The idea of a successful investment portfolio is appealing to everyone.
However, the share market’s extremely sensitive and volatile nature makes it a risky bet.
We see moves in share prices hourly on the ASX. Sometimes, even the most uninformed investors can predict these movements from a mile off.
But often, there are left-of-field surprises that catch even the most seasoned professionals off guard.
So how do you become a responsible investor in the Australian share market? You’ll need more than just your instinct …
What is the Australian share market doing today?
To follow what the Australian stock market is doing on any given day, you can consult the Australian Stock Exchange website.
The ASX site provides live information on stock, index, and sector price movements. It also shares numerous resources and insights for investors.
You can also consult the daily live market updates from Australia’s largest news outlets.
The two most prominent are the Australian Financial Review and the Sydney Morning Herald. Both have dedicated market update pages with several reporters covering the biggest stock market news of the day.
You can also attempt to anticipate general stock market moves before trading commences on the ASX by checking the futures market and how the US share market performed.
While trading on the ASX is between 10 am and 4 pm, stock index futures can trade nearly 24/7.
And while the rise or fall in futures can fall outside of normal market hours, futures are often used as indicators whether the stock market will open higher or lower the next day.
The ASX also frequently shadows Wall Street, so if the Nasdaq ended its trading day on a positive note, that could mean the same for the upcoming session on the ASX.
Finally, to get a deeper understanding of the stock market, you can consult our coverage here at Money Morning.
Here, you can learn which ASX shares are worth paying attention to and which are best to avoid.
Our editors, with their vast range of expertise, provide diverse analysis of individual stocks and wider market trends.
If you’re keen on dirtying your hands in the Aussie share market, be sure to check this page regularly.
With daily updates, it’s your best place to keep up with real-time stock movements.
As always, seek independent financial advice in addition to any information you may read.
Australian share market news: Knowing what to watch
It takes a well-trained set of eyes to know where to look for information. And a good set of well-trained ears which can tune in on the worthwhile news — not just the stuff printed under punning headlines.
Basically, when there’s a stock move, it’s not enough to just notice the move. Anyone can do that, provided they use the right search terms.
To really be successful in this field, you need to have anticipated the move before it happened. Or, at the very least, you need to be able to recognise that these moves don’t happen by chance.
There’s always something behind it.
As mentioned, the ASX is a good place to start.
It oversees all movements in listed Australian stocks and is constantly updating in real time.
Companies are expected to keep the ASX informed of any share-affecting decisions the company makes, as well as share their financial reports and presentations.
It is a great resource for educating investors. But what if you want to anticipate the news?
Anticipating share market news
While keeping up with stock market news may seem essential, you should reflect on exactly why you are following the news.
Are you following the news to get a general sense of market trends and company developments, or are you ‘chasing the news’ as an investment strategy?
If it is the latter — be careful.
Why? Chasing the news is often not a good strategy for individual investors as big institutional players frequently invest in anticipation of events, not as a reaction to them.
That is why positive news about a company’s earnings may not move the stock price — professional traders have already largely anticipated the earnings, and the news has already been priced in.
Professional traders thus earn their keep by anticipating the news cycle, and enter positions before significant news breaks, not after.
How can one try to anticipate share market news? One can start by scouring the following information sources:
- Government economic reports from the likes of the Australian Bureau of Statistics, the Reserve Bank of Australia, and the Australian government’s Treasury Department.
- Company and industry news on sector trends, sales projections, competition analysis, etc.
- The RBA also publishes data on key economic indicators that can influence the stock market as a whole, or individual sectors.
Is the Australian share market open today?
The ASX is open from 10 am to 4 pm, Monday to Friday.
Normal trading happens between that time but there is plenty of activity before and after.
For instance, during the pre-opening phase — which takes place between 7 am and 10 am — brokers enter orders into ASX Trade in preparation for the trading ahead.
Orders are queued according to price-time priority and will not trade until the market opens.
And during the closing single price auction — which occurs between about 4:10 pm and 4:12 pm — the ASX Trade calculates stocks’ closing prices.
How to invest in the Australian share market?
Over a third of Australians own investments that are listed on an exchange like the ASX, ranging from shares, bonds, hybrids, ETFs, managed funds, warrants, options, and futures.
But buying shares is usually where many investors start. There are over 2,000 companies listed on ASX, which is the eighth largest share market in the world based on free-float market capitalisation.
The Australian share market offers plenty of variety, covering sectors such as resources, banking and insurance, telecommunications, information technology, media, and transport companies.
We have also produced several investing guides here at Money Morning. Here are a choice few:
- How to Invest into Stocks: A Beginner’s Guide: This guide runs through the fundamentals each beginning investor should be aware of. A great place to brush up on the basics.
- How to Start an Investment Portfolio in 2021: For the more experienced investor seeking to build a proper and durable investment portfolio.
- How to Buy and Sell Shares: For those investors ready to enter the stock market but are wondering how best to buy and sell shares.
The Australian government also offers investors resources on starting to invest over at their Moneysmart site. For example, here is their guide on developing an investing plan.