PNG Insight Blog

Step-by-Step Guide to Investing in Stocks and Shares

In the first post, PNG Insight emphasises the importance of research before investing in stocks and shares. Here is the link to the earlier post 'Why investment must have the right balance of the three starters: Research, Money and Approach'.

Unlock your investment potential

This follow-up post is, basically, a beginner's guide to finding your own way around the stock market by:

Investigating the 2 common methods for analysing stocks;
Identifying 8 key stock-picking tactics;
up Stock and Share Account;
Monitoring stocks over time;
Choosing Research that works for you; and
Busting 5 stocks and shares investment myths.

The whole bullet point is a process. It can take years to confidently make the first investment.

If you think investing in shares is something you can do in the future, you’ve got to start now. Understandably, researching and understanding the market now adds to your knowledge base as a potential investor. As you grow older you become wiser, making the right investment decisions.

Let’s make a start.

1. Analysing stocks – the key to successful investing

Two *common* methods of analysing stocks are called Technical Analysis and Fundamental Analysis.

The technical analysis is used where stock researchers use the price, volume, charts and behaviour of a particular stock to understand the overall performance of that stock before (during and after) buying the stock. This method is very technical in nature. Chartists are examples of technical analysts who use charts to identify patterns and trends to *predict* future share price movement.

Fundamental analysts research a company’s cash balance statement, management reputation, global and local economy, commodity prices, and the overall *intrinsic* value of the company. A key indicator many fundamental analysts look for is the company’s cash.

Note: Both Technical and Fundamental analyses can be used together depending on what works for you as an individual investor.

The minerals and oil & gas exploration companies are the *high* risk investments. Many of the *exploration* companies do not have cash at hand. If you are going to tread there, it is important that you tread carefully.

2. Pick stocks for analysis

This step is supposed to come before the Technical and Fundamental Analyses discussed above. It is placed second because you need to know how to analyse stocks and shares before picking them. (No point picking stocks when you do not know how to analyse them)

The 8 ways to select shares before researching are listed in the table (not a complete list):

PNG Insight Compilation 14/11/2017 (click on image to enlarge)

Do you have accounts with Nasfund, Kina Bank, BSP or into POM stock exchange? Check out the latest Financial News, Savings and Loans, and Superannuation updates on PNG Insight.

3. Practice makes perfect: fine-tune your stock picking/research skills

Now that you’ve picked a stock that you *think* (Step 2) to be undervalued and *confirmed* (Step 1) the stock is undervalued in your analysis, it is time to put your stock to the test. This step is crucial to determine whether you can use the research technique employed here on serious investments in the future, or not. It is about finding out what works for you.

One way to do this is to create a Share Account with ASX and build your Watchlist.

Step 1 – Open an account (free)

Go to MyAsx Registration page and sign up.

Step 2 – Create a Watchlist

You can add, edit and view your Watchlist. Be realistic about the number of shares you are buying and how much you want to spend. Avoid adding random shares onto your portfolio - only add the stocks you researched. This will make it easy to test (compare) the stocks against your in-depth researches. A good practice.

Source: MyASX.com.au Screenshot 14/11/2017 (click on image to enlarge)

As mentioned earlier, it is important to track the stock you’ve picked and analysed (in Steps 2 & 1, respectively). And, to also find out *if* the research you did was worth replicating when making serious investments in stocks and shares.

Here is an example of a Watchlist. Though the monitory value is virtual (not real money), the other features (volume, chart, prices, announcements…) are live market feeds- delayed by 20 minutes.

Source: MyASX.com.au (click on image to enlarge)

4. Investment Myths - busted

Some people, interested in investing in the share market, thought that you would just sit and monitor the screen and make money. In fact, it is not true.

Myth 1 – You can make lots of money investing in stocks and shares

This is a half-truth. You are likely to lose money investing in stocks and shares. To avoid losing money people either do proper research before investing or pay advisors to guide them when investing.

Myth 2 – You cannot invest in overseas stocks and shares from PNG

You can. If you are serious about investing, BSP Capital and Kina Securities are the local brokers who can help you open a share account and start investing. My top hint is to find out about the recent issue with the foreign currency exchange, brokerage (Buy/Sell) fee, and minimum amount needed to open a Share Account. You can also invest in companies listed on the POM Stock Exchange.

Myth 3 – You should have a Degree in Finance and Accounting or related discipline to invest in stocks and shares

This doesn’t mean you cannot invest in stocks and shares if you know what to do. If you build up a good knowledge base, put them into practice and trust yourself – you can do it too.

Myth 4 – I’ll wait till I save enough money to invest

The best time to start is now. You can open free online accounts and test your findings using real-time data. When you have some money, you’ll know just what to do.

Myth 5 – Anyone can make money in the stocks and shares market

No. The investors who do thorough research (or choose a brilliant advisor) can earn a decent return on their investment. It is not anyone’s cup of tea.

I hope this post serves as the *seed* that grows into a big plant. If you have any questions relating to this post, kindly leave a comment below.

Do you have accounts with Nasfund, Kina Bank, BSP or into POM stock exchange? Check out the latest Financial News, Savings and Loans, and Superannuation updates on PNG Insight.

PRODUCTION STARTS 2019: BISMARCK SEA SEAFLOOR EXPERIMENTAL MINING IMPACTS NOT QUANTIFIED YET, MIT STUDY

1. Brief

Image: MIT Environment
Solution Initiative

Nautilus Minerals is a small cap Canadian company, registered in Brisbane Australia and majority owned by an Oman Group. Described as an experimental seafloor mining company, engaging in the exploration and development of Seafloor Massive Sulphide systems in the Bismarck Sea. The company has planned to use remote-controlled heavy machinery and hydraulic pump to mine the minerals, including gold and copper.

2. Planned Experimental Mining

The latest project update indicated that the planned mining activity will start early 2019. But no definite date was announced. In fact, the company has postponed the start of production from 2017 to 2018 and (in the latest update) to 2019.

Mike Johnston, Nautilus’ CEO was positive about the seafloor production system:

"The system remains on track for initial production during the first half of 2019, subject to further financing as indicated previously.” (project update, 10/10/2017)

Nautilus Minerals concept of deep sea mining is not very popular among the people living along the coastal regions of Morobe, Madang, Sepik, Manus, New Ireland and East New Britain. There is also *strong* opposition to the project voiced by prominent locals, Church leaders and national politicians (click here for details).

IMAGE: Nautilus Minerals via Massachusetts Institute of Technology website

A day trip to the Port Moresby Adventure Park is an ideal way to spend a Saturday or Sunday with family and friends. The park is also a tourist attraction in the city capital, Port Moresby. The park opens early at around 8.30 am and closes in the evening, at 5.30 pm.

Other fun places to visit in Port Moresby

Port Moresby Adventure Park
Sunset Lodge
Loloata Island Resort
Koitaki Country Club
Varirata Natioanl Park
Kokoda Track Memorial
Bomana War Cemetry
Tutu Beach

Just to clarify any confusion about the two parks in Port Moresby: the Nature Park is the one past the University of Papua New Guinea. It is within the city precincts. The Port Moresby Adventure Park is located opposite the Pacific Adventist University entrance. About 30 minutes drive from the city, along the road to Sogeri.

General entry to the park is free. That means that you can go in without paying and wander about but only pay (refer to fees below) if you are going to part-take in the park's organised activities.

The Adventure Park has many fun things-to-do for both young and old. You can easily spend the whole day at the park and do all or some of your preferred activities.

Here are the top 10 fun activities to do at the park. A couple of the activities are free. But you must pay to do others.

1. Party or Barbecue:

At the cost of K60, visitors can use the bbq hut (haus wind) for the whole day. The visitors are required to pay the fee at the entrance before proceeding to choose a hut. The image shows an area without the shelter - the actual hut is visible at the far end. There is no shortage of huts all around the park.

Source: Adventure Park PNG, Facebook

2. Wander through the Orchid Garden and Birds' Sanctuary

It only costs K5 per person to go in. The Orchid Garden has been one of the best-kept orchid gardens in PNG. There is a chance to also hear the Kumul (Bird of Paradise) singing as you wander through this beautiful garden.

Image: FIFA Women's World Cup

3. Children's Waterslides

The waterslide is fun. It costs K20 per head. Always do the other activities before this one. Once the kids get-the-hang of it, there is no moving away until it's time to go home. Top tip: always take swimmers or shorts to be in the swing of excitement with the kids.

4. Go Paddling on the Paddle Boats

It costs K10 per person for 30 minutes. Another fun activity the kids would love. Top tip: take some bread crumbs for the kids to feed and attract the fish to your boat as you paddle along.

5. Merry-Go-Around/Carousel

At K5 per person, this is sure to put smiles on the children's faces.

Pee Wee Fishing at the Royal Papua Yacht Club (RPYC) is a lot of fun for both children and parents. The kids and parents fun event is held on the first Saturday of every month. Fishing usually starts at 2.00 PM and lasts for 2 hours.

You can find out about the event at the Yacht Club Facebook page. They usually create an 'event' for the Pee Wee Fishing on their page, so keep an eye out for it or message RPYC before hand.

View from the jetty

A fantastic group of volunteers dedicated their first Saturday of every month to organising this event. The event is made possible by 10 corporate sponsors and runs from February to November. Children are free to get a helping of snacks during fishing. Prizes are also given out after the fishing.

The prizes are awarded to the top three children. So kids and parents, make sure you catch the biggest fish or the most fish on the day. Small-talk on the jetty has it that stingrays, baramundis and crabs have been caught there, as well as fish pulled out of the water in numbers.
There were also sightings of a 'big' sea snake just around the rockery recently :). You never know what you can catch at the RPYC Pee Wee Fishing event. Sunscreen, hat and water are a must to take with you.

If you are a parent looking for somewhere to take the children out or kids wanting to have fun, this would one day of the month you wouldn't want to miss. Thank you and hope this helps to get the kids outdoor.

Sponsors 2017

Fishing rods provided - you can also bring yours

Nov 11th 2017...not the 4th

Leave a comment below if you find this useful. You can also join PNG Insight (Follow @PNG_Insight) for more parents and kids things-to-do around Port Moresby.