Book Review > Online investing in the Australian share market, 4th Edition
|Author: KINKSY, Roger||Publisher: Wrightbooks||ISBN: 9781118606568|
|Location: Queensland||Price: 29.95||Reviewed by: Malcolm Andrews|
I had not heard of Roger Kinsky before receiving this book but a quick Google search indicates that he has written several books on share trading, mostly beginners’ series, as well as some texts on Mechanical Engineering. This book continues in the vein as a beginner’s / advanced guide to online investing. However, it must be said that the author covers the subject matter comprehensively and the online resources referenced are up to date and useful.
The book is divided into 11 Chapters, logically going from online trading and then through resources, planning, analysis methods and risks. From my point of view this order could have been reversed to give all the background, risk etc. before detailing the mechanics of trading online. Possibly there was an element of grabbing the reader’s attention early in the chapter arrangement.
Two very useful attributes of the style of this book are “Tips” throughout the chapters which provide extra detail or subtlety to previous explanations and a dot-point summary at the end of each chapter highlighting the main points in the chapter. This means that if you are time poor or just want the hard hitting facts without a lot of padding then you can skim both these elements to determine whether you are conversant with the material in the chapter or need to dive in a bit deeper.
General Content of Chapters
Chapter 1 includes introductory information on the internet itself, how it is now in almost every home and the risks involved (hacking, outages etc.). It then proceeds with a general outline of the shares concept and trading process e.g. companies, boards, shares, brokers, indices and information overload, which can be a big problem for the part-time investor.
Chapter 2 introduces the types of resources available online when investors might be looking for information on an investment such as sectors and indices, company announcements, shareholder meetings. It then moves on to the trading environment with information on trading depth and volume, watchlists and margin loans.
Chapter 3 provides a very comprehensive listing and brief explanation of useful online website. The information ranges from research houses such as Morningstar and Lincoln to newsy/ information sites such as Yahoo and MSN. The author also discusses costs and the particular focus of each of these sites.
Chapter 4 deals with online brokers and discusses such things as cost, facilities (charting, watchlists, company information etc.). The author then indicates methods of assessing the suitability of a broker for your needs and lists all the online brokers in Australia.
Chapter 5 deals with the mechanics of setting up accounts and sponsorship to allow you to actually buy a share online. This chapter also spends some time on the advantages and implications of trading online within you SMSF. This information was up to date and useful.
Chapter 6 discusses planning and monitoring. Topics such as planning what to buy, what entry point, exit point and stop losses. It then goes on to explain how to monitor your performance and determine profits/losses.
Chapter 7 provides quite a lot of detail on how to trade online, e.g. bids, orders, triggers, and transparency. It also gives screen dumps from popular sites such as CommSec on how the screen looks when you are about to place an order. This is again a very informative chapter and one that can be referenced often until you become very experienced.
Chapter 8 deals with fundamental analysis and gives a good introduction to the science of assessing the fundamental financial health of a listed company.
Chapter 9 gives an in-depth explanation of technical analysis. This is often considered the opposite to fundamental analysis and many investors choose one or the other to determine their buy and sell signals.
Chapter 10 discusses the online indices and how these can be used to enhance or guide your investments.
Chapter 11 looks at the many levels of risks involved in investing in shares from sovereign risk to reduced dividend risk.
I regard this book as a very comprehensive, accurate and useful introduction to investing generally and online share trading in particular. It is written in an easy to follow style with Tips embedded in the chapters and a dot-point summary at the end of each chapter for visual scanning and speed reading. When online resources are discussed, the URL for each website is given with a comment on its cost, advantages and usefulness. I tended to agree with the comments and didn’t find any sites that were out of date or offered seemingly misleading information.
In general the book gives quite a lot of information on fundamental subjects such as how companies operate (boards, AGM, share register etc.) right through to risks and how to evaluate performance (profit/loss). In all it is a very well balanced approach to the positives as well as the risks of share trading from someone who obviously has spent a lot of time researching and using the online platform.
This book will be good for a range of investors from those taking their first steps into investing and educating themselves about how to invest their own money to those that have been trading shares for some time but are still unsure of how the big picture unfolds. It is probably not for someone with significant experience in share trading although I would consider myself experienced and still found plenty of interest.