Many women who consider the stock market are immediately put off by the incomprehensible financial jargon. There’s also the old fashioned image of a testosterone charged mob of brokers, yelling frantically and waving sheets of paper at each other. We’ve all heard the horror stories of stock market crashes and read headlines about millions of dollars being wiped off share prices in a single afternoon. The popular perception of the stock exchange is a financial jungle inhabited by predators like Gordon Gekko, where only financial geniuses and compulsive risk-takers can survive.The reality of the modern Australian Securities Exchange (ASX) is very different.
All you really need to invest successfully on the ASX is common sense, patience and clear goals.
It also pays to do your homework and develop some solid financial background knowledge. You don’t need a degree in economics, nor do you need to be glued to financial reports 24 hours a day – but you do need a basic understanding of the markets. Fortunately that’s not hard to obtain, there’s a wealth of reading material and online resources available even for absolute beginners.
At its simplest, companies issue shares to raise money. The money might be for expansion, or investment in new technology, or to acquire a rival company. If the company prospers, the share prices rise.
Some companies also issue twice yearly dividends on shares – a form of payment to the shareholder. An additional benefit is the process of dividend franking which allows you a tax rebate on your dividends. A basic understanding of the markets allows investors to spot companies that have potential for growth, or are likely to yield a steady profit. Shares that rise in value can be sold for a profit and dividends can be spent or reinvested. While there is a risk, there are also great opportunities for people willing to invest wisely. An increasingly popular form of investment is binary options trading that allows traders to speculate on the movement of share prices, rather than by buying the shares. The biggest advantage is a fixed profit and a predetermined time scale. Traders can utilise modern online trading platforms from their own computer or cell phone 24 hours a day, and don’t need to deal through a traditional broker.
Two terms that are often heard in news reports are the All Ordinaries Index (All Ords) and ASX200. These are indices that allow Australians to measure the overall performance of the stock market.
All Ords measures the moves in the combined market value of the nation’s top 500 listed companies. The ASX200 measures the movement of the 200 biggest companies on the Australian stock market. If for example the ASX200 rises by 1% it means that the combined value of the 200 top companies has increased by 1%. This is a quick and easy way to monitor general market trends. The ASX and binary options are a potentially lucrative investment opportunity for women who are prepared to do some basic research and take calculated risks. Binary options traders can quickly expand their investments to include indices, commodities and currency trading. The potential rewards are much higher than many other forms of investment and taking the time to monitor world events and market forces allows a high level of risk management. These options are probably the safest introduction to all of the financial markets, and come with all the tools for a rapid and thorough understanding of the investment world.