Investing

I was watching local Australian TV the other day and I cringed when I heard saw an advertisement for investment properties and this voice over stated:

xxx returned 109% over three years for their investors – try to match that with a bank.

Read the rest of "Unrealistic Returns and Benchmarks"...

Who looks after whose interests? Greed and fear runs the markets, do they operate on the CEO too? Mark Cuban, a self made billionaire - rarely heard about in Australia, but nonetheless, being a billionaire has earned a little of my respect revealed some of his views recently about the disconnect between the CEO and shareholders. Can shareholders safely assume that the company CEO is working towards the shareholders' interests? In the view of the billionaire who made his cash on the back of dot com success and now owns the Mavericks NBA basketball team, there is a conflict in today's CEOs intentions that may harm the shareholder's bottom line.

I received an offer to join the Capital Japan Fund from CommSec. The promotional sheet says: "Japan is not only the world's second-largest economy - it's also home to leading global companies like Toyota, Canon, Sony and Nissan. But it hasn't always been easy for Australian investors to take advantage of Japan's growth opportunities. Which stocks should I choose? What about foreign exchange? And is my investment capital safe? These are some of the doubts that have stopped Australians from investing in Japan." I'm not an investor, so I don't know if this would be a good place to park your cash. I'm not - but for others it may be an opportunity to consider. But there is an indication that the Japanese market is on the path to recovery. This recovery path may uncover new trading opportunities.

I like trading, because I can make a decent living out of it. But although money can come easy through trading after some hard work learning how to trade and planning and executing your trading plans you hear the odd story of how investment is way better than trading actively. There was a stock that in the last three years that would have allowed you to grow an initial $1000 investment into $131,666 or alternatively if you picked the "other stock" you would have earned $107,432 in three years by simply sitting on your hands. No trading plans, no time going in and out of trades as well as analysing them. the two stocks? Uranium explorer Paladin and Fortescue Metals. Rise in price had been fuelled by sheer growth as neither pays dividends.

Quite a few people have asked me why the public can't buy stock direct from the issuing company? Why does it have to be done through a stock broker?

Basically companies create stock to raise capital for their business to reinvest into a project or plan. So the shares they create exist in the market for the public to trade - buy and sell. When the company wishes to raise more capital it may decide to issue more shares. So the number of shares on issue are limited in number.