Investing for beginners

Beginners guide to investing part 14: Staying the course

Beginners guide to investing part 14: Staying the course

With the rapid rise of smartphones and the internet, we are inundated with information on a daily basis. This is both a blessing and a curse.

Readily accessible information is fantastic to discover new information that will improve our lives. The problem is that we are easily distracted. I am anyway. I’m sure I’m not the only one? Echo, echo, echo.

These distractions take us away from the valuable information we should be paying attention to and […..]

Beginners guide to investing part 13: The impact of inflation and fees on returns

Beginners guide to investing part 13: The impact of inflation and fees on returns

When reviewing our investment results, all may not be as it seems. Is that 7% return, actually 7%? Not if you have left out fees and inflation in your calculations. Two small, but not insignificant considerations that can eat away at […..]

Beginners guide to investing part 12: Running the numbers

Beginners guide to investing part 12: Running the numbers

Whether you are a buy and hold investor, or a buy and sell investor you will still be interested in reviewing your stocks. It is not as simple as it first appears.

We will often receive an annual report from our stock broker or online provider of how your stocks have done that year. 5%, 9%, 2%, -5% and so on. So, if our stocks over 10 years have returned 70% in total, that is 7% per annum right? WRONG. […..]

Beginners guide to investing part 10: Timing the market

Beginners guide to investing part 10: Timing the market

Markets go up, down and sideways. Why, for how long, and when, is the big mystery. No one knows. It’s easy to say after the fact, but knowing the trigger for market changes beforehand is anyone’s guess. Strategies of trying to time the market are often […..]

Beginners guide to investing part 9: How to manage our investments

Beginners guide to investing part 9: How to manage our investments

If we are picking individual stocks then we must decide whether to pick our own stocks or have an investment manager/adviser pick them on our behalf.

self-managed portfolio has the benefit of allowing flexibility, in the sense that we get to choose every company we invest in. We also have significant cost savings, due to[…..]

Beginners guide to investing part 8: How to construct an investment portfolio

Beginners guide to investing part 8: How to construct an investment portfolio

Every investor will get things wrong. Not just once either but frequently. Heck, even full time professional investors consider 60% success rate as very good. This means that there are many professional investors hitting 50% or less. That is just as well as flipping a coin. The key to a good portfolio is […..]

Beginners guide to investing part 7: Types of stocks

Beginners guide to investing part 7: Types of stocks

So far in this series we have covered the different terminology used in investing, dispelled some common investing myths, different types of investments, how to approach the sharemarket, how to reduce our exposure to risk, and what impact our own behaviours have on our investments. Now we can discuss the different types of stocks available to invest in […..]

Beginners guide to investing part 6: Impact of our behaviours on investment returns

Beginners guide to investing part 6: Impact of our behaviours on investment returns

“The Behaviour Gap” is a fantastic book by Carl Richards. The premise is that despite knowing better, people continue to make the same mistakes over and over with their money. It is our emotions that get in the way of […..]

Beginners guide to investing part 5: Managing risk in the sharemarket

Beginners guide to investing part 5: Managing risk in the sharemarket

There are some things we can’t control when investing in the sharemarket. We can’t control interest rates, inflation, exchange rates, company bankruptcies, and so on. This is why many stay away from shares. The unknown. This is a shame, because returns from shares over the long term are arguably better than other accessible investments.

How can we reduce the risk of the unknown? […..]