MONEY WITH JASON CUNNINGHAM

A NOVICE’S GUIDE TO SHARES Most people dream of making it rich on the stock market, but few have the knowledge to even buy their first share. Moneyman Jason Cunningham heads to the market to take the mystery out of the investing in shares, and enlists the help of expert broker Marcus Padley to get his expert tips on how to do it right.

JASON’S SHARE BASICS

When a company is put on (or lists on) the stock market, it is divided into shares, with each share representing a small percentage of that company. So when you buy a share you are buying a percentage of that company. There are only limited amount of shares, so supply and demand controls the price.

There are two ways you can make income from shares. The first is if you sell a share for a higher price than you purchased it for, which is known as ‘capital growth’, and the second is when the company’s profits or ‘dividends’ are distributed to shareholders.

A share price can be stable, not increasing a lot in value, but if they’re a highly profitable company, large dividends could well make up for the lack of capital growth. The opposite can also be true.

   

     

 

The easiest way to buy a share is to talk to your bank, as the four major banks all have their own trading platform.

Commonwealth Bank – CommSec Westpac – Westpac Online Investing NAB – nabtrade ANZ – e*trade Investing in shares has tax implications so make sure you check out the ATO website for more information. https://www.ato.gov.au/individuals/investing/investing-in-shares/

Before making any financial decision you should seek independent specific advice.

MARCUS’S TRADING TIPS  

 Marcus Padley is a stockbroker who has been advising institutional clients and a private client for over 32 years. He is the founder of the Marcus Today share market newsletter. For more information about Marcus see: http://marcustoday.com.au/

• As a beginner it’s a good idea to learn by having a try on paper first, before you invest real money. Take the 10 companies that you like or you think are growing and write down the current share price and then come back in a weeks time and you’ll notice that the price has gone up or gone down. Do this again until you get the hang of it.

• When you are ready to invest, don’t rush in. The more you invest, the more you can lose, so start small and build on that.

• Have realistic expectations. If you end the year breaking even, you’ve done well. • Research is very important, so do your homework and research a company before

you buy a stock. • Most people have gotten rich by running a successful business or investing in their

own career. So don’t give up your day job.

WEBLINKS  

Australian Stock Exchange http://www.asx.com.au/ Marcus Padley http://marcustoday.com.au/ Shares and tax https://www.ato.gov.au/individuals/investing/investing-in-shares/