And whatever you do,
beware of the sharks in the ocean! 
|
Food for thought
Before you get too far through the great material
below, here is a little more food for thought:
Can I invest my SMSF funds in the share
market?
It might be possible to invest SMSF funds in the
share market, either for the long-term or maybe
for short-term profits. It depends on a few
things, including the SMSF documented investment
strategy. See some key information here in the Toolbox.
|
The (disappointing)
truth about blue chip stocks
Did you realise that:
- There is no strict definition of the term blue
chip.
- Blue chip stocks are not all they are
cracked up to be.
- Too many blue chip stocks fell significantly
during the GFC, so any investor/trader who
relied on good capital gains would have been
disappointed.
- Even blue chip stocks can tumble, and stay
stuck below recent highs for years.
See lots
of details and some real charts explaining
all this about blue chip stocks.
And what's the conclusion? It might be worth
spending a little more time to find investable
stocks further down the list of stocks.
|
About the share
markets (equity markets)
The Australian market
Australian
market operators - Since late October
2011 there have been two major share
market operators in Australia (ie. an
organisation which offers a facility whereby the
orderly exchange of company shares and derivatives
can take place). There are also smaller
specific-purpose market exchanges / operators.
- Australian
Securities Exchange (ASX) - This is the
major market exchange in Australia and used by
the majority of share market investors,
and
- Cboe
Australia - The newer market exchange in
Australia that opened in direct competition to
the ASX in October 2011. Originally known as
Chi-X Australia, and rebranded to Cboe Australia in
February 2022.
- National
Stock Exchange of Australia (NSX) - An
exchange specifically focused on small to
medium enterprises.
- Asia
Pacific Stock Exchange (APX) - An
exchange that operates in the Asia-Pacific
region providing opportunities for growth
oriented companies to raise capital.
Other markets
For information on other markets, see details at world-stock-exchanges.net.
Aussie
and overseas market operating hours and
holidays
The ASX Trading Calendar
- A list of the trading days/holidays in
the current year, and early finishing
times when appropriate. Also see the
various ASX options and expiry
calendars.
In addition to the ASX, Cboe Australia
(formerly Chi-X Australia) now handles a
large portion of trades in Australia. See
the Cboe Market Holidays
notices.
Time
of day on key world stock markets -
Brainy's web page showing a list.
 World
markets hours diagram (at
right)
Operating status of some
market exchanges
(at www.premiumdata.net)
Daylight
savings time adjustments around
the world
at: wwp.greenwichmeantime.com
NYSE
Holidays and Hours - Holidays and
hours for the coming months.
ASX Trading Hours and
Market Phases - A list of the
various phases that the market moves
through in each trading day from the
Pre-Open Phase through Normal Trading to
After-Hours. Perhaps the Opening Phase of
the Australian market is the one that will
be of most interest to local investors and
traders. This phase of every day's market
trading starts at 10:00am and lasts for
about 10 minutes. The listed securities
commence trading in five different groups,
depending on the first letter of their ASX
code as follows:
- Group 1 - 10:00:00am +/- 15 seconds
- all securities starting with a digit
0 to 9, or the letter A or B (eg. ANZ,
BHP).
- Group 2 - 10:02:15am +/- 15 seconds
- those starting with a letter in the
range from C to F
(eg. CPU, FXJ).
- Group 3 - 10:04:30am +/- 15 seconds
- those starting with a letter
from G to M (eg. GPT).
- Group 4 - 10:06:45am +/- 15 seconds
- those starting with a letter
from N to R (eg. QAN).
- Group 5 - 10:09:00am +/- 15 seconds
- those starting with a letter
from S to Z (eg. TLS).
World holiday dates at
investing.com (link removed due to
oppressive adverts).
|
SPI Futures - Information
about various ASX options contracts including the
SPI (Share Price Index) futures contract,
including the exercise timetable.
Brainy's
web page portal listing lots of web
pages for daily use to check on the market, and to
help with research.
Share Market
GEMS (summary list) - A summary list of
cliches and infamous share market tips (is 2 pages
when printed).
The Toolbox Members full version
(MA*) includes more details and explanations for
these share market GEMS.
Lotsa Web Links (MA*)
- A pdf file listing over 200 different and useful
web sites on a whole range of investing and
trading topics.
Robert has more
publications available. Some for free and
others for just a very modest fee. Many are
free to Toolbox
Members.
|
The share market indexes
See
market index details and history for more
information about:
- General information about our share market
indexes
- "top stocks"
- Market indexes and sectors
- ASX Indexes - Composition - How are all the
ASX indexes, and sub-indexes, made up?
- Which stocks are in each index?
- XJO - S&P/ASX 200 index
- XAO - All Ordinaries index
- Index re-balancing - recent S&P
news
- GICS codes (Global Industry Classification
Standard)
- Volatility Indexes (VIX)
- More S&P information about the
Australian Market Indices.
|
Alternatives to
share investing
At some stage, many investors think about
investing in something other than shares. This
could be a related financial instrument such as
foreign currency (FX), commodities, bonds,
warrants, options or futures contracts. The pros
and cons of these are not discussed here.
Just for interest, the range of commodities
includes:
- metals:
- copper, lead, zinc, tin, aluminium,
nickel, cobalt, molybdenum, etc.
- precious metals:
- gold, platinum, palladium, silver
- energy:
- WTI oil, Brent Crude oil, natural gas,
propane, etc.
- grains:
- rice, soybeans, wheat, cotton, coffee,
corn, cocoa, sugar, etc.
- livestock:
- other:
|
Getting started
Okay, so you think you want to take more control
of your investments, and perhaps to mange your
investments with a more hands-on approach. And
maybe even trade shares yourself. It can seem
scary; but it doesn't have to be.
"Learning how to do it
does cost time and money;
but it doesn't have to cost lots of money."
In very general terms, it is important to clearly
understand a few things like:
- How much money is available
for investing (ie. the funds)?
- How
much time do we need to devote? - See
a discussion
on the balance of time.
- Which asset classes do I want
to spread the funds across?
- What is my risk tolerance? Can
I tolerate a lot of investing risk, or not?
See the FiRT (Financial Risk Tolerance) table
in Brainy's eBook pdf number ST-2180 (see the
Member version,
or the page-1 preview).
- Which
stocks to ignore and which to focus on?
- That is, if you want to trade or invest in
shares, then how do you decide which ones to
focus on and which to ignore? See the
discussion below on Your
stocks universe.
- Do I want to take the sensible step of using
Funda-Technical
Analysis?
- Investing Plan and Strategy -
Who can help prepare a sound plan and
strategy?
See some tips
for
getting started, and more details
in some of Brainy's eBook (pdf) Articles.
- Professional advice - What
about the appropriate professional advice to
assist with planning and executing the
strategy?
- Practise, practise and more practise
- It can be very useful to gain some
confidence and experience in a safe
environment. Use paper-trading
to test out a strategy, or use back-testing
and trading simulation to test a strategy more
vigorously.
Are you Share Market Ready? Take a
look at Robert's
Share-Market-Ready checklist.
"Try to find someone who
seems fair and honest,
and who seems to make sense (sensible investing)."
Interested in share price charts,
and how to read them?
Take a look at some charting software (like
BullCharts), or
consider learning about Technical Analysis (ie.
charting).
Some pointers
Many people who start out learning about charting
suffer from information overload. Many people find
that over a 2 or 3 year period they find out
various snippets of information about charting
(Technical Analysis), and their focus is
distracted.
 Investing
in cyclical stocks? - One of the many
strategies for selecting stocks for investment is
to monitor the economic
cycle, and the investment
clock, and to select either cyclical or
defensive stocks as appropriate. See a discussion on this
approach.
Good
/ bad news can move share prices - Many
investors realise that a good news announcement
can move share prices, as can a bad news
announcement. And a good
news announcement can cause a company's
share price to
fall if the good news is not as good as
anticipated.
Intrinsic
value
(fair value) - How do we determine the
fair price for a company's shares? What about the
quoted intrinsic
value? See
a discussion here...
IPO
- Initial Public Offering - Are they
worth investing in? Some research indicates that
too many IPOs are under water for many months
after listing. Anyone hoping for nice capital
gains might be disappointed. See more details
about IPOs...
Reporting
/ Earnings season can move stocks - The
so-called reporting
season (or earnings
season) can produce news announcements
which investors like, resulting in a share
price re-rating upwards, or which investors don't
like, resulting in a negative re-rating of the
share price. Many investors watch the reporting
season in America. Note that there is a key
difference between the reporting season in
Australia, compared to the USA, as explained in
the following comparison.
| Australian
reporting season |
US
reporting season |
- Half-year
cycle - Most public companies
report each 6
months. This means that
companies will report either their interim
results (or first
half results), or their final
results (full
year results).
- Year-end
- Most public companies have a
financial reporting cycle with
year-end at 30 June each year, but
many have a year-end at 31
December. There are a few
companies who have financial year end
at different times again.
- Reporting
period - These companies are
required to report their latest
6-month finances within 60 days of the
end of the period - end-August for
most and end-February for many.
|
- Quarterly
cycle - Most public companies
are required to report quarterly - ie.
every three
months.
- Earnings
season
starts - Generally, each
earnings season starts a week or two
after the last month of the quarter.
So, for example, for the December
quarter (the three months of October,
November, December), companies
announce their earnings in January.
- Season
end? - Most companies have
generally announced their earnings
results within six weeks of the start
of the season.
- Alcoa
(a large company and listed in the Dow
Jones Industrial index) tends to kick
off each reporting season (often in
the second week of the month). This
announcement is always anticipated and
closely watched by analysts and
commentators, and rightly or wrongly
used as a barometer of the markets and
economy.
|
Author Strategies - It is a very
good idea to record your "preferred" ideas and
methods for "analysing" the market. Then they
start to crystallise. One possibility is to find a
"famous" trader / author - someone whose ideas you
like and feel comfortable with. This includes the
likes of: Alan Hull, Leon Wilson, Stuart McPhee,
Louise Bedford, Jim Berg, Frank Watkins, Daryl
Guppy, Stan Weinstein. These people are all
Australian-based (except Stan W), and they have
all published a number of text books on the
subject.
And the BullCharts software has implemented many
of their ideas and strategies as either chart
indicators, or market scans, or both. This
implementation is referred to as Author Strategies - see more
detail here...
But, one downside in heading down the track of
reading books is that in a couple of years time
you will probably have a head full of even more
ideas and will be no closer to your goal. Many
people find they have a bookshelf full of books,
that are only half read.
- Be
comfortable with spotting up trends and
down trends.
- Start
with the Weekly
Market
Analysis page in the Public area of
the Toolbox. It includes just a small
number of indicators - MA, GMMA, Momentum,
and Twiggs Money Flow (TMF).These are key
indicators, and very common (TMF not so
common).
- Follow
the
comments that are "on" the charts in the Weekly Analysis for
Toolbox Members every week (to do
this you do need to view every chart so
you can read the comments on the
charts). These are based on the
items in point 2 above. It is like
an ongoing tutorial to help you understand
these key indicators.
Why would I buy
shares?
This is a good question. Some people prefer to
invest money in managed funds, or directly into
property, or maybe share options or futures, or
perhaps forex (foreign exchange, currencies).
Many people keep it simple, and stick to
Australian shares - something they can relate to,
and which has some meaning for them. But before
doing this we should ask ourselves why we are
doing it, and have a sound plan.
A type of investment plan and strategy is
extremely important. There are a number of eBook
pdf
Articles on (Share Trading) strategies here.
|
Analysis? -
Fundamental, Technical, or
Funda-Technical Analysis
What type of analysis methods should we use?
Fundamental analysis? Technical analysis? or
what?
This a choice that befuddles many investors and
traders.
Don't forget that
Price charts
summarise the underlying opinions and emotions
of the market participants.
Every chart
tells a story. It pays to understand the
stories in the price charts.
See more information about fundamental analysis, technical analysis, and Funda-Technical
Analysis.
|
How to pick winning
shares/investments?
- Stick with something you know.
If you don't understand the product, then
either learn more about it, or avoid it.
- Successful
investors tend to have a specific mindset.
- Trends - If a stock's share
price is trending upwards, then riding the
trend can be useful. But if the price is
trending downwards, then why but it? On the
hope that it will stop trending down and turn
up at some point? See Trends details
below.
- For more GEMS like these, see Brainy's Share Market Gems.
- Take a look at Robert's
Weekly
Watch List - which he shares with Premium
Toolbox Members.
Trends and Shares
Classical Dow Theory states that if a
stock is trending, then the trend is in place
"until it is confirmed to have ended". There is a
Wall Street adage - "the trend is your friend".
 Learn
the characteristics of trends, and all
about how to pick an up trend. If you can
spot a trend, and ride the trend, it is possible
to be profitable.
But you need to keep a good stop-loss
in place.
See Brainy's "3Ways
Rule" for details about trends.
**
-
More trend-spotting details here.
Emotion and psychology
The day-to-day and week-to-week performance of
companies in the share market depends on the
underlying mood and sentiment of all the investors
and traders who participate in the market. When a
company's share price rockets upward, or dives
downward, it is because enough of the market
participants have a strong enough view of the
stock, or of the market generally, to cause the
share price to move. That is, the emotions and
opinions of market participants move the share
prices, and these are summarised in the price
charts.
See more details about the emotion and psychology
drivers of the share markets.
Which shares to
buy?
Some people follow fundamental analysis, and buy
shares in a company because they think they will
go up in price. But
is
this sensible?
Some people buy shares based on the price chart
alone - if the price is trending up, then they
ride the trend because "the trend is your
friend". This is based on Technical Analysis (also
known as charting). There is a long list of eBook
pdf
Articles on Technical Analysis.
And some people go for a bit of both - we call it
Funda-Technical
Analysis. The first part of this strategy is
all about choosing stocks from a list of quality
companies. Stocks with a proven history of
returning value on the shareholders equity, and
which are not over-geared, and which are also
likely to have improved earnings in the months
ahead. More information in the eBook Article ST-2300
(MA*).
Your stock universe
If you have decided to trade or invest in shares,
how do you decide which ones to focus on? This is
important because of the 2000+ shares on the
Australian market, many people decide not to buy
many of them for one reason or another. It might
be due to a lack of liquidity, or "old world"
stocks, or micro-cap stocks. Whatever the reason,
it is very useful to give this some thought.
Read
more on the "Your stock universe" web page.
Support and
resistance
The two terms support and resistance basically
refer to price levels on a price chart where the
share price has paused in the past, and where it
might be expected to pause again in the future.
These features are simply a reflection of the
views and opinions of market participants
regarding the perceived value of the company's
shares.
** - Read more here...
Exit strategies
The long-term buy-and-hold investor rarely
contemplates selling an investment position.
However, the astute investor/trader who wants to
protect capital and capture profits carefully
considers the possibilities for exit strategies,
and ruthlessly implements the chosen strategies.
**
- Read more here...
Stop
Loss! - How to minimise losses
The humble Stop Loss can help us
enormously to limit any losses, and thereby
protect our hard-earned capital. This includes the
notion of an Initial Stop, and a Trailing
Stop.
But what is this thing, and how do we calculate a
Stop Loss?
** - Read
more here...
Stock liquidity -
avoiding illiquid stocks
If you are serious about protecting profits, and
utilising techniques like a Stop Loss, then you
need to be confident that when you decide to sell
your stock there will be a buyer there to buy it.
Some stocks trade only a few times each day, or
worse still, a few times each week. This is not
the sort of stock that we want to be holding.
Learn more about stock liquidity, and what the
consistently successful traders and investors do
in this regard. See
more details here.
How to maximise
profits?
There are two opposing points of view about
profits, and how to maximise them. Some people set
a profit target which might be an arbitrary
percentage amount above the current price - say
20%. By selling out here for a profit, it is
possible to keep the profit, but potentially miss
out on a much larger profit.
Some people prefer to "let the profits run". By
maintaining a sensible Stop Loss, and monitoring
the position, it is generally safe (but not
always) to let the profits run.
Above
all - have a plan and strategy
It is very important to have a documented
investing / trading plan, and one or more
strategies.
See more
details
about plans and strategies...
|
Risk management
There are a number of important considerations
under this rather general heading to do with the
following topics:
- Money can slip away - brokerage,
commissions, slippage
- Good money management rules:
- Proportion of capital in any one position
- The 2% Rule
- Position size optimising
- Exit
strategies and Stop
loss.
See
more information about Risk management... |
Share "trader"
or share "investor"?
Are you "carrying on a business of share
trading"? (in ATO terminology)
Are you a "share trader" or a "share investor"?
This question often arises, and there is much
published on this topic. The actual and precise
distinction might get down to semantics such as
your desire to "own a part of the company", as
opposed to temporarily owning an item which you
can soon sell for a profit. Many books with
slightly differing views have been published.
Technically, a share investor typically
holds shares for a longer period of time, and pays
capital gains tax on any profit (or claims a
capital loss on losses). On the other hand, the share
trader typically holds shares for the short
term with no consideration of the impact of
capital gains, and might be happy to pay income
tax on the profits.
However, the Australian Taxation Office is the
body in Australia that will decide whether an
individual is an "investor" or a "trader", and how
any profits will be taxed (and how any losses
might be dealt with). The defining criteria
are not clear.
See the Australian Taxation Office web
site and more details with this Google search.
Online share trading and
investing
These days, trading or investing online is all the
go! But there are traps and pitfalls. Who can you
trust? See the comments at right.
Without proper preparation, the trading/investing
journey can be a very short one. Many people
embark on trading or investing with little
preparation, on the understanding that it is easy,
and that the profits will flow. But the truth is
that it is not so easy.
Proper planning and preparation includes a good
Trading Plan, and a sound and tested Trading
Strategy. Without this, you might as well be
gambling. More information about plans and
strategies is included in Robert's Articles.
Also see the section above on getting
started, and ask yourself if you are really
Share Market Ready? Take a look
at Robert's
Share-Market-Ready checklist.
Who can you trust?
While some operators are very trustworthy, there
are some who are only concerned with emptying your
wallet.
Here are some
good
questions for your financial adviser or
stock broker.
Fads will come and go, and hype will sweep through
the markets. And people will get swept up by a
range of promises. There are many claims "it's
easy", "make money in your spare time", "fulfill
your dreams".....
But, beware of the sharks in the ocean!
|
Seminars and workshops
Robert periodically runs seminars and
workshops to explain the share market
and how it works. His Share Market Secrets seminar
(aka Boot Camp) is a good
starting place. Or his Blue Chip Price Chart
Secrets seminar (aka Technical
Analysis/charting introduction).
Why does Robert run seminars and workshops for a
living?
and not stick to share trading? Here
is
the answer...
A quick word about some of the other courses and
seminars, especially the free ones. Some of these
trainers are touting a specific product, or an
expensive follow-up training course (without
naming any). So take care. By all means go along
to the free ones - nothing ventured nothing
gained.
|
More
information
Good
Books - There are many books available.
Here is a short starting list, and a plug for a
good book shop.
Robert's Share Market Gems and
cliches - Robert has compiled a list of
useful cliches and snippets of useful information
about the share market. It has taken a few years
to learn all this, but it is summarised here for
you.
How about a Sensible Approach to Sensible
Investing? Now, is that a good idea? Have
you seen a sensible approach lately?
Are you ready for the next Bear Market?
They come around faster and more often than we
care to admit. Robert has prepared some notes
entitled "Beware the Share Market Bears! -
They are never far away".
Are you Share Market Ready? Take a
look at Robert's
Share-Market-Ready checklist.
Interested in share price charts,
and how to read them?
Take a look at some charting software (like
BullCharts), or
consider learning about Technical Analysis (ie.
charting).
Also consider joining the Australian
Technical
Analysts Association (ATAA).
Interested in seeing more eBook Articles
about the Share Market, and Share Trading? Details
are
here...
Share Market Toolbox -
More
information
about Brainy's Share Market Toolbox - a great
collection of useful articles, eBooks, charts,
tools, commentary and web links to advance your
understanding of the share market, no matter
whether you are investing or trading.
How to
become a Toolbox member - Information
about how to become a Toolbox Member.
|
|
Brainy's Share
Market Toolbox - an arsenal of weapons to
help you tackle the market.