Wealth Creation | Share Investing

Buying and Owning (Part 4) SHARES: Stock Market Jargon| Share Indexes| Company Analysis| Managed Funds, Index Funds and Exchange Traded Funds (ETFs)|Listed Investment Companies (LICS), and more

Updated September 2023

BiG Tips: There’s lots of jargon, a lot to learn as you try to understand buying and selling shares, watching indexes and deciding how you’ll invest in the stock market.
Because many analysts recommend, and lots of people are choosing (Exchange Traded Funds (ETFs), to start share investing, you’ll learn more on them in BiG’s blog ETFs. They’re hugely popular for getting exposure to a variety of shares, with minimal fees

Here are some basics to help you make a start:

Fundamental and Technical analysis

Choosing shares to buy, MoneySmart, ASIC

Introduction To Fundamental Analysis Investopedia

Company analysis

Four classic mistakes in company analysis, Michael Kemp
Online stockbroking scams, MoneySmart (ASIC)
How to find good growth stocks, Elite Wealth
How many stocks should you hold?, Dale Gilham

Indexes

Understanding the All Ordinaries shares index gives an investment edge, Anthony Keane, The Daily Telegraph

Managed Funds (not listed on ASX) – retail, wholesale, superannuation

Managed Funds and ETFs and Choosing a managed fund, MoneySmart (ASIC)
WHY EVERYONE SAYS ‘BUY ETFS’, Broke Girl Wealth
Passive vs active: How millennials are investing their money, Kate Cowling, Money Magazine (Aus)

Exchange Traded Funds (ETFs)

Your step-by-step guide to investing in ETFs for the first time, Money
ASX: “A Listed Investment Company (LIC) is similar to a Managed Fund. The main difference is that investors can buy and sell shares in a LIC on the Australian Securities Exchange (ASX) just like ordinary shares. Unlike ETFs that track a benchmark, LIC managers are responsible for setting the funds objectives and selecting the investments. Often managers will set investment guidelines (i.e. only invest in companies in the S&P/ASX 200) and will aim to outperform the index by using active investment strategies. LICs are “closed” investments, so unlike managed funds they don’t issue or cancel new shares as investors come and go. There’s a set number of securities issued and ASX investors transact LIC shares through their stockbroker just like ordinary shares. Fees are varied but usually higher than ETFs (~1.0% -1.5% of net assets) and it’s common to have a performance fee (~20% of any returns above the specified benchmark).”

Which ETFs Have the Highest Returns?, Canstar

Index Funds

Could Index Funds Be Worse Than Marxism? Economists and policy makers are worried that the Vanguard model of passive investment is hurting markets. Annie Lowery, The Atlantic
How to invest in Index Funds in Australia, Finder
Why is Warren Buffett making the argument for Passive Investing?, Silverlight Asset Management (USA)
4 Investing Lessons to learn from Warren Buffet, The Motley Fool

Listed Investment Companies (LICs)

MoneySmart (ASIC) Listed Investment Companies “Decide whether a listed investment company or trust is right for you”
ASX LICs

Property Trusts – Listed (REITs)

MoneySmart (ASIC) REITs
Australian REITs ASX A-REITs

CFDs

CFDs MoneySmart (ASIC)

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