Sorting out the winners

I'm overwhelmed with information.  I have to narrow the field of choice to invest. I say Invest because speculating is risky at this stage.  I start my research by sorting out the winners from the losers - I buy the newspaper AFN, and highlight all the shares on the ASX that have a high % price change increase. 

I create a spreadsheet sorting the companies into sectors. 

I proceed with a further cull, based on the dividend yield  i.e A $1.00 share paying a 5 cents - dividend has a yield of 5%. My benchmark is anything higher than the current interest rate available on fixed term deposits for 3 years or more 3.6% Rabobank.  I'm not really interested in high yielding shares that are at the highest they have been for the past 52 weeks.  I remind myself that I am investing not speculating.  I need to buy low and sell high.  My intention is to create an income for the future. 

I look at the P/E ratio of the companies that are left - in basic terms  how much money you are paying for $1 of the company's earnings.  For example if a company is reporting a profit of $2 per share and the stock is selling for $20 per share, the P/E  ratio is 10.  In other words you are paying ten-times the earnings.  PROFIT/EARNINGS=P/E RATIO.  I split my spreadsheet into 2 sheets - the first - Investment shares the 2nd sheet Speculative,  the resource companies in my spreadsheet that don't pay any dividends but have increased in value.

Understanding the basics.

I read a book 'Motivated Money' by Peter Thornhill. It is insightful, written clearly and concisely. He explains and compares all the asset classes, property, fixed interest deposits with equities (Shares). Equities overtime beat any other investment in the financial sector in his opinion and he shows many years of historical evidence to support this.  I research many other websites Motley fool, Yahoo Finance, Google Finance and listen to the nightly news.

A blog is born.

We are bombarded by conflicting messages about the sharemarket every day through the media. 

The GFM in 2008 has left people very nervous and confused about investing.  I decided to get the facts and then make up my own mind about how and where to invest. This blog will share with you my research, knowledge and  results.

This blog has been the result of many of my friends, mainly women asking me for advice and telling me how difficult it is combing through the myriad of available information on buying and selling shares. 

I have been trading currencies for 6 years and  I understand the principles of trading. 

Equities (shares) was a sector of the financial markets that I felt compelled to find out about. Hopefully I can inspire more women to formulate a clear vision of there financial future through writing about my experience.

I believe striving for financial goals whether altruistic or personal is a key to feeling successful and secure.