Capital Market Research and Tips

royale on 21/05/2020 - 08:58

Hello everyone,

Since the market falls during the pandemic, I have been wanting to jump into capital market investment.
As I am thinking, it is a good time to start (although probably a bit late now,not sure).
As a noob, I have been doing some research and looking for tips on where to put my investment on.
I have been reading Ozbargain forums, reddit, whirlpool, looking at commsec recommendations, scouring financial news, etc.
However, I think I need to do this in more structured way.
Hence, I am looking for some pointers on good sources I could use to be more efficient in my research.
I am hoping to get some expert advice on how to navigate this investment instrument.

Thank you so much.

PS: Since then I have purchased some units on ETFs, assuming it was among the safer investment for noobs like me.

Financial

Comments

  • Ocker on 21/05/2020 - 09:20

    What sort of instrument do you deem as being a capital market investment?

  • saintpotter on 21/05/2020 - 09:32
    +1

    Read the AFR

  • lunchbox99 on 21/05/2020 - 09:46
    +2

    You have probably already missed the largest gains. The time to buy was 2 months ago IMHO - you snooze you lose!

    Having said that, there are likely still gains to be made (or losses!), but maybe an ETF is safer if you have no idea. Also to point out the glaringly obvious, the market could still drop. Nothing is guaranteed so buyer beware.

    • raquethead111 on 21/05/2020 - 10:09
      +2

      market exuberance has largely ignored the fact that a downturn is coming. Stock market is quite optimistic that economy will recover nicely.

  • mskeggs on 21/05/2020 - 10:35
    +3

    Subscribe to the free Money magazine email newsletter, and read some back issues at the library.
    It is very good at introducing investment concepts, and will give you a foundation in the terms, language, considerations.
    Be cautious as they do follow the herd, but it is often useful to know where the herd is going.

    Once you are up to speed on the mechanics, develop your own ideas about how things will go. Do you think COVID vaccines will come early? Then Flight Centre is a steal and the banks are cheap.
    Do you think Australia will be strong in iron ore while Brazil gets smashed? The Fortescue and Rio should be on your radar.
    Will the property market come roaring back? Then McGrath might be a punt.

    This is called macro investing, where you pick trends and look at who will benefit.
    The next level is then analysing the potential investments. So in the example above, Fortescue gets all its money from iron ore, but Rio has other investments too. This magnifies the impact of iron ore prices more for FMG than Rio. Both would benefit from higher iron prices, but FMG moreso. The inverse is also true, and a drop would hurt FMG more. This is where your personal risk tolerance and investment goals come in, and in my opinion, this can’t be outsourced well.

    If you are buying an ETF, you are one step removed, and just making a bet on the whole sector (or market) that it will gain or fall. Again, this limits risk, but also upside and downsides.

    The final step is fundamental analysis, where you take your picks, then look into the business to decide if the price the market is a offering undervalues or overvalued the risks the business faces. This is much more work, but consider if it increased your returns 3% and lowered your losses the same, you might end up with twice the return of an ETF.

    • royale on 26/05/2020 - 09:17

      Hi @mskeggs - what do you think about Motley Fool? Do you think the membership subscription is a worthwhile investment? It posts lots of click-baits on many of my newsfeed. I must admit they wrote very enticing baits… :)

      Thanks again for the tips.

      • negger on 28/05/2020 - 22:01

        If Fool is the first name that comes to your mind then you have a long way to go in educating yourself.

        • royale on 29/05/2020 - 07:28

          Yes, I realised that I have a long way to go. Hence, I started this post.

          I have always been suspicious the Fool is not where I should go. Hence, I'm asking for confirmation.

          Would you mind sharing some learning and education tips and sources, please.
          Thanks for your help.

  • royale on 23/05/2020 - 18:47

    Thank you all for the tips and pointers. Really appreciate them.
    Especially @mskeggs who went all the way with great writing and examples.

    Thank you.

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