Photographs: Margaret Walshe
At the November meeting of Investment we looked at a newly published article by the ASX on Understanding Bonds. There was a good table in the article comparing bonds with Term Deposits and Shares. Bonds which include Government and Corporate bonds can be a complex topic. However, the article was quite informative about what is involved. Thanks to Les Rodgers who provided us with the website of a commercial company which deal in Corporate Bonds.
As the market had risen by 4% during October we also looked at some shares that had shown good increases in price during October. These had come from a variety of sources.
Barbara Buchanan provided us with an interesting article on algorithms being used for computer generated trading. This method of share selection is probably being used now by some Financial Institutions and its use will probably only increase in the future.
Members are reminded that we are having our final meeting for the year on Friday 1 December at 1.30pm in the U3A room at the Seniors.
One of the topics which we discussed at the October meeting of Investment was Selling Shares. We looked at some historical aspects of various crises in the past on the stock market, as well as studying some fundamentals of share investments related to profit taking.
Peter Simpson contributed to the session with a look at the shares in the ASX 200 and their performance over a six-month period. Thank you Peter for your handout listing all the shares in the ASX 200 and their performance over a one, three, six and twelve-month period. Peter is moving to Shepparton in November and we will miss his input and comments to our group. We wish Peter and Monica all the best in their new surrounds.
The next meeting of Investment will be on Friday 3rd November at 1.30pm in the U3A room at the Seniors Centre. For those who are available we are also holding a December meeting on Friday 1 December at 1.30pm in the same venue.
The Reporting Season in August showed a satisfactory result overall for companies listed on the ASX, and provided an interesting topic for the September meeting of Investment. We looked at specific features of the reports of primarily larger companies but also included a couple of companies which had shown very good returns recently. These features of the reports often influenced the subsequent share price of those stocks in the days following the report.
The second topic of the afternoon was an insight into How to Start Sizing Up Companies that you may be considering buying shares in. The five steps talked about in this process were then applied to our long-term selections as a process of demonstrating the strategy.
The next meeting of Investment will be on Friday 6th October 2017 at 1.30pm in the U3A room at the Seniors Complex.
At the August meeting of Investment we looked at the Materials Sector versus the Midcap Index both of which showed the biggest increases in the Sectors and Indexes respectively for the 2016-2017 end of financial year results. Surprisingly we found that the two ASX Top 20 stocks in the Materials sector showed better shareholder returns over one year than stocks in the Midcap section. The other topic for the afternoon was Conditional Trading which led into a discussion on the use of appropriate Stop/Losses. It was good to see so many of the group participating in this discussion.
During the month Margaret had a visitor from U3A Beechworth. Joyce Wilkinson had heard about our Investment group through an earlier article in “The Age” and was hopeful of starting a similar group at U3A Beechworth. Joyce was also interested in other successful activities at Benalla U3A.
The next meeting of Investment will be on Friday 1 September 2017 at 1.30pm in the U3A room at the Seniors Community Centre, Fawckner Drive.
Our July Investment meeting was one of the first meetings of U3A in the U3A room at the Seniors Community Centre. The Smart TV provided by the Benalla Rural City Council showed remarkable clarity and will be very much appreciated by our members. However, to assist with better vision of the screen an alternative seating arrangement in the room will be tried at our next meeting.
Being the July meeting we looked at the performance of the various sectors of the ASX and also at the ASX Indexes over the past financial year. For interest we studied the figures achieved by some major overseas Indexes for the same period.
Exchange Traded Products or ETPs occupy only a small proportion of the ASX. However, interest in ETPs appears to be increasing partly due to prolific marketing by US firms involved with ETPs. We looked at some high yielding ETPs and also at the variety of ETPs which are available to the investor on the Australian market.
Our final topic for the afternoon was Managing Financial Risk in Share Transactions. This is an important area for those investors seriously involved in the share market.
The next meeting of Investment will be on Friday 4 August 2017 at 1.30pm
At the June meeting of Investment Peter Simpson gave an interesting talk on Investing for Capital Gains using Technical Analysis such as Dow Theory. Peter illustrated his talk using shares which had produced gains in the past six months. He also suggested four shares to watch in the next couple of months.
For the July meeting of Investment we enter a new phase with the meeting being held on Friday July 7 2017 in the U3A Room of the Benalla Rural City Seniors Complex in Fawckner Drive Benalla.
It is suggested that members enter by the side door which is in the carport. Commencement time for Investment has been changed to 1.30pm. We look forward to the first meeting in our new facility.
Members of Investment enjoyed the discussion at the May meeting about Constructing a Share Portfolio directed toward Income Producing Stocks. We looked at this subject four different ways. These included some personal preferences, high dividend yielding stocks from the ASX 50 companies and Buy and Hold recommendations from Market Index. We also worked our way through an example of Dividend Yield Play buying four different shares expressly to get the dividend in a twelve-month period using the same capital.
In another segment Peter Simpson provided us with a list of the ASX200 6 month Best and Worst performing shares for our consideration.
The next meeting of Investment will be on Friday 2 June 2017 at 1.15pm in W4.
At the April meeting of Investment we looked at an article by Marcus Padley called “Two trends creating results roulette” which had appeared in “The Age” Money section on Wednesday 8th March 2017. This article confirmed what we had discussed at our previous meeting in early March that large movements in share prices, in some cases up to 10% change in price, followed the reporting season. The article also contained information on high frequency traders who use algorithms to detect trends in other people’s trades in nanoseconds without any consideration for fundamentals.
The Materials, Energy and Utilities Sectors have performed better than some other Sectors over the past 12 months. With energy very much in the news we looked at a few companies in the Energy and Utilities sectors which have performed well over 12 months and also over the past month.
In our final topic for the afternoon we looked at the most commonly traded shares in February 2017 by contract note volumes as shown on the CommSec website. CommSec have not posted a similar list to date for March. However they have listed one for the week-ending 4th April 2017. In that list there are five companies involved in producing medicinal cannabis. None of these companies were included in the February list. One of our members suggested it could be a “cannabis bubble”.
The next meeting of Investment will be on Friday 5th May 2017 at 1.15pm in W4.
The second meeting of Investment for 2017 was in early March and we welcomed three new members namely Louise Doddrell, Brian Vial and Rhonda Manning. The numbers attending our meetings are certainly growing.
February had been Reporting Season for companies listed on the Stock Exchange. Hence we studied a sheet of 30 stocks which had shown dramatic rises or falls in their share price following the company’s report to the ASX. Several of these companies had been marked down because the market expected a better result or a better dividend. Expectation by the market plays a significant role in what happens to the share price following a company’s report to the ASX.
In our second segment we looked at median house and unit prices in both Benalla and Wangaratta areas as well as in three metropolitan suburbs and other regional areas. Using two websites we were able to look at the average house or unit price for the country town or suburb, the average rent received in each place, the annual growth rate of the property as well as the percentage return on the investment before deductions. We listed what deductions are applicable to houses and units. Using the nine locations studied we found there was a strong negative correlation between the return on investment before deductions and the average annual growth of the value of the property.
The next meeting of Investment will be on Friday 7th April at 1.15pm in W4.
February - including 6 and 12 month returns on 200 shares and 'How to Use Commsec to Your Advantage'.
At the first meeting of Investment for 2017 we welcomed four new members to our group, namely Pauline Bailey, Barbara Buchanan, Kathy Costello and Wendy Sturgess. We hope that they enjoy our investment orientated discussions.
To begin the year we looked briefly at the current economic situation facing the share market both in Australia and overseas, and compared this to conditions which had prevailed in February 2016. We spoke about some shares which had shown good growth since our last meeting in November 2016, as well as some stocks which unfortunately had shown marked declines.
Peter Simpson had put together a Performance Spread Sheet from Market Analyst showing the 6 month and 12 month return of 200 shares. We distributed this list to those present so they could check at their leisure how their own shares had performed over the past year.
Our other study for the afternoon was a sheet showing how to Use Commsec to Your Advantage. Many of our members are familiar with this website. However, parts of it have been revamped and these were demonstrated so that members can get as much information from the website as they require.
The next meeting of Investment will be on Friday 3rd March 2017 at 1.15pm in W4.
We welcomed a visitor, Angie Ellis from Melbourne to the November meeting of Investment which was our last for 2016. We congratulated the winners of our two competitions: Peter Simpson who won the monthly share selection and Graham Mitchell who won the yearly share selection.
During the meeting our members spoke to the group about a share which had interested them during 2016. We also looked at The Good, The Bad and the Ugly in shares during 2016.
We wish all our members an enjoyable break and hope to see them again in 2017
At the October meeting of Investment we looked at the various sectors and found that the Industrials index, the Health Care index and the Utilities index had shown sustained growth over the past three years.
We also examined the capitalisation indexes of shares and found that the Midcap 50 Index, which is comprised of shares within the ASX 100, but does not include those in the ASX 50, had also shown sustained growth over the past three years. As a follow up we then examined the charts of some of the best performing shares in the indexes mentioned and Midcap 50 stocks. j
Our second topic for the afternoon was Managed Funds. This umbrella can include Australian Real Estate investment trusts or A-REITS, Infrastructure funds, Absolute return funds as well as listed investment companies or LIC’s. We discussed that the choice of a fund manager with a good record was vital as the investor had no control over what the fund manager did with the money invested. We also heard that the fees charged to the investor can be considerable. Information on this topic which is easily understood may be found at www.asx.com.au
The final meeting of Investment for 2016 will be held on Friday 4th November at 1.15pm in W4. Investment will continue in 2017.
To commence the September meeting of Investment we had a look at the results of the Reporting Season of several of the major companies on the Stock Exchange. We saw how their reported figures resulted in some dramatic rises and falls in the share price of various companies following their announcement of the results. The rises and falls depended not only on the announced results but also on how the market perceived the result.
We also discussed the Telstra share buy back which was recently announced.
The final topic of the afternoon was a list of high yielding ASX listed stocks with the best fundamentals compiled from the top 150 largest companies by marketindex.com.au
The next meeting of Investment will be on Friday 7th October at 1.15 pm in W4.
The August meeting of Investment was chaired by Peter Simpson due to my family visiting from the UK.
Peter gave a talk on Indexes and handed out a chart showing the various Indexes and how they had performed during 2016. The Gold Index outperformed the other Indexes presented so far this year. Following this Peter showed two websites Anne McLeod had suggested at the July meeting and did a scan of shares paying good dividends. My thanks to Peter for his input into the August meeting.
The next meeting of Investment will be on Friday 2nd September at 1.15pm in W4.
To commence the July meeting of Investment we had a look at the financial implications of Brexit, which had been held about a week before our meeting. Following this on a more positive note we studied some good long term shares as suggested by Elio D’Amato on Commsec.
However, the feature of the afternoon was a segment from one of our members, Anne McLeod, on How I Play the Share Market. Anne outlined a well thought through strategy that obviously works. All of our members enjoyed hearing about Anne’s system and found it very interesting.
The next meeting of Investment will be on Friday 5th August 2016 at 1.15pm in W4. My thanks to Peter Simpson who will be leading discussion at that meeting.
At the June meeting of Investment we looked at the performance of some Mid Cap stocks over the past twelve months. Mid Cap stocks are those ranked by the ASX as between 51 and 100 on the Stock Exchange. We found that several had performed better than the ASX 200 over that time.
We also considered some stocks associated with Lithium production and found that they had also performed well over the past few months. (If interested, you can read more about this topic in the previous post 'Clean Energy and the Sharemarket'.)
The next meeting of Investment will be on Friday 1st July at 1.15 pm in W4.
During the last six months there has been a surge in a number of clean energy shares on the Australian share market.
Australia is uniquely positioned with lots of sunshine in the summer months, and we have seen the proliferation of rooftop solar in 230,000 households and businesses to 2014. The take up of wind power has not been so popular, with several groups opposing the establishment of wind farms, particularly near highly populated areas.
However, in the last year there has been increased discussion about the necessary change that will have to happen in energy production for Australia to keep its commitment to the clean energy target which it signed at the Paris talks this year.
A share which have benefited from this clean energy discussion has been Infigen ( IFN) which has seen a 250% surge on its price in the last twelve months from $0.32 to $1.09 per share. Infigen is a developer, owner and operator of renewable energy generation assets in Australia.
The realisation by the Australian community that clean energy is the future has led in turn to discussion of the storing of solar energy with the use of batteries. This has become a distinct possibility with the development of lithium batteries. Australia has approximately 30% or the world lithium resources. Hence companies which are involved in the exploration and mining of lithium have had a surge on the stock exchange in the past 12 months.
An example of such a company is Galaxy GXY. We have seen the price of Galaxy shares increase by 1288% in the last twelve months. Other companies involved in the exploration for lithium includes Orocobre ORE, Pilbara Mining Ltd PLS, Neometals NMT, Altura Mining AJM and Volt resources VRC and GMM General Mining. Galaxy acquired General Mining in an off-market takeover which was accepted at the end of May 2016. The most established lithium miner Orocobre Ltd has seen a 132% increase in its share price in the past twelve months.
For this trend to persist we need Government support of clean energy and the development of reasonably priced lithium batteries. This would enable owners of residential properties in Australia to then be convinced to invest in battery storage for the energy produced by their rooftop solar panels.
25 June 2016
At the May meeting of Investment we had an interesting talk by one of our members Graham Mitchell. Graham told us about the involvement of the former Investment Group 1 with the Age Share Race in the Sunday Age up to the end of 2015. He spoke about the short time – namely two days that participants were given to choose their stocks, and how his involvement in the competition spanned many years. Thank you, Graham for an interesting talk.
As it was coming to the end of the financial year we also looked at record keeping for a share portfolio. The other aspect that we discussed were some small value stocks which had made very significant gains since the beginning of 2016.
The next meeting of Investment will be on Friday 3rd June at 1.15pm in W4.
At the April meeting of Investment we had an interesting talk by one of our members, Peter Simpson. Peter spoke on selecting shares for dividend income using technical analysis. He illustrated his talk with several graphs of the shares he discussed and supplied us with an informative hand out. Thank you, Peter.
Later in the session we looked at some upward trending stocks that we had examined earlier this year, and noted which ones were still trending upwards.
The next meeting of Investment will be on Friday 6th May at 1.15pm in W4.
At the March meeting of Investment we looked at some results from the companies Reporting Season in February. We noted that companies that had missed their expected results even by the slightest margin had been severely treated by the market.
Overall since April 2015 the market has tumbled 20%. We looked at other years, namely 2002 and 2012 when a similar decrease in the market had been experienced. We noted that the fall in 2009 had been considerably greater than 20%, and that conditions then had been quite different to what they were during this last decrease. The encouraging aspect in 2016 is that the all ordinaries is now above the 5000 mark.
The next meeting of Investment will be on Friday 1st. April at 1.15pm in W4.
At the first meeting of Investment for 2016 we welcomed sixteen members. This included three new members of U3A Benalla, namely Geoff Bath, Stan Bellingham and Les Rodgers.
We started the meeting with a comparison of economic conditions as they are in 2016 as compared to 2014 and 2015, and then noted several major events which had happened to listed companies since our last meeting. The stock market had fallen 5.5% during January 2016 which is a substantial fall. However, we studied several upward trending shares which had gone against this dramatic decline in share prices.
We also looked at how Commsec was showing the reporting season this year on their website. Half year reports can explain sudden increases or decreases in individual shares and are worth following especially for stocks that you own.
The next meeting of Investment will be on Friday 4th March 2016 at 1.15pm in W4.
The November meeting of Investment Group 2 saw a more buoyant mood with the market having increased 3% since our October meeting. We discussed a range of stocks which had shown an increase in their price since July this year, and also touched on International events which made a positive contribution to some of these shares. The afternoon was completed by a brief comparative look at basic Taxation Rates in Australia, United States, United Kingdom and New Zealand. At afternoon tea we welcomed Bev Lee who took some photos of our group.
The next meeting of Investment Group 2 will be on Friday 4th December at 2pm in W4.
At the November meeting of Investment Group 2 we looked at basic taxation rates in Australia, United States, United Kingdom and New Zealand as shown in a comparative table. We noted that the rates of taxation in Australia were considerably higher than those in New Zealand. Also the number of levels of taxation in the United States is much larger than in Australia. There is no doubt that the Australians could benefit from an overhaul of the current Australian taxation system, especially if the rates of taxation in each bracket were to decrease by 3% or 5%.
Whilst taxation rates are not a priority to share investors when they commence investing, over time they can become of increasing importance. This can happen when your share portfolio is increasing in value and you wish to sell a particular share. In this situation Capital Gains taxation rules are important, in particular the rule of holding an investment for twelve months to pay reduced tax on the capital gains. Readers should refer to the Australian Taxation website www.ato.gov.au and look up capital gains for further information.
Click on the image below to access the full pdf document.
About the Investment Group
This group includes U3A members who are interested in the share market and want to participate in discussion about investments. Whilst the share market is our primary focus, we often have a related broader investment topic as well at our monthly meeting.
1st Friday of the month
1.30 - 3.30 pm
U3A Meeting Room, Fawckner Drive
Convenor and Contact Details
Margaret Jenkins 5762 6944
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