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How to buy stocks in the Australian stock market

March 7, 2021 by Reporter Leave a Comment

The current stock market is in turmoil with a lot of volatility in share prices here in Australia, however there is a growing number of people who think getting in now could be profitable for them in the long term. So how do you get into the stock market ? How do you buy shares to take advantage of the current stock market tumble.

There are two different ways that you can get into the stock market and buy and sell shares

1. Sign up with bank share trading account that allows you to buy and sells shares

2. Sign up with a stock broker that specifically allows you to buy and sell shares.

There are other ways to buy shares like buying a bunch of blue-chip stocks or buying an ETF (which is also buying a bunch of shares) – but we will come to that later.

Banks as a stock trading buy and sell platform

Most big banks allow you to sign up with them for a stock trading account so that you can buy and sell shares. If you are already signed up with one of them, just enquire with them. Here is a list of banks that facilitate stock trading

1. Commonwealth bank ( Comsec – their share trading platform)

2. National Australia Bank ( Nabtrade – their share trading platform)

Below we give you further details about brokerage fees these bank charge and also prices for some popular dedicated share trading platforms.

How much money do I need to start trading the stock market?

Technically, there’s no minimum amount of money needed to start investing in stocks. But you probably need at least $500 — $2,000 to really get started right.

How do I make money in the stock market?

There are many ways to make money in the stock market, however the most simple method to understand this is when you buy a share today that cost you $500 , but its worth tomorrow is $600 and so you sold it – then you just made $100

To break that into much more realistic detail and give you an example

Eg. Say you got $500 to invest

Westpac bank shares are $15 each today, so you bought 32 Westpac shares

32 Westpac shares X $15= $480 + (add $10 bank fees for buying)

Total cost is $490 to buy the shares

Three days later (or six months later), there is a bit of recovery and Westpac share price rises and is $20 each share.

You had bought $32 shares earlier; you sell it today for $20 (that’s a $5 increase in the share price)

32 shares x $20 =$640 – $10 bank fees

You have $630 from your sell

Sell price $630 – Bought price $490 = Your profit $140

The bank does not charge you anything for holding the shares, but charge you for each buy and sell, which bring us to our next point -broker fees.

Now say if that investment was $5000 instead of $500 your profit could be $740 in one trade

How much does it cost me to buy and sell shares?

Every broker and every bank have different set of prices for buying and selling shares. It really comes down to ease of use, broker fees and availability of stocks to trade on each platform. Here is short comparison of some top bank and broker fees

Share trading fees – Banks

Commonwealth Bank – Comsec Fees:

For shares under $1000 in value – $10 each transaction

For trades between $1,000 and $10,000 – $19.95 each transaction

This is called the brokerage fee

Website https://www.commsec.com.au/support/rates-and-fees.html

National Australia Bank – Nabtrade Fees:

Up to and including $5,000 – $14.95 each transaction

From trades between $5,000.01 – $20,000 – $19.95 each transaction

Website https://www.nabtrade.com.au/investor/pricing

Share trading fees – Brokers

Two popular brokers apart from Banks are Self wealth and Ig markets. They both allow trading in Australian stocks as well as international stocks and CFD.

Self-wealth trading fees:

Brokerage fee for every trade, regardless of size – flat $9.50 (Only Australian Shares)

Website https://www.selfwealth.com.au/online-trading/

IG markets Trading fees:

Trading Australian shares – $8 per trade or 0.1% whichever is higher

For US markets – US$10, or 2 cents per share

Website:https://www.ig.com/au/charges

With IG markets you can do Australian and US stock market trading and also trade in CFD’s for which you have to sign up separately with them.

Other share trading platforms worth mentioning are ANZ share trading, Bell Direct and CMC markets.

Other new low brokerage share trading platforms introduced lately is superhero, Raiz & Comsec pocket.

Most banks and stock trading brokers provide additional data and tools for company and stock analysis, creating watchlists, setting price alerts, creating specific set price buys and more. Features offered can differ from platform to platform.

With Comsec and Self wealth – All trades are CHESS sponsored

There are two ways for shares to be held:

CHESS Sponsored Shares – Shares that are registered with a stock broker (CommSec or another broker). CHESS Sponsored Shares are allocated a Holder Identification Number (HIN) by the broker.

Issuer Sponsored Shares – Shares that are managed by the issuer of those shares via the issuer’s Share Registry. Issuer Sponsored Shares can be traded through any broker, providing conditions set out by that broker are met. Issuer Sponsored Shares are allocated a Security Reference Number (SRN).

In reality it does not make much difference to your trading profit, if it is chess sponsored or issuer sponsored.

Risky Stock Trading with penny stocks

There is a difference between big companies and small companies (smallcaps) and with small companies come more risk in comparison with blue chip stocks like BHP, Westpac.

Some traders can get lucky and pick a small company stock that can become a winner.

Take for example FMG – Fortescue Metals Group (iron ore miner)

This stock was once trading for between $2 and $3 – Today the price is $10

Say you dropped $5000 when it was $2, so you got 2500 shares of FMG

You sold it when it reached $10 today x 2500 shares=$25,000

You just made $25,000 from $5,000, however this is very rare- though people have gotten lucky with their stock picks and made money.

FMG was once a small cap with lot of debt and considered risky, but now they have paid up their debts and are considered much safer than they were before.

ETF’s

Another popular method of buying into shares right now is called ETF’s . With buying an ETF you have options like buying into a group of shares where you can also invest by putting money in a regular basis as low as $50 a month/week. Some providers/brokers also allow you to invest in ASX 50 or a lumpsum into a group of blue chip stocks.

ETF’s are available through bank trading platforms

Learning how to trade the stock markets is essential, before you decide to have a punt on your hard-earned money.

The stock market can make you money, but it can also take your money and put you at a loss. Doing dummy trading, joining stock trading groups and researching companies for three to six months is a good idea before jumping right in. Good luck!

Article written by Jeff – I blog about stock trading – Check my stock market blog over here

Is it the end of pay day loans in Australia

November 10, 2016 by Reporter Leave a Comment

Payday loans, which is a popular concept in the USA now has a flourishing and growing industry in Australia. It has grown in popularity in recent times in the US due to the failing economy and jobs situation in United States. In Australia recent job losses with the downturn in mining industry, random corporate job cuts and poor financial management has led to a growth in pay day loan companies.

There has been a spurt in growth of online payday loan companies that lend based on people filling in forms online and getting a loan with ease. These companies have got millions of dollars in loan books and are now coming under scrutiny for unfair lending practices by the regulatory body(ASIC).

The loan market for small loans or micro loans (payday loans) has gained notoriety not only in the Australia market, which is more recent, but has come into regulators scrutiny in many other countries like India and US and New zealand.

This market caters to people who are in desperate need of money and who most of the times are already in financial strife. Lending to such a group becomes a tricky situation where lending companies needs to grow their loan books, yet can’t really take undue advantage of the person’s poor financial position. Lending to them can put them at more risk and put them customers in more strife.

The question of balancing responsible lending and growing your business at the same time is a very fine line in this niche and local micro lending companies like cash converters and nimble have been taken up by ASIC for not being upto scratch on their lending practices.

Recently, following an ASIC investigation, payday lender Cash Converters (online website at www.cashconverters.com.au ) will refund $10.8 million to consumers who received small amount loans under approximately 118,000 small amount credit contracts. Cash Converters has paid a $1.35 million penalty following the issuing of infringement notices by ASIC.

ASIC had concerns that Cash Converters did not take reasonable steps to verify consumers’ expenses in accordance with its responsible lending obligations and subsequently entered into them in breach of the credit legislation.

Many customers of Cash Converters Loans may be eligible for a refund

· Refund eligible consumers $10.8 million in fees through a consumer remediation program overseen by an independent expert who will report to ASIC; and

Consumers who had two or more small amount loans in the 90 days before taking out another small amount loan through Cash Converters’ website during the period 1 July 2013 to 1 June 2016 should expect to be contacted in due course with information about their refund.

If you think you may have entered into a loan contract with Cash Converters (either in-store or online) that was unsuitable, you are encouraged to lodge a complaint with the Credit and Investments Ombudsman. If you need help lodging a complaint with the CIO, you can talk to a free and independent financial counsellor by ringing 1800 007 007 during business hours.

ASIC’s MoneySmart website has useful guidance on how payday loans work and alternative credit options.

Prepaid Credit Cards – A Better Alternative To Credit Cards?

February 27, 2014 by Reporter Leave a Comment

Prepaid credit cards are becoming more popular and as they offer a lot of advantages over traditional credit cards. There is a level of convenience that is hard to beat when using a prepaid credit card. Using these prepaid services allows the card holder to set their own limits. If they want to go out but only spend a certain amount of money they can just put that amount on their card, can’t spend it if it isn’t on the prepaid card.

Credit card – Prepaid Cr card vs Credit card

A prepaid credit card is refillable, so there is not a need to have to remember a new PIN (personal identification number) every time the card is refilled. For many of these cards adding funds to them is as simple as going to a retail store or reloading them online. These cards can be used everywhere that a Master Card or Visa can be used. There are many people who use these cards to make a purchase online when they do not want to use their personal debit cards due to a worry about security. If you are interested in you can register for a Citibank prepaid card here.

Prepaid credit cards are also a good way to give kids money as gifts. Online shopping isn’t only popular with adults; there are also many kids who with their parent’s supervision are also buying online. Many stores are starting to carry a limited inventory in the store itself but have shipping warehouses that carry a much wider selection of items. Online shopping may offer items and deals that cannot be found in a store, but the most convenient way to shop on line is with some form of credit card.

If the prepaid card information gets taken by an identity thief while shopping online the most they can get is what the card has on it for funding. This is an advantage over a traditional credit card or a debit card from a bank. If either of those where to end up in the hands of an identity thief they could run up very costly charges before the owner even realized that their card had been taken.

The advantages of using a citi prepaid credit card are numerous. These cards allow the holder the ability to run a tight budget, by only putting enough funding on them to cover expenses such as rent, gas or money to go back and forth to work. Being able to load only what funding is needed on these cards means that there will not be any extra spending like there can be when using a card that bills you after it has been used. When using this type of card you are actually paying in advance for things that you will use in the future. Using these types of cards may help the user to see exactly where they are spending money and how they can change their habits if they need to.

Bank profit reporting season 2012 –Figures

November 6, 2012 by Reporter Leave a Comment

The big four banks commonwealth bank, Westpac, ANZ and NAB have got a collective annual profit of $22.8 billion

Last year the combined net profit for all four banks were $24 billion, so there was slight drop in profit this year.

2012 bank profits Australia

Westpac – Full year net profit $5.97 billion

Commonwealth bank – $7.09 billion net profit

NAB – Full year net profit $4.08 billion

ANZ – $5.66 billion profit

Simple Guide in Opening a Cyprus Bank Account

June 27, 2012 by Reporter 1 Comment

Opening a Cyprus bank account is very simple. However, if you are planning to set-up a corporate bank account then you may wish to consider hiring the assistance of partner agents knowledgeable in this field. It will make the submission of the required documents easier and more convenient. It may even free you from the hassle of having to physical appear in the presence of bank officials as part of their screening process.

Step One: Selecting a Cypriot Bank

You should select the best Cypriot banks that will cater to your needs. There are plenty of banks offering their services in Cyprus, so it is best to get as much information from these banks before considering them. It is best to look at their rates and the fees they charge for international money transfers, personal accounts, and overdrafts because these are most likely the same type of services you will be using in your corporate account.

Step Two: Fulfilling the Documents

Cypriot bank accounts strictly follow the EU directive against the tolerance for illegal banking practices. Therefore, corporate accounts are expected to submit the following documents in adherence to this regulation.

1.    a certified proof of identification from the applicant, which covers the owners, the directors, and other members of the company or organization
2.    professional reference, which comes from a different bank
3.    proof of residence for all the members, owners, and directors of the company or organization, which includes credit card statement, original bank statement, or anything similar to these
4.    detailed description of the Cypriot company’s proposal for business activities, which includes its geographical reach, PR material, investments, certified evidence of source of funds, contracts, and business marketing materials
5.    initial meeting according to the preference of the bank officials

Step Three: Initializing the Bank Processes

You may request the processing of your bank account registration even if you are not yet in Cyprus. You can make a bank account order online through most banks and submit your payment in EURO. You will then receive bank applications that can be filled out online. Simply post it back to the bank together with copies of your passport and other documents. The bank will then send feedback on other requirements, which may be necessary for you to complete the initial bank transaction. If necessary, then you may need to submit notarized copies of the documents. Therefore, it is wise to have a partner agent that will submit all of these documents in preparation for your arrival and authentication of the information. Once approved, you can then grant them instruction to deposit the required amount to activate it.

Estimated Fees

Opening a Cyprus bank account is not free from necessary fees, however it only minimal. Internet banking may go as low as EURO 350 or USD $450; offshore bank account is EURO 750 or USD 1,030, and bank accounts with no relation to a company is EURO 350 or USD 615. This may vary depending on your choice of bank and hired partner agent that will process your documents. In any case, it is best to consider the services of certified and highly reputable organizations for a guaranteed Cyprus bank account in a matter of days.

This is guest post by a contributor

Australian Banks Half yearly reporting

May 2, 2012 by Reporter Leave a Comment

The banks have been doing good business, here are the half yearly profit and loss reports for the big four banks here in Australia, Westpac , NAB, CommBank and ANZ.

Reporting season – Bank profits Australia

Westpac 2012 | $3.209 Billion | May 3, Half year profit reporting
WESTPAC CEO – Gail kelly
Australia’s very own Gail Kelly has joined the ranks of Oprah Winfrey and Lady Gaga on Forbes magazine’s list of the world’s ten most powerful women.

Top banks australia Profit reporting 2012

NAB 2012 | $2.828 Billion | May 10, Half year profit

NAB CEO – Cameron ClyneNAB Chief executive Cameron Clyne reciived more than $1000 and hour in pay and perks last year according to media reports

ANZ 2012 | $2.925 Billion | May 2, Half year profit

ANZ CEO – Philip Chronican is Chief Executive Officer, Australia.
Philip oversees the Australian geography and is specifically responsible for the bank’s retail and commercial business and customers in Australia, as well as leading ANZ’s retail segment on a global basis

Commonwealth 2012 | $3.649 Billion | August, Half year profit
Commonwealth Bank – CEO Ian Narev
Ian Narev says CBA will step up its rollout of branches in Indonesia and China

POLITICS OF A RATE CUT

February 7, 2012 by Reporter Leave a Comment

Damned if you do , Damned if you don’t, pardon my English but that seems to be the situation with rate cuts , RBA and banks.

RBA today kept the cash rate on hold with no changes to stay at 4.25 per cent

The politics of rate cuts ,Banks and Media bashing

The situation is getting out of hand come every time when the RBA has to make a announcement for rates to increase or decrease. ITs become a big media circus come every rate announcement by the RBA , Banks get thrashed even before a rate announcement is made and held guilty , analysts and economists have a hey day predicting what they think will happen , and the media adds to the frenzy by amplifying all the news with wicked twists to their benefit having a go at banks, Lenders and raising a ruckus giving banks much negative publicity .

Luckily punters took a sigh of relief this time, as they was no rate increase.. but nor did people get a discount as well. The RBA did not heed any economists prediction or media hearsay and chose to do what they though was right and let the rates stay the same

RATE Stays Put while banks stay neutral

The rates staying the same has put the banks in a bit of a predicament, while they raised the gauntlet last time (ANZ) saying they will wait a bit before they decide how they react to the rate announcement . RBA by not changing the rates have not given them an excuse anyway. Its is going to be a tricky situation for the banks , because the first bank to pass on a decrease always sticks in the mind of the consumer as a good bank.

The waiting game if pursued by the banks could be the difference between good PR and Bad PR for the Bank. . So we will wait for the next rate announcement . Until then good luck for the next rates announcement by the RBA.

Predictions by media

February 07 –

Reserve Bank is tipped to cut the official cash rate to 4 per cent today _ Herald sun

Reserve Bank board meets this morning in Sydney to consider whether to cut the official cash rate a further 0.25 points to 4 per cent- theage.com.au

The Reserve Bank of Australia is tipped to cut the official cash rate to 4 per cent at 2pm today.- http://www.theaustralian.com.au

Punters believe Reserve Bank will cut, but banks won’t pass on in full – www.news.com.au/my

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How to buy stocks in the Australian stock market