Posts Tagged ‘Australian share market’

Types of Shares

Monday, January 18th, 2010

“Success is not a matter of chance it is a matter of choice;

it is not a thing to be waited for, it is a thing to be achieved.” William Jennings

Blue Chip Shares

These shares are with companies that have large market capitalisation and over one billion dollars. They have steady growth and profit. They are normally the top 150 companies in Australia and are good secure investments for long term growth. Companies include Major Banks and supermarket chains, BHP, Telstra and so AXS carries a list of these.

Growth Shares

These are companies that hold a larger part of their profits for expansion. Companies with shares in this category do not pay high dividends the percentage is usually around 2 – 3%. These companies grow in value because of the profit.

Income Shares

These types of shares will pay you a healthy dividend, so are sort after by investors whose purpose is to derive steady income from the market. Profits determine the growth, companies with these types of shares generally keep about 40% and pay returns of around 4-6%.

Defensive Shares

These are companies and businesses that perform and are managed well under most conditions sometimes referred to as ‘lean and mean’. They will form part of your portfolio if you are risk minimising and fear market corrections. They are not boom stocks but steady onrs. Defensive stocks include utilities, food, property trusts, pharmaceuticals or necessary items.

Cyclical Shares

These are shares that companies are affected by economic cycles they do well in an upturn and not so well in a downturn. They deal in commodities that are in or out of favour depending on market mood. These shares are within the tourism industry, airlines, building industry etc.

Penny Dreadfuls

These are start up companies with no performance record. Their share price is usually around $1.00 or less. There are plenty in the market, be careful with these companies as they may not last. Do your homework with these thorough company reseach is required.

Have an Amazing Day

Teresa and the Team at

AustraliaWealth.com.au

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Some General Information for Share Investors

Saturday, December 12th, 2009

If you are considering investing in the share market for the first time I am sure you have many questions, there is definately a lot to learn. This shouldn’t stop you getting started though as long as you take some time to learn what you can and get familiar with some of the key aspects, get some advice from experienced traders through books, dvd’s or courses and don’t invest all your available money in one stock or market. Here are a list of some frequently asked questions that may help…

Do you need to use a broker?

Yes you do, stockbrokers are the registered professionals who are licensed to buy and sell shares on the stock exchange. As professionals they are regulated both by the Australian Stock Exchange and the Australian Securities and Investments Commission. Brokers charge a fee for the service, the amount of which varies between brokers and also depends on the size and frequency of transactions. There are two types of brokers:-

  • Full Service Brokers – They usually provide clients with advice, research and a range of other services in exchange for the brokerage fee.
  • Discount Brokers – These brokers often have a flat fee for buying and selling shares, they do not offer advice or research.

If you’re not too sure what you’re doing a full service broker could well be worth the extra fees.

What is the difference between a ‘bear’ market and a ‘bull’ market?

A bull market is an overall upward movement in the value of stocks (an up-trend), it is an indication that prices and interest in the market is strong.

A bear market is a downward movement ( a downward-trend) where interest and prices in the market are falling.

The overall state of the Australian Stock Market since the the late 1800’s has been an up-trend even so the share market is by nature volatile prices rise and fall everyday. However it does indicate the liklihood of growth if you were to hold good quality (blue chip) shares over the long term.

Why does the sharemarket rise and fall?

The share market has it’s foundations in the economy but it is a market run on the fear and greed of investors. When the overall economy or an individual company is looking strong investor activity increases and the market goes up (bull) but if something should happen such as changes in interst rates or a business shake up that affects investor confidence the market will fall (bear). If you examine the economic cycle of the country you are investing in and compare it to historical data of the share market you may see a pattern emerge.

When is the best time to buy or sell?

This has to be your decision, it is your money invested and it will benefit you to have some knowledge in the particular strategy you are using, however it is also wise to listen to professional advice but make  the final decision your own based on the facts you have gathered. In saying that, it is always a good idea to buy when the market is in a downward-trend  and sell in an up-trend, however timing is critical and not easy to pick. If you are a long term investor then this is obviously not such an issue  however whatever type of investment stategy you use it’s good practice to have a plan in place, a margin that you use to mark your entry and exit points. 

Is listening to the media a good idea when buying or selling shares?

Definately not. Bad news sells and the media has a great time using terms such as ‘crash’, ‘plunge’ and ‘plummet’ when referring to the share market. Do your own research, talk to your broker and don’t get carried away with the marketing of the news.

Power Thought

I am persistent in all my endeavours.

Remind yourself of this often.

Have a great day

Teresa and the Team at

AustraliaWealth.com.au

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Why Invest?

Monday, November 16th, 2009

Everyday I do investment research so I can pass on information that will help the readers of our blog on their path to create greater wealth. There is wealth to be made in Australia by Australian’s but only those that are willing to step a little out of the normal way most people earn a living.

Today I have been looking through Robert Kiyosaki’s book Guide to Investing, he states that those people who work hard and save will find it difficult to be wealthy because of the tax they have to pay on the money they earn. To save $1,000 would actually require earning about $1,300 or possibly even more.

There is nothing wrong with working hard and saving but if you want to do more than just earn a living then some other steps need to be taken.

Do you want to Invest?

Maybe this is a question that does not need to be asked, many Australians have taken to investing in property and the share market for a number of years now and the obvious answer to, why is of course to be more financially secure.

If we go a little deeper though most of us will find that money is not the only motivator. We also want time to be with family, we want to be able to afford to take a holiday or travel and provide ourselves and our families with the best opportunities for good health and education as possible.

Helping others is another reason to invest and create a substantial income for yourself. Even though those that work hard give the government a lot of their income limits on government funding means there are still many needy organisations that require donations to survive.

Why Invest? Is a question you need to answer for yourself and it is the first step to take if you want to be wealthy, it will be what will motivate and drive you. Answer this question as soon as you can, write it down and put it where you can read it at least three times a day.

Have an awesome day,

Cheers

Teresa and the Team at

Australia Wealth

www.australiawealth.com.au

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