Investing & Trading Shares
Shares in the financial context refer to the offerings of a publicly traded company most commonly traded on an exchange. Although a company is allowed to offer large chunks of shares to certain individuals as a private placement, the purchase and sale of the common share is what will interest the average investor.
Trading shares is big business. According to one source, the cumulative value of all shares on the ASX in August 2008 was roughly 1.5 trillion dollars. A comparison study of investment types calculating returns over 10 years in Australia showed shares to have the highest average return, more profitable than say real estate or putting your money into a term deposits. For this reason, many are flocking to the share market in the hopes of earning a substantial reward.
Here are a few more reasons why investors love shares:
- Ability to diversify into virtually any industry
- Puts you in the driver’s seat of your investments
- Some tax benefits
- Ability to grow vastly quicker than inflation erodes
- Excitement and intrigue of the share market
In this section you will learn basic terminology to be comfortable with ‘share speak’. Dividends and capital appreciation are discussed in much detail (the two principal ways you make money with shares). Learn valuable principles such as diversification and concepts like the ‘market’. You will also be taught on the fundamentals of investing in shares so you know what are good shares to buy and those that are too risky and better left alone. Learn the process of finding the right broker, and how to place a trade. This is a must read section!
- Investing VS Trading
While investing can involve some elements of trading, and vice versa, they are two different concepts.
- Making Money In a Bear Market
How can long-term investors play this bullish market to protect capital and even make a little extra profit.
- Make Money Trading The Share Market
Making profits in the market is not easy and requires that we control behavioral problems. You will need to adapt your techniques for a bull and a bear market.
- How to Trade Like a Professional Trader
From choosing a broker to selling shares for profit, this is your quick guide to trading like a professional.
- What Shares Should I Buy?
Although you have likely gained some knowledge about the process to buy and sell shares, here are some publicly traded companies in the Australian Securities Exchange (ASX) to get you going.
- Investing in Cloud Computing Stocks
What is cloud computing and how might it change the way we go about business? Is it a good trend to invest in? Which are cloud computing companies to watch.
- ANZ vs CBA vs NAB vs WBC
Is now a fine time to invest in banking shares? If so, which of ANZ, CBA, NAB, WBC is well positioned fundamentally.
- BHP vs RIO
As mining stocks continue to be in the limelight – which one will come out on top as the winner in the ensuing battle? BHP or RIO.
- Creating a Trading System
How do you go about creating a trading system? Here are some checks and balances that you can employ to raise the odds of it being a winning system.
- David (DJS ) Jones VS Myer (MYR)
With these two companies competing for your investment dollars – which should you buy, DJS or MYR? Let’s examine them both...
- How to Treat Trading Like a Business
If you treat trading like a business, you will have better odds of being successful with a rewarding career.
- Creating a Trading Plan
Before you start buying and selling stocks, you need to create a trading plan and consider three key areas: Core rules, Psychology, Risk management.
- Wesfarmers (WES) vs Woolworths (WOW)
In another exciting round of publicly traded companies dueling it out – which of WES or WOW will come out on top.
- Dividend Imputation System & Franking Credits Explained
The dividend imputation system allows investors who have been paid a dividend to take a personal tax credit (franking credit) since the company has already paid tax (30%) on this dividend.
- Understanding the Share Language & Jargon
It is important that you understand the language & jargon of shares, as your evaluation of a company may be dependent on one vital piece of information.
- Learn how to diversify your portfolio
One of the most effective strategies to reduce risk is through diversification. Learn how to diversify your portfolio.
- What are Shares Dividends?
Dividends are the distributions that are paid using profits companies made during the year - it is like a reward to investors who have chosen correctly.
- What does ex-dividend mean? How to ensure you receive your dividends
What does it means when a share goes ex-dividend? Learn the important dates of a dividend, ex-divided, record date, payable date and ensure you receive your dividends.
- What is 'The Market'
Whether you've read about it in the finance section of the newspaper or heard it on the news, have you ever wondered what they mean by "The Market"? Why is it so important.
- Benefits of Investing in Shares
There are many benefits to investing in shares and we will investigate how this common form of investment can be an effective way to make money and dilute the risk.
- Choosing A Broker
There are 2 main types of brokerage firms, full service brokerage firms and discount brokerage firms (Online Brokers). Deciding which brokerage firm to use will depend on your trading style.
- How to Buy Shares
Step by step instructions on how to buy your first parcel of shares. Learn what 'Bid', 'Offer' and 'Last' prices mean and how you can take advantage of them with your trades.
- How to Make Money In Shares
The aim of StockWatch is to help beginner's learn about investing. These articles will teach you why investing is important, how to invest in shares, finding a broker & how to buy shares.
- How To Pick Growth Stocks?
Want to find stocks that will rocket in value? Learn how to pick growth stock by identying criterias such as EPS, P/E, Revenue & Book Value.
- What are Income Stocks? Best Income Stocks for 2010
What are income stocks and which ones are ripe for the picking for 2010? An income stock is a quality blue chip stock that will maintain its value while paying dividends. Here is out top 10 best income stocks for 2010.
- Building a Investment Portfolio Strategy
Portfolios do not come with a cookie cutter suitable for every investor. We need to analyze the investor and then select stocks that match the profile. To do so we need to consider three main areas: time, risk, reward. Learn how to build a customised portfolio.
- Can I Make Money Day Trading? How to Become a Day Trader?
What is the reality behind day trading? Can people make a living at it? What skills and training is necessary to be successful? Is it for you.
- Stock Market Investing and Share Market Tips
If I had to pass on a few tips that would help investors most, what would they be? The following stock market and share market tips should help keep you on the profitable side of the market.
- What Is Ethical Investing?
Ethical Investments are also sometimes referred to as Socially Responsible Investments, SRI. Some reports suggest that these types of funds will reach the value of 3 trillion dollars by 2011 in the USA and $15.73 billion in Australia. What are they and should we invest in ethical investments.
- Guard Your Portfolio With Defensive Stocks
When the market is choppy, trendless, or hard to define, what sort of stocks should you own as an investor? For many the answer is defensive stocks. What are defensive stocks, Why Invest in Defensive Stocks? What are examples of Defensive Stocks.
- Short Selling Explained: What is Short Selling
What is short selling? Why do we care? Short selling allows an investor to make money on both sides of the market action. Learn how shorting selling works and why you would short a stock. The rules and risks are also explained.
- How Much Do I Need to Invest in Shares
The minimum required to invest in a parcel of share in Australia is $500 however this is not advised as brokerage costs and transaction fees can eat into your capital.
- High Dividend Stocks
The process of picking high yielding dividend stocks is not nearly as simple as grabbing the one with the highest yield. Certain stocks have higher dividends than others. What types of stocks would these be? Here are example of quality stocks with high dividends.
- If I Could Only Invest In One Thing...
If I could only pick one investment to put my money into – what would it be? Precious Metals? Technology, Oil or Food.
- The S&P/ASX 200 Index (XJO)
The S&P/ASX 200 Index is a float-adjusted market capitalisation index. Only companies that are large enough and that trade with enough liquidity are included in the index.
- Trading the ASX 200 Index: ETFs, CFDs, Futures and Options
How do you go about buying or shorting the S&P/ASX 200 index in an efficient manner.
- S&P/ASX 200 ETFs: STW, IOZ, VAS
The 3 most popular Exchange-Traded Funds ETFs for the ASX 200 are the iShares MSCI Australia 200, SPDR S&P/ASX 200 Fund & Vanguard Australian Shares Index ETF.
- What are E-Minis Futures? How do I Trade Them?
An e-mini is a term used in futures trading. They are usually one-fifth of a major contract when index trading.