Educational articles

Why did the Australian Market Lag the US Last Financial Year?

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The Australian stock market has delivered a relatively subdued performance during the last financial year compared with some international markets. While individual sectors have experienced periods of strength such as materials and energy, the broader market has struggled to build sustained momentum. This reflects a combination of domestic economic conditions, global uncertainty, sector-specific challenges, and the unique composition of the Australian share market. Unlike the U.S. market, where a handful of technology companies have driven much of the overall gains, …

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Does dividend stripping work?

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Dividend stripping is a strategy where an investor buys a stock just before its dividend is paid, collects the dividend, and then sells the stock shortly afterwards. In most cases dividend stripping does not work. For most individual investors, dividend stripping is not a reliable way to make money. At first glance, it sounds like free money, but in practice it rarely works that way. When a company pays a dividend, the stock price usually falls by approximately the amount …

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5 Ways to Determine a Stop Loss Level

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A stop-loss is a predetermined price at which you will sell a stock if it moves against you. Its purpose is to limit losses and protect your investment capital. While many new investors simply choose a percentage such as 10% below the purchase price, experienced investors understand that an effective stop-loss is based on the stock’s behaviour, market conditions, and their own investment strategy. Choosing the right stop-loss requires careful planning because placing it too close to the current price …

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Why set and forget stocks do not exist

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Many investors come to the ASX hoping to find a stock that can be bought once and then ignored for the next 20, 30 or even 40 years. The problem is that such a stock would require a company to remain profitable, competitive, well managed and appropriately valued across multiple decades of economic, technological and social change. In reality, no company can offer that certainty. A stock is not a savings account or a government bond. It is ownership in …

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How to Avoid Emotional Investing

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Understanding Why Emotional Investing Happens Emotional investing starts with how humans are wired, not with a lack of knowledge. Financial markets move up and down constantly, and the brain naturally interprets sudden losses as danger and rapid gains as opportunity. This creates strong emotional reactions such as fear during downturns and excitement during rallies. The problem is that these instincts, which are useful in everyday survival situations, often lead to poor decisions in investing. A falling portfolio feels urgent, even …

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