Go Straight to All Financial Links
As my friends and family will tell you, I had no real interest in things corporate, commercial or financial for most of my life. At Uni, studying law and psychology, my focus was more on the humanities and, in psychology, understanding the human condition. It was not until I travelled extensively and gained admission to the Supreme Court of New South Wales, enabling me to practice as a solicitor, that I moved to Coonamble in western New South Wales and commenced my first full-time job.
Full time work was sobering in that it made me realise that despite the hype and the common perception of lawyers, the road to financial independence and wealth is one of long hours, hard work and patience as one's income creeps towards a satisfactory level. In the law that creeping process is far to slow - at least it was where I started - and, what's more, the end point was far short of my own expectations. There had to be a better way.
I guess it was the gambler in me - friends and I have always played the occasional weekend poker game or infrequently used the casino as the end point of a night out (often quite successfully) - that first attracted me to the stock market as an avenue for wealth accumulation. Of course a gambling attitude is not the right attitude with which to take to stock market investment. Mind you it can pay off, as can be attested to by the multitude of new entrants to the market in 1998 and early 1999 who made small fortunes by investing in internet stocks. The reliance on luck in such an approach is not always sensible and we shall soon see that the number of failures will far outway the number of success stories. The better I understand the net, the more I feel that success in such a highly competitive environment requires a very deep pool of resources.
My first few investments came from recommendations of friends and acquaintances in 1997. With the exception of an allocation of shares in the initial Telstra float, those purchases were an absolute disaster. Just have a look at the embarrassing collapse of Cliffords Corporation. I take heart from the fact that many savvy investors suffered with me. The bright side is that mistakes encourage caution and caution in the market, as a private investor, comes in the form of quite simple research into stocks of interest. Such research takes the form of reading recent annual reports, newspapers and specialist publications such as Huntley's Shareholder. Another useful source of information is a company's webpage. Most major listed companies maintain a site providing detailed information about operations, services, investments, expansion and current financial circumstances. However, as I found, such information is not always reliable. The Cliffords Corporation website spoke of impressive expansion, huge Asian contracts and a healthy financial position - clearly wishful thinking on the part of the authors.
A major development was access to the internet and to internet trading facilities. I started out with Commonwealth Securities Pty Ltd (ComSec), a wholly owned subsidiary of the Commonwealth Bank. This service offers a transaction only service (they will not provide any investment advice) for $29 a trade, comparable to the $75+ per transaction charged traditonally by conventional brokers. Many people feel that the access to experience and knowledge justifies the extra cost. ComSec provides a facility for the trading of Australian Stock Exchange listed options and warrants. However, at present this service is available only by telephone (phone 131519). The Commonwealth Securties website is a simple affair providing 12 month graphs for all listed companies, personalised watch lists, and trading of about 200 major stocks. At present Commonwealth Securities is the most popular internet trading site in Australia. This is no doubt attributable to the discount brokerage rates.
As many of the smaller stocks are not available to be traded through the Commonwealth Securities website I sought access to a service that would allow trading of all ASX securities. The first service that became available is E*trade, an affiliate of E*trade USA. Etrade is a publicly listed company that has recently tripled in market value with recent market interest in internet related stocks. Etrade offers trading facilities for all ASX listed stocks and plans to expand its services to include listed options and warrants together with NASDAQ and Dow Jones listed stocks. While Commonwealth Securities allows you to link any bank account to your trade facility, Etrade requires creation of an account with Macquarie Bank solely for the purpose of the Etrade account. Etrade also provides significant information resources including access to details of daily movements of stocks around the world; graphs for individual stocks with a daily, weekly or monthly base. Each utilising statistics for 100 units of the base unit (i.e. the monthly graph plots over 8 years of stock movement). Membership of Etrade also provides access to up-to-the-minute news information on all Australian and US stocks. The cost of each trade through Etrade is $50.
I still prefer to use Commonwealth Securities for regular use, because the simplicity means that access to the most relevant information i.e. current prices and graphs, is simple and quick. The detailed information provided by Etrade sometimes causes delays in screen downloads, something that would be rectified with a fast modem, powerful CPU and expanded memory. And, of course, ComSec is cheaper. Mind you, I have read that in the US internet trading is available with brokerage of just US$8 per trade!
One of the aspects of the internet I find very useful is internet banking. I have always banked with the Commonwealth Bank and so it was a natural extension to use their internet banking facilities. I read recently that an internet consultant did a review of internet banking facilities available in Australia, for his own interest, and found that the bank with the most useful and user friendly site, for his purposes, was St George Bank. The other bank to offer an online banking service is Westpac Banking Corporation. National Australia Bank and ANZ Bank are yet to offer internet banking, however at the time of publication have both completed pilot programs and hope to offer full services to clients in the near future. Each service allows clients to transfer monies between standard accounts, loan accounts and credit card accounts; to pay bills via Bpay and to produce itemised transaction records. All available 24 hours a day, 7 days a week.
Other interests of mine on the financial front include use of the internet as a tool for marketing and commerce, ecommerce, hence my study towards an MBA with an emphasis on electronic commerce and study towards a Graduate Diploma in Information Technology. Where this will all lead, I do not know, but if you come back to this site in a couple of years I'm sure all will become clear.
In April or May of 1999 I start work with the AMP in Dubbo as a Financial Planner. If you are interested in talking to me about investment options and opportunities, superannuation and your future financial security just drop me an email or check out the AMP website.
| Share Trading | Internet Banking |
|---|---|
| Commonwealth Securities Pty Ltd | St George Bank |
| E*trade | Commonwealth Bank Netbank |
| E*trade USA | Westpac Banking Corporation Online Banking |
| Australian Stock Exchange | National Australia Bank |
| Sanford Securities Pty Ltd | ANZ Bank |