A new era of investing in the stock market
A new generation of investors are taking a new approach to trading stocks, betting that the market is on the verge of a huge rebound and that they will reap the benefits.
Key points:”A new generation” of investors have taken a new look at stocksA new wave of “Aussie” traders has arrivedThe stock market has been in a bull market for more than a decade.
Now a new generation are coming into the game, buying and selling stocks and investing the proceeds.
The new breed of investors includes traders who were in their 20s when the bubble burst, but now want to stay in the game for the long term.
“They are not big investors, but they want to have the opportunity to invest in the stocks they see in the future,” said Andrew Jenson, chief executive of the Australian Securities Exchange (ASX).
They are also looking for long-term returns, and are willing to pay up to $2,000 per share for stocks, he said.
“If you’re going to invest, you’ve got to understand what you’re investing in,” he said, adding that the more you understand, the more confident you can be.
“I think they’re really excited about the market.”
What’s a “share” trader?
A share trader buys a share in a company and puts the proceeds into a savings account to be held for the future.
This is the classic stock market strategy of holding onto a small amount of capital, with the money being used for future spending.
A share is worth less than $100,000 if held for 10 years.
But if the price of the share goes up from today’s $2.50 to $5.00, the investor gains a lot of money.
“You can go to the banks, go to a broker, go and buy a share and that’s the point,” Mr Jenson said.
Investors can now see their investment in stocks rise significantly in the next two to three years, thanks to the recent rally in the Australian stock market.
The share market is up more than 50 per cent this year, according to the ASX.
The number of new investors is expected to hit more than 40,000 this year.
“A lot of these new people are not necessarily big investors and are just coming into it,” he added.
“We’ve had a lot more interest from new investors in the last two or three years.”
The ASX said there are over 3,500 “Aussies” trading in Australian stock markets, with most of them moving to the market after becoming more confident.
“The average age of the ‘Aussie’ trading is in the 60s,” Mr O’Sullivan said.
What are the stock trades?
A stock trade involves a small investment in a small stock and puts that money into a different business.
“For instance, if you are a retail investor you might be trading in a restaurant or a clothing store,” Mr Wetherill said.
The person who takes part in a stock trade is called a “broker”, and the company or business he or she is trading in is called the “buyer”.
The buyer then receives the cash as dividends.
“In most cases, these are cash payments, not shares,” Mr Dolan said.
In the past, brokers would sell the stock in order to make money, but the industry is now seeing a resurgence in the retail sector, with retail stock being sold for less than the value of the shares.
“So now, a lot are starting to do that as a way to get in the market,” Mr Nunn said.
A “buy” can be an individual or a company.
When a stock is bought, the buyer takes a percentage of the stock, or “pay-out” in cash.
“The majority of them are small businesses that are selling stock for a profit, but some of them do buy more,” Mr Tully said.
But some people are buying for personal gain.
They want to invest the money and get the “cash back” in the form of dividends, which could be a cash windfall.
Some “buyers” have been known to put in tens of thousands of dollars for a single stock.
“This is the way of the future, this is the new market,” Ms Wetherilla said.
Topics:financial-market,stocks,financial-markets,stocks-and-equities,business-economics-and.traffic,finance,industry,economics,australiaFirst posted May 01, 2019 07:50:04Contact Amy O’BrienMore stories from New South Wales