Australian Investment Education

Market Trend, The trend is only your friend if you are in the market! Over the course of a trading week, there is a huge amount of data that flows around, most of it relevant in some context, some more important than other for stock market investing.  Two things that captured my attention last night was the move down in iron ore prices and the move up in the US market – opposite indicators, yet both seem to be having a similar effect!  The rising US market is making people nervous (albeit not the US consumer, who seems to be out in force) as is the drop in iron ore prices. Let’s start by looking at the US – the world’s largest economy.  The Dow Jones index has continued its longest rally since 1996.  What that means, folks, is the stock market is going up.  However, how many out there remain unconvinced, arms folded and are wearing their Bearskin hats? The thought of “better get out now, before it collapses!!” mindset reminds me of a form...

Over the hundreds if not now, thousands of presentations I have done around the World, the understanding of what is risk, versus what people think it is, has been a central theme to almost each and every one and in particular when it comes to Options Trading Strategies. Earlier today, I did an interview with a finance journalist from the Straits Times, the major newspaper in Singapore and Malaysia. I have got to know the journalist quite well, over the past few years, as we have been busy in Asia and as I type, I am flying up there to host an Options trading Strategies event. One of the central themes to the interview was the common misperception out there that “Options are Risky!” and over the course of the interview, I set out the case for what proved to be the actual opposite. Options are flexible One of my senior traders was quoted not so long back as saying “options are the thinking man’s derivative” and this is a great truism. Options offer more flexibilit...

Crude Oil – you won’t believe what’s going on behind the world’s most heavily traded commodity Many investors miss out on the benefits of diversification and – for want of a better description, the pureness of taking a trade which “invests at the source”. What we mean by this; is that if you have a view on oil, why buy oil shares when you can trade the commodity itself? Pure exposure to oil price moves, not the messy performance of the company’s share price. Is this a new norm? After a period of sustained price pressure – as a result of the push in global economic growth, demand has slackened a touch and production increased. New sources – not discovery – but sources such as the fracking industry have contributed to a push higher in production, although one area which has many investors scratching their heads, is OPEC. With prices coming off sharply, OPEC has continued to “pump”, adding to the weight on crude’s price. In fact, production has actually increas...