of these factors have already been mentioned in some of my past articles.

CONCLUSION: In my article I have deliberately tried not to overload investors with too much information. This I believe is duty of financial experts to analyse. However I do believe that investors need to know basics such as P/E Ratios, Net Asset Values etc before making investment decisions. I believe it is time that Cypriot investors should do a lit a bit of research before making investment decisions.

Disclaimer: No responsibility for loss can be accepted to any person acting or refraining from acting as a result of material in this article.

Andy George is an accountant with years’ experience as a lecturer. Andy was financial correspondent for eight years at the Cyprus Financial Mirror where he wrote articles on business & accounting related issues to a non-technical audience.

He is the author of eBooks: How to write and Publish Your Own With a Shoestring Budget http://www.budgetebook.com New! Easy Way to Make Auto-Pilot Income http://www.budgetebook.com/cbmall

Asda state that they give you “very best possible insurance protection” and offer a 10% discount if you buy online. Of course, just like Tesco and Sainsbury’s, Asda is not an insurer. Asda have opted to team up with Norwich Union to provide their policies.

The insurers are desperate to get into bed with Supermarkets. It enables them to dress up their car insurance product with an already well known and trusted brand name. This is good business and a smart way to gain lots of new customers very quickly. Ironically though, some of those ‘new’ customers may already be with that insurer. Without knowing it, they may end up cancelling or not renewing their existing policy but staying with same insurance company via cheaper supermarket option.

From a customer perspective, upshot of all this will hopefully be to get cheaper car insurance, which at end of day is what everybody wants. Who insurer is behind deal is probably not of great concern to people. In long term, whether actual underwriting results of these deals are profitable enough for insurers to continue to offer supermarkets good rates for their customers, will be interesting. One thing is for sure, I don’t see Direct Line advertising bananas six for a pound anytime soon.

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