Australian Investment Education

  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 flexibility than any...

    Dominating the headlines over the past week has been the US shutdown – where federal workers have been told to stay at home – effectively on unpaid leave. The reason for this – since the end of the US financial year (30th Sept) a new budget for 2013/14 has yet to be approved and hence the current scenario. New Budget More broadly, and really beyond this article, is why the impasse on a new budget and its approval. The Republican party, who are opposed to President Obama’s Affordable Care Act, are using the current budget deadlock as an opportunity to force the President back to the negotiating table. And this is democracy in action! Having recently gone through an election here at home, we at one point looked to be falling victim to the same scenario, where the Senate and lower house were on a potentially different page. However, that now seems to have passed and as far as Australia is concerned, we are not simply open for business but things are picking u...

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  Stock markets rise and fall. But it is very rare for a singular event to cause global markets to plummet all at the same time. As global trade has become more efficient and economies become more intertwined with each other, the potential for markets to succinctly react in unison to major fundamental events, is increasingly more possible. The future for share investing will not only rely on information from the local bourse, but from major country trading partners and precedent set from key exchanges such as China, Japan, Germany and the US. Investment decisions will need to be made with a global perspective in mind. A stock market crash is very different to a Bear market, otherwise referred to as a Contracting Economy. Economies will expand and contract with cycles sometimes lasting years. More recently, the Australian economy experienced an Expanding economy between 2003 and 2008, and a Contracting economy between 2008 and 2009. Historically, there have been ver...

 I’ve seen clients makes thousands of percent on single trades. I’ve also seen clients wipe their accounts out on a single trade. The stock market is where dreams are made, and it is the hope of making money that continually drives investors to put their hard earned cash into the markets. A quote I heard a long time ago sums it up: “The stock market is the hardest way to make an easy dollar”.   Stock Market Beginners Expectations Unfortunately, most beginners have an unrealistic expectation of what is achievable. My approach is to establish a realistic expectation based on historical market performance, the amount of capital intended to be used, and the frequency the trader expects to buy and sell. From this point, I can create a benchmark of performance, and from there my goal is to outperform my expectations. Take Control of your Financial Future If you want to take control of your financial future, then you will most definitely want to consider investing in...

Over the past week, I have had the opportunity to do a road show around the country and meet a large number of fellow traders and investors. One thing that stood out, is that investors are looking for better risk adjusted returns.  Effectively, how to get an optimal return, with a more limited amount of risk in trading. Yet at the same time, many get excited about the prospect of the “home run trade” ie the goal of making big money, quickly.  With such a lofty objective comes of course risk. 80 years ago, Babe Ruth broke the record for most home runs in a season. That same year, he also broke the record for highest batting average. Sounds pretty good so far, right? There is a third record he broke that year that most people don’t know about: In 1923, Babe Ruth struck out more times than any other player in Major League Baseball – in other words also had the highest fail rate in the competition. To be able to absorb such an approach to markets requires a massi...

  Is Bitcoin the future of digital money? Global headlines tout Bitcoin as being the future for money transfers . But an electronic currency has no government control, central bank or legal regulations – reasons that are both positive and negative, depending on your point of view. Fads come and go, enticing speculators and the hopeful to invest their hard earned money. So many of these fads end up making money for the originators, but lose money for everyone else. Whether it is a Pyramid Scheme, Ponzi Scheme or Nigerian banker trying to find the heir to a massive fortune, many unwittingly naive investors end up losing money that would better be served in paying off personal debt such as mortgages or credit cards. When PayPal was first released in March 2000, at the zenith of the Tech Bubble bursting, online shopping was still in its infancy. Hackers predominantly attacked bank accounts and consumers were fearful of conducting transfers online. PayPal had been dev...