Invest My Way E-Book

Alan Hull

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 259

Veröffentlichungsjahr: 2012

Beschreibung

The definitive guide to buying blue chip shares on the Australian stock market Designed for DIY investors looking for simple, practical, low risk strategies for managing their blue chip shares, Invest My Way: The Business of Making Money on the Australian Share Market with Blue Chip Shares is perfect for anyone interested in either trading or investing long term in Australian blue chip shares. Written by respected trader and market educator Alan Hull, the book provides readers with a unique, holistic investing strategy for managing blue chip shares to optimize both capital growth and income (dividends). Beginning with basic coverage of managing blue chip shares, the book also includes invaluable information on managing portfolios as well as offering advice on when to buy, sell, and accumulate stocks. In-depth and comprehensive, Invest My Way is the latest instalment in Hull's collection of investment texts--including Active Investing and Trade My Way--which, taken together, provide readers with a complete stock market solution. * Presents a unique new strategy for making money with blue chip stocks * Author Alan Hull is a respected, well-known trading and investing expert * Walks readers through the entire blue chip investing process, including building portfolios with maximum capital growth and returns * The third instalment in Hull's complete guide to making money in the stock market, following in the footsteps of Active Investing and Trade My Way Essential reading for casual investors, including baby boomers, retirees, SMSF trustees, and anyone else interested in trading or investing long term in Australian blue chip shares.

Leseprobe

Alan Hull

First published in 2012 by Wrightbooks

an imprint of John Wiley & Sons Australia, Ltd

42 McDougall St, Milton Qld 4064

Office also in Melbourne

Typeset in ITC Berkeley Oldstyle Std Book 11/14

© Alan Hull 2012

The moral rights of the author have been asserted

National Library of Australia Cataloguing-in-Publication data:

Author: Hull, Alan, 1962-

Title: Invest my way: making money with blue chip shares on the Australian stock market / Alan Hull.

ISBN: 9781118319314 (pbk.)

Notes: Includes index.

Subjects: Blue-chip stocks.

Investments.

Finance, personal–Australia.

Dewey Number: 332.6322

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design by Peter Reardon, Pipeline Design www.pipelinedesign.com.au

Back cover image: used courtesy of Sky News

Microsoft Word, Microsoft Excel and Microsoft Paint screenshots used with permission from Microsoft.

Adobe product screenshots reprinted with permission from Adobe Systems Incorporated.

Printed in Singapore by Markono Print Media Pte Ltd

10 9 8 7 6 5 4 3 2 1

Disclaimer

The material in this publication is of the nature of general comment only, and neither purports nor intends to be advice. Readers should not act on the basis of any matter in this publication without considering (and if appropriate, taking) professional advice with due regard to their own particular circumstances. The author and publisher expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything and of the consequences of anything done or omitted to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication.

To my soul mate, Debra

Invest My Way: Making Money With the Blue Chip Shares on the Australian Stock Market

Table of Contents

Foreword

Acknowledgements

About the author

Preface

Part I: The business of investing in blue chip shares

Chapter 1: What is an investor?

Worker

Manager

Investor

Control

Fund managers

Self-management

Proven results

Business skills

Charting

OHLC bar charts

Candlestick charts

Chapter 2: Managing financial products

The investment business

Investing

Trading shares

Shares as assets

Trading or investing in property

Trading versus investing

Risk

Perceived risk

Risk management

Controlling risk

Share trading

The 2 per cent risk rule

Assess or control

Systematic approach

Part II: Managing a blue chip share growth portfolio

Chapter 3: Introduction to growth shares

Paper trading

Blue chip

Process not product

An active approach

Being above average

Optimisation

Active funds management

Testing times

Chapter 4: Rules for entering the market

Moving averages

Curve fitting

Rate of annual return

ROAR calculation

Minimum rate of annual return (the cut-off ROAR)

Liquidity

Diversification

The top 10

Checklist of steps

Chapter 5: Rules for exiting the market

20 per cent drawdown stop loss

Moving average stop loss

ROAR stop loss (exit rate of annual return)

Top 40 stop loss

Taking profit

Other considerations

Taking cash

Injecting cash

Optimisation

The checklist

Chapter 6: Let's take a test drive

Our tools for the simulation

Week one of the simulation

Week two

Week three

Week four

Jumping ahead to week eight

Week nine and reaching the end

Part III: Managing a blue chip share income portfolio

Chapter 7: Introduction to income shares

The crowd

Tangible assets

Key objectives of income investors

Asset-class shares

Lifetime

Income

Quality and value

Chapter 8: Fundamental analysis

Introducing ratios

Profitability ratios

Earnings before interest and taxation

EBIT margin

Return on equity

Debt ratios

Debt-to-equity ratio

Interest cover

Stock market ratios

Earnings per share

Price to earnings ratio

Price-earnings-to-growth ratio

Dividend yield

Net tangible assets per share ratio

Chapter 9: Searching for income shares

Quality and value (continued)

Market searches

Search results from August 2011

Search results from March 2003

Search results from November 2007

Search results from March 2009

A time to buy

Chapter 10: Managing income shares

Capital allocation: growth versus income shares

Risk management

Reviewing your income shares

Yearly review

Capital or asset allocation

Yield remains attractive

What not to do

Fundamentally sound

Future prospects

Switching from an income share to a growth share

Portfolio rebalancing

Sensible benchmarks

Part IV: Timing the market

Chapter 11: Introduction to market cycles

We drive financial markets

Time frame

Different perspectives

The economic clock

Political influence

Early Dow theory

Cyclical analysis today

Market timing

Rocket science

Chapter 12: Financial markets as complex adaptive systems

Straight lines and curvy bits

Introducing chaos theory

Chaos theory and financial markets

Complex adaptive systems

The behavioural spectrum

Practical implications

Chapter 13: Using the right tactics at the right time

The important bits

Fundamentals versus sentiment

Choice of investment philosophy

Extremes

Staying in the middle

An amazing coincidence

The local economy

Growth, income or cash

Satellite navigation for investors

Chapter 14: Plan to take action

Organisation

We’re all different

Time is precious

Aversion to risk

Mutually exclusive

Different attributes

Housecleaning

Take action

Appendix: Blue Chip Report 10-year simulation results

Acknowledgements

I am the sum total of those around me — both now and before me.

Simon Sherwood — whose support and help made this book possible.

Martin Roth — a man for whom I and many others in my industry have a deep respect.

The management and staff of Lincoln Indicators — my sincerest thanks for producing such a wonderful product and being so agreeable to all my requests.

Kathryn and Matthew, my little mates — you stop me from taking myself too seriously.

My readers — if you keep reading, I’ll keep writing.

About the author

A second-generation share trader and investor, Alan Hull owned his first share when he was just eight years old. As a result of his early start in the stock market, most of the lessons that the average investor will learn during their adult life were second nature to Alan by the time he was in his twenties.