For the faint of heart

by Staff Writers on Jan 1, 1900

Tags: For | the | faint | of | heart

If your nerve is not hardy enough to jump into shares directly, other Internet support services for buying shares stand behind online brokers, such as BT Funds Managements BT Online, where investors w

If your nerve is not hardy enough to jump into shares directly, other Internet support services for buying shares stand behind online brokers, such as BT Funds Managements BT Online, where investors who want access to a diverse range of shares can purchase units in managed funds, gaining indirect access to a portfolio of shares, then track their fund holdings performance online.

But if youre an investor who wants to invest in shares directly, and you feel your online broker may only be offering you half the story on a dog of a company you want to sell out of - and brokers are notoriously reluctant to tell people to bail out of a businesss shares lest it damage their own standing with the company in question - then there are other Web sites you can visit.
A good start is the ASIC Web site, where you can run checks on company directors and their employment histories.

What if your gut feeling is that a manager is dodgy, but you cant be sure? Run a search at ASIC to find out which companies theyve run in the past and any history of bankruptcies. For finding out more about the company whose shares lure you, however, you can start by visiting the businesss own Web site.

Mr Peter Thornhill, General Manager of MLC Investments, says he is constantly amazed by the blas approach many Australians take to share investment compared to other investment fields.
If people want to buy a house they will come with their family and drive around it ten times at least four different times of the day, walk through it and go through the whole anguish of will-I-or-wont-I?, Mr Thornhill says.
But theyll buy shares on a rumour, or a friend saying, "Psssst, have I got a deal
for you."

Mr Thornhill firmly believes that quality shares will outperform quality property, citing the comparison between the value of shares in the fund manager company, Westfield Holdings, and units in the related property-manager of more than 40 properties, Westfield Trust.

Had you invested $1,000 in 1984 in each entity, profits from property returned to you dividends from Westfield Trust of $91.15 in 1985, outdoing the $60.92 in dividends from shares in Westfield Holdings.

But by 1998 Westfield Holdings shares returned $1,013.65, compared to $147 from the property manager. And by 1998 the property trust units only had an underlying value of $2,570, compared to $76,800 in Westfield Holdings shares.
Mr Thornhill says researching companies before investing in their shares is crucial, from investigating their directors, business profit-and-loss statements, the industry theyre in, down to how much of their profits they will return to you as dividends, and how much they will reinvest in themselves to grow.

If you dont have time to visit the company in question, then visit their Web site. A report released in November by Computershare Analytics and HarvestTheNet (available via www.harvestthe.net.au/asx) found that only 60 per cent of Australias 1,200 listed companies had their own Web sites, compared to 96 per cent of entities listed on the New York and Nasdaq exchanges, and 70 per cent on the boards of Torontos stock market.

The ASX Web site has records of most companies Web site addresses, as does www.harvestthe.net.au/asx, or you can use www.lycos.com or www.altavista.com to find elusive addresses, as the report found that these search engines tracked down ASX-listed companies most successfully.

HarvestTheNets study also found that Australias public companies with a Web presence were lacking in the provision of investor-friendly Internet sites. Only 23 of listed businesses with Web sites had investor-relations pages, and only 20 per cent had their contact details on the Web. About six per cent allowed investors to join email news lists, and 30 per cent offered access to share price information. Investors could see their own shareholding details on less than 5 per cent of Web sites of Australias listed companies with a net presence

This article appeared in the April, 2000 issue of PC Authority.