The Bulls and Bears have been battling it out!

DON’T MAKE THESE MISTAKES…

1) Purchasing small lots in multiple companies.

You need to be aware that every time you place an order it is going to cost you $20 and every time you sell it is going to cost you $20.

Let’s take a look at the difference between buying 5 companies compared to buying 15 companies using $50,000. If you purchased 5 companies at approximately $12,500 each, that is $125 in brokerage when you buy… and another $125 if you sell. (If the value of the trade is over $10,000 then brokerage will be 0.2% of the trade value.)

Whereas if you purchase 15 companies investing around $3,000 in each, this equals to $300 dollars in brokerage and another $300 when you sell. It makes it so much harder to make up the brokerage difference before you are into profit.

2) Thinking the ‘limit order’ is a stop loss.

It is important to understand that when selling, the ‘limit order’ in the Challenge is not a stop loss feature. With a limit order, if you set your limit to sell your shares at $2.00 they will sell for $2.00 or more. If the market price is below that price then your order will not be executed.

Also we get players wondering wonder why their order hasn’t been processed, often this is because their limit order to buy or sell is too far away from the current market price.

3) When using the Challenge falling sell (stop loss), setting the trigger and the limit too close together.

If the market is falling very quickly the wider the range between the trigger and the limit, the greater the chance your order will be executed. If they are too close, your falling sell order may not get processed as the market jumps down and opens up below your limit.

Also don’t forget…if you do not cancel your falling sell order and the market begins to recover, once it reaches your limit price or up to your trigger price, the order to sell will be processed at the first opportunity between the limit and the trigger price. For more on using a falling sell go here.

4) Placing an order at 4pm for the next day.

Be aware that normal trading hours are between 10am and 4pm. However, orders may still be processed between 4pm and 4.12 pm as there is a final closing period over this time.

If you are looking to place an order for the next day, it would be best to do this after 4.12 pm.

5) Not checking your order.

It’s important to set up the habit of always checking your order before you submit. Make yourself stop and read the preview order. Get into the habit of checking the full order because once your trade is submitted, it is very difficult to get it back.

Watch: What is the sharemarket?

WHY INVEST IN SHARES?

People invest in shares with the objective of generating wealth – either through potential share price growth, via income paid as dividends or a combination of both.

Shares are bought and sold on ASX’s market and investing in shares can have many financial benefits over the long term. Shares are also easy to trade and investors don’t need to invest large sums to get started in the market.

Research carried out by ASX and Russell Investments shows that over the long-term, shares achieve one of the highest rates of return out of all investment types. However, as with any investment, shares also carry risk and investors need to inform themselves of these – including the fact that the value of shares can decrease and the rate of return may not meet expectations.

STRATEGIES TO SUIT YOU

Shares allow investors with different goals to pursue different investment strategies. One of the main strategies is to invest for ‘growth’ – where you benefit from any increase in value of the shares you own. A second strategy is to invest in shares for ‘income’ – where any dividends you receive provide an income stream.

SO WHAT IS A SHARE?

• A share represents a part ownership in a business.
• The more profitable that business is, the more valuable the shares of the business become.
• Shares are a way to trade a stake in that business with other people.

And when it comes to buying and selling shares the share market is just like a fish market, a fruit market or a cattle market! It is a place where buyers and sellers come together to work out a price for something by bidding for it.

FINANCIAL FREEDOM – WHAT DOES IT ALL MEAN?

Have you ever thought about what financial freedom really means? And what it means to you? In reality it means so much more than just having lots of money. Real financial freedom is about being able to choose the life you want to live….not living a life that you have to live.

A lot of us, in particular women,  lose this perspective when it comes to living their lives because they  become so committed to playing the various roles of carers, spouses, parents and employees. Real financial freedom means leaving behind the limiting expectations and beliefs that have held us back, recognising that we need to have a positive relationship with money, and then embarking a journey of discovery, education and growth in order to build that relationship so that it is strong and rewarding.

When you  gain control of your financial life, and free yourself of the stress that can burden you, you  find that many more options and possibilities open up in your life. With this new focus, strength and understanding the rewards of being financially free will finally let you live the life that you choose. Your Best life.

We believe that financial advice is for everyone.

No matter what stage you are in life, receiving sound financial advice can make a huge difference.

Financial Planning is the process of meeting your Life Goals through the proper management of your Finances. Your Life Goals could include managing debts, buying a home, travelling, saving for children’s education or planning for your retirement.

Good financial advice from an experienced qualified adviser:

• helps you make the most of what you have and maximise your situation;
• supports you in setting your goals and aligning your finances in the right way to move forward & allow you to achieve your goals;
• gives you peace of mind.

Start taking the first steps towards your financial freedom. Call Moneywise Global today on 1300 728 249 to book your appointment with one of our expert financial advisers.