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KNOW YOURSELF
"Rule #1: Never lose money.
Rule #2: Never forget rule #1″
- Warren BuffettBefore you open a brokerage account, before you put one dollar in the market, before you even try and learn any jargon I want you to take a good long hard look at yourself. I don’t know how you’ve come to this site. I don’t know your circumstances. I have no idea if you’re even up to the task. What I do know is that investing directly in shares is much harder than you think. If you’re new to the share market please understand this now. The floor of the exchange is littered with the empty wallets of people who thought they could get rich quick.
This is the very first and very tiny step on a long journey. Understand who you are. Are you going actually interested in learning all about shares, studying balance sheets, reading research reports, understanding technical and fundamental analysis. Or should you simply purchase index base ETFs, contribute regularly and let compounding work it’s magic over 10 years plus.
I’ve made a lot of mistakes myself. I wish someone had taken me by the scruff of the neck and made me take a good, long, hard look at myself. I only found out by making a podcast, speaking with experts and acknowledging my mistakes.
Forget about getting rich quick. There are plenty of services that make promises. Some are great, some are only interested in taking your money. The best ones will require you to do a lot of hard work to learn a methodology. That’s the key. Learning takes time and effort.
Trading in shares is like learning a language. It’s not something will happen overnight.
SOME MYTHS ABOUT INVESTING
- It takes a lot of money to buy shares. There's now an incredible range of apps and websites that allow you to start with even the smallest amount of money. You don't have to wait on the sidelines until you have a large sum to invest
- You have to be good at picking stocks. It's not about picking a single winning company. It's about having a diversified portfolio
- It takes a lot of time to research. You only need to research as much as your interest takes you. Buy index ETFs if you don't like research. But you might catch the bug and actually enjoy putting in some time and effort to optimise your portfolio.
- The share market is too risky. You can't ignore the benefits of buying and holding a diversified range of companies for the long term. It's all about long-term thinking
Key takeaway: patience, diversification and the power of compounding will help your returns in the long term.
THINGS TO THINK ABOUT WHEN STARTING TO INVEST
- Start now. The sooner you start, even if it's only with $5, the sooner you start learning and compounding.
- Plan your finances. Write down your current financial situation and list your goals. Do you have an emergency fund? Are you saving to buy a property? Are you starting a business or a family? Draft a realistic plan with clear steps that you will need to take to reach your financial goals.
- What is your risk tolerance? See the section about risk below. Do you think you will be able to sleep at night when the market makes one of it's inevitable plunges? Are you a long-term investor until everyone starts running for the exits?
- Understand diversification. You must learn about industry sectors and asset classes so that you can attain true diversification in your portfolio.
- Stand by to do nothing. Do your homework, diversify your portfolio, think long-term, and review quarterly. Trying to time the market will only lead to stress and burnout.
- Reduce your fees. Fees compound - take them into account when you are setting up a brokerage account or investing with an app.
- Check your super. Study your super and how your money is invested. It will help you learn about your own investing, whether you have chosen the right options and help you to consider your overall diversification.
Doing well with money has a little to do with how smart you are and a lot to do with how you behave. - Morgan Housel.
WHAT IS RISK?
Rewards are directly tied to risk. Cash in the bank carries very little risk but you don't get much back in the way of interest. Speculative mining stocks can generate fantastic returns but carry a lot of risk. Most will do nothing or disappear without a trace.
A key point to understand is the difference between an investor and a trader. A trader is looking for short-term gains. They are not interested in dividends. The trade of is usually short term often very short term. While the investor is interested in both capital gains and dividends. The holding time for investor is longer, certainly longer than weeks and months. It's maybe years or forever in the case of a buy and hold investor. And you can be both a trader and the investor.
"Each person has to play the game that takes into account his own psychology. If losses are going to make you miserable – and some losses are inevitable – you might be wise to utilise very conservative patterns of investment and saving all your life. So you have to adapt your strategy to your own nature and your own talents. I don’t think there’s a one-size-fits-all investment strategy that I can give you.”
- Charlie Munger, 1998, answering, "How do you learn to be a great investor?"Treat your portfolio like a garden
Australian Shareholders' Association is a fantastic organisation that advocates on behalf of retail shareholders and provides a ton of great information for learning. They also hold member meetings where investors share their experience and opinions about the many companies available on the ASX.
I was struck by a comment from a member who said: "Treat your portfolio like a garden" When I asked her what that meant she said to leave it alone to grow, pruning and weeding once a year.
That was a light bulb moment for me. I was too focussed on taking short term gains and locking in losses unnecessarily.
"An investment in knowledge pays the best interest." - Benjamin Franklin
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Terms & Conditions
TERMS AND CONDITIONS OF USE
Last updated: July , 2021
1. About the Website
(a) Welcome to www.sharesforbeginners.com ('Website'). The Website provides education and entertainment around share investing.
(b) The Website is operated by Shares For Beginners (ABN 95722606452). Access to and use of the Website, or any of its associated Products or Services, is provided by Shares For Beginners. Please read these terms and conditions ('Terms') carefully. By using, browsing and/or reading the Website, this signifies that you have read, understood and agree to be bound by the Terms. If you do not agree with the Terms, you must cease usage of the Website, or any of Services, immediately.
(c) Shares For Beginners reserves the right to review and change any of the Terms by updating this page at its sole discretion. When Shares For Beginners updates the Terms, it will use reasonable endeavours to provide you with notice of updates to the Terms. Any changes to the Terms take immediate effect from the date of their publication. Before you continue, we recommend you keep a copy of the Terms for your records.
2. Acceptance of the Terms
You accept the Terms by remaining on the Website.
3. Copyright and Intellectual Property
(a) The Website, the content and all of the related products of Shares For Beginners are subject to copyright. The material on the Website is protected by copyright under the laws of Australia and through international treaties. Unless otherwise indicated, all rights (including copyright) in the content and compilation of the Website (including but not limited to text, graphics, logos, button icons, video images, audio clips, Website, code, scripts, design elements and interactive features) or the content are owned or controlled for these purposes, and are reserved by Shares For Beginners or its contributors.
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(i) use the Website pursuant to the Terms;
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(c) Shares For Beginners retains all rights, title and interest in and to the Website and all related content. Nothing you do on or in relation to the Website will transfer any: to you.
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(iii) a thing, system or process that is the subject of a patent, registered design or copyright (or an adaptation or modification of such a thing, system or process),
to you.
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Shares For Beginners takes your privacy seriously and any information provided through your use of the Website and/or content are subject to Shares For Beginners' Privacy Policy, which is available on the Website.
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(a) Nothing in the Terms limits or excludes any guarantees, warranties, representations or conditions implied or imposed by law, including the Australian Consumer Law (or any liability under them) which by law may not be limited or excluded.
(b) Subject to this clause 5, and to the extent permitted by law:
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(c) Use of the Website and the content is at your own risk. Everything on the Website and the content is provided to you "as is" and "as available" without warranty or condition of any kind. None of the affiliates, directors, officers, employees, agents, contributors and licensors of Shares For Beginners make any express or implied representation or warranty about the content or any products or content (including the products or content of Shares For Beginners) referred to on the Website. This includes (but is not restricted to) loss or damage you might suffer as a result of any of the following:
(i) failure of performance, error, omission, interruption, deletion, defect, failure to correct defects, delay in operation or transmission, computer virus or other harmful component, loss of data, communication line failure, unlawful third party conduct, or theft, destruction, alteration or unauthorised access to records;
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(iii) costs incurred as a result of you using the Website, the content or any of the products of Shares For Beginners; and
(iv) the content or operation in respect to links which are provided for your convenience.
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(b) Shares For Beginners may at any time, terminate the Terms with you if:
(i) you have breached any provision of the Terms or intend to breach any provision;
(ii) Shares For Beginners is required to do so by law;
(iii) Shares For Beginners is transitioning to no longer providing the Services to Members in the country in which you are resident or from which you use the service; or
(iv) the provision of the Services to you by Shares For Beginners, is in the opinion of Shares For Beginners, no longer commercially viable.
(c) Subject to local applicable laws, Shares For Beginners reserves the right to discontinue or cancel your access at any time and may suspend or deny, in its sole discretion, your access to all or any portion of the Website or the Services without notice if you breach any provision of the Terms or any applicable law or if your conduct impacts Shares For Beginners' name or reputation or violates the rights of those of another party.
(d) When the Terms come to an end, all of the legal rights, obligations and liabilities that you and Shares For Beginners have benefitted from, been subject to (or which have accrued over time whilst the Terms have been in force) or which are expressed to continue indefinitely, shall be unaffected by this cessation, and the provisions of this clause shall continue to apply to such rights, obligations and liabilities indefinitely.
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9.1 Compulsory:
If a dispute arises out of or relates to the Terms, either party may not commence any Tribunal or Court proceedings in relation to the dispute, unless the following clauses have been complied with (except where urgent interlocutory relief is sought).
9.2 Notice:
A party to the Terms claiming a dispute ('Dispute') has arisen under the Terms, must give written notice to the other party detailing the nature of the dispute, the desired outcome and the action required to settle the Dispute.
9.3 Resolution:
On receipt of that notice ('Notice') by that other party, the parties to the Terms ('Parties') must:
(a) Within 30 days of the Notice endeavour in good faith to resolve the Dispute expeditiously by negotiation or such other means upon which they may mutually agree;
(b) If for any reason whatsoever, 30 days after the date of the Notice, the Dispute has not been resolved, the Parties must either agree upon selection of a mediator or request that an appropriate mediator be appointed by the President of the ...... or his or her nominee;
(c) The Parties are equally liable for the fees and reasonable expenses of a mediator and the cost of the venue of the mediation and without limiting the foregoing undertake to pay any amounts requested by the mediator as a pre-condition to the mediation commencing. The Parties must each pay their own costs associated with the mediation;
(d) The mediation will be held in Sydney, Australia.
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9.5 Termination of Mediation:
If 45 have elapsed after the start of a mediation of the Dispute and the Dispute has not been resolved, either Party may ask the mediator to terminate the mediation and the mediator must do so.
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The Services offered by Shares For Beginners is intended to be viewed by residents of Australia. In the event of any dispute arising out of or in relation to the Website, you agree that the exclusive venue for resolving any dispute shall be in the courts of New South Wales, Australia.
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The Terms are governed by the laws of New South Wales, Australia. Any dispute, controversy, proceeding or claim of whatever nature arising out of or in any way relating to the Terms and the rights created hereby shall be governed, interpreted and construed by, under and pursuant to the laws of New South Wales, Australia, without reference to conflict of law principles, notwithstanding mandatory rules. The validity of this governing law clause is not contested. The Terms shall be binding to the benefit of the parties hereto and their successors and assigns.
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Both parties confirm and declare that the provisions of the Terms are fair and reasonable and both parties having taken the opportunity to obtain independent legal advice and declare the Terms are not against public policy on the grounds of inequality or bargaining power or general grounds of restraint of trade.
13. Severance
If any part of these Terms is found to be void or unenforceable by a Court of competent jurisdiction, that part shall be severed and the rest of the Terms shall remain in force.Privacy Policy
Last updated: July 15, 2021 PRIVACY POLICY Shares for Beginners 1. We respect your privacy (a) Shares for Beginners respects your right to privacy and is committed to safeguarding the privacy of our customers and website visitors. We adhere to the Australian Privacy Principles contained in the Privacy Act 1988 (Cth). This policy sets out how we collect and treat your personal information. (b) "Personal information" is information we hold which is identifiable as being about you. 2. Collection of personal information (a) Shares for Beginners will, from time to time, receive and store personal information you enter onto our website, provided to us directly or given to us in other forms. (b) You may provide basic information such as your name, phone number, address and email address to enable us to send information, provide updates and process your product or service order. We may collect additional information at other times, including but not limited to, when you provide feedback, when you provide information about your personal or business affairs, change your content or email preference, respond to surveys and/or promotions, provide financial or credit card information, or communicate with our customer support. (c) Additionally, we may also collect any other information you provide while interacting with us. 3. How we collect your personal information (a) Shares for Beginners collects personal information from you in a variety of ways, including when you interact with us electronically or in person, when you access our website and when we provide our services to you. We may receive personal information from third parties. If we do, we will protect it as set out in this Privacy Policy. 4. Use of your personal information (a) Shares for Beginners may use personal information collected from you to provide you with information, updates and our services. We may also make you aware of new and additional products, services and opportunities available to you. We may use your personal information to improve our products and services and better understand your needs. 5. Disclosure of your personal information (a) We may disclose your personal information to any of our employees, officers, insurers, professional advisers, agents, suppliers or subcontractors insofar as reasonably necessary for the purposes set out in this Policy. Personal information is only supplied to a third party when it is required for the delivery of our services. (b) We may from time to time need to disclose personal information to comply with a legal requirement, such as a law, regulation, court order, subpoena, warrant, in the course of a legal proceeding or in response to a law enforcement agency request. 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Although we take measures to safeguard against unauthorised disclosures of information, we cannot assure you that personal information that we collect will not be disclosed in a manner that is inconsistent with this Privacy Policy. 7. Access to your personal information (a) You may request details of personal information that we hold about you in accordance with the provisions of the Privacy Act 1988 (Cth). A small administrative fee may be payable for the provision of information. If you would like a copy of the information, which we hold about you or believe that any information we hold on you is inaccurate, out of date, incomplete, irrelevant or misleading, please email us at admin@sharesforbeginners.com. (b) We reserve the right to refuse to provide you with information that we hold about you, in certain circumstances set out in the Privacy Act. 8. 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