Share Market Tips

By Dale Gillham

The Australian share market can seem a bit like a minefield for uneducated investors and traders who don’t understand the risk they are taking. If you are one of these and you believe that the share market is risky business, it means you are probably like many others, missing out on profiting from owning shares.

Safely navigating your way in the Australian share market is made simple with some rules. Knowing the rules allows you to avoid the common mistakes investors make in the share market. So to help you, here are seven share market tips I teach investors:

Seven Share Market Tips For Investors

Share Market Tips 1

Your biggest risk occurs when you put money into investments you don’t understand. In fact the moment you put your money into the market you are at the biggest risk as you are not in profit with that investment and do not know that your investment will rise.therefore it pays to have a strategy in case your investment does not rise as you expect. In rising markets people mistakenly believe that there is no urgency to get educated, however markets do fall and when they do they catch uneducated investors out, causing them to lose profit and capital. The best way to minimise the risk in your share market investments is to be prepared by educating yourself before you invest.

Share Market Tips 2

Investing without a stop loss is high risk. A stop loss allows you to decide up front how much money you are willing to put at risk. When it comes to investing, it’s not what you stand to make out of any one share that is important, but rather what you do not lose one your shares. Let me ask you if you have ever worried about a share you own rising in price? I bet your answer is no, however I also bet that you have worried about your shares falling. Therefore it just makes sense to have a strategy to exit. The challenge is most people do not know how to set them properly. What most do not realise whether they are investors or traders is that it is easy to use stop losses, and using them really does help you make more money.

Share Market Tips 3

Investing without a plan is gambling. We all know the saying “fail to plan and you plan to fail”. I think Warren Buffet put it best when he said “Someone’s sitting in the shade today because someone planted a tree a long time ago”.

Share Market Tips 4

Never buy a stock just to get a dividend. Always buy for capital gain first and dividend second, as the dividend is the icing on the cake not the cake itself.

Share Market Tips 5

In my book How To Beat The Managed funds By 20% I talk about the myths of the share market, one of them is to never dollar cost average or average a loss. This flawed strategy subjects investors to increasingly higher risk when investing in shares that are falling in value. Can I say that during the GFC I continued to see investors use dollar cost averaging on shares they owned, only to find their portfolio continue to significantly decrease in value.

Share Market Tips 6

Another myth I talk about in my book “How To Beat The Managed Funds By 20%” is to never buy a stock because it appears cheap. Cheap does not mean a ‘bargain’ in the share market. You should always buy quality shares not quantity to achieve the greatest long term gains. The top 50 shares on the market is a good place to look.

Share Market Tips 7

Whilst it is true that diversification reduces risk, a portfolio that is over diversified (more than 12 stocks) will generally mirror the market, which can mean losses of up to 50 per cent or more for some investors.

There are only two things we can control when it comes to the share market, when we buy and when we sell and therefore it is essential to understand how to get this right.

If you want to learn to how to consistently profit from the share market, join the Your Trading Mentor 10 lesson course This course is full of helpful share market tips and strategies that anyone can learn and use straight away to make better returns on the share market. It is simple easy to follow and is designed to help both investors and traders to have more confidence and become more profitable. 

If you have any questions feel free to email info@wealthwithin.com.au or write your question in the comment box below and we’ll get back to you shortly.

Dale Gillham

Chief Analyst/Trader/Author

Wealth Within

  • Equity Research Lab

    Great piece of writing, I really liked the way you highlighted some really important and significant points. Thanks so much, I appreciate your work.!!!!!!!!!!!!
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    • Blogmaster

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