While there is a lot of ups and downs in the share market that are often talked about in the media, over any 20-year period, the minimum return has been 6% per year.

Uses a combination of theory (from studies in the CFA other informal studies) and experience across a variety of workplaces.

Simple explanations of why to invest, but with a decent amount of detail and valuation work that makes sense.

We also explain when to sell.

We provide complete transparency (you will see our personal portfolios as well), as well as tutorials on how to invest.

Anyone really! Anyone who’s looking to invest with some spare savings (or through a SMSF), for themselves or their family.

You might be saving for a house in 5-10 years time, already have a property and wondering what to do with spare cash, frustrated at the low interest rates on savings accounts, have a new child that you want to save some money for university…even just putting it away for security or fun in the future!

However, it is not for people looking for an “inside tip” or to get rich quick. This is a method for continually growing and preserving your money over long periods of time.

We send out 1 recommendation per month, on Friday at lunchtime. The majority of these will be from the United States (the New York Stock Exchange, NYSE, or NASDAQ) because it contains most of the world’s leading businesses. There will also be some (perhaps 1-2 per year) from the ASX, and 1-2 per year from other developed markets with good shareholder rights (UK, Western Europe, Canada).

Yes, although not all. With 12 recommendations per year, I don’t need to invest in all of them to fill my portfolio, which generally has 15-30 different companies in it. I disclose my entire portfolio and the trades in real time here:

Cost

Simplicity

Execution of trades

Availability of markets

Tax information

Personally (and for the business) we use Interactive Brokers, and our referral code is xxxx if you would like to take advantage of the offer. If you do, we receive $200 and you receive some free Interactive Brokers shares, depending on how much you invest.

Dividends - you need to pay taxes on these at the end of the year. Foreign governments will generally take a 15% tax out, that you can claim back at the end of the year, and Australian companies will often give you a credit for tax they paid.

Capital gains - you have to keep records of when you bought things, and when you sold them to calculate the capital gains tax. You only have to pay the tax on the gains when you sell them (realised gains).

Software, such as Sharesight or Market Manager (which I am a shareholder in), can help you keep track of these, if you don’t want to do it manually.

At least 15.

Ideally closer to 30. 30 provides the majority of the diversification, if they are in different industries, geographies etc. While some investors buy much more than this, most of the time it would make sense just to buy an index fund from a provider like Vanguard. If this interests you, please read the document here.

This depends a lot on the broker and the country where you are doing the trade. Generally, the range is US$1 through to about AU$20.

There are also some “free” brokers. Keep in mind though, that you will generally be getting a worse price for this, because of “payment for order flow.” This is a slightly complex topic, but in short, nothing is free.

ASX is ~2% of the global markets

ASX is concentrated in supermarkets, banks, energy, mining and telcos.

Other markets have different specialities, such as insurance (UK/US), media and tech (US), luxury brands (Europe) that you can’t get access to in Australia.

There are also opportunities to take advantage of, when other markets are significantly undervalued because of short-term issues.

Since the Australian Dollar was floated in xxxx, the average value has been about 70c. Also, the purchase price parity (otherwise known as the Big Mac Index), is currently around 69c. Countries that have their own currency generally are more stable and have less issues, and more industrialised countries have less inflation, which again helps to stabilise the currency.

Over a period of many years (or even decades), the impact of the currency should be very little on the portfolio, compared with the performance of the shares. Having said that, The Roundabout Investor does take into account the value of the currency when making recommendations.

It’s also worth remembering that you might also make money on the currency, if the Australian Dollar declines for any particular reason!

Not much! Your first investment could be as little as $100. Generally, brokers don’t have any costs for opening an account, and the trading costs are so small these days that there’s no real minimum that you need.

However, for a subscription to the Roundabout Investor, we suggest looking to invest $1,250 per month or to have a total of $11,250 within the first year.

If you’re quite at this level yet, you might want to get started with an ETF. We have an article on the blog for more information here.

While you might get good results in a shorter period of time, it’s recommended to invest for at least 5 years. That is, it’s not a good idea to invest any money that you’ll need within the next 5 years. The market can be unpredictable over short periods of time, and you don’t want to take it out at a bad time.

In short, nothing! There is no need for you to do anything. The companies that we’re invested in should be able to withstand an economic downturn, and their value should recover in time. The average period for a recovery following a severe downturn is 1-2 years.

It’s also a great time to invest some money! The best investments most people make will during times when others are panicking and selling their shares.

10% decline annually

20% decline

30% decline

50% decline

Yes! Although we would note that it can be expensive to do this, with the accounting and auditing fees generally in the $1500-2000 range. Consistent with our motto of 1-2% in fees, this would suggest it’s not worth doing with less than $75,000 to $100,000 and preferably closer to $150,000 to $200,000.

There are cheaper options such as eSuperfund, however the brokerage fees are higher and you must use their preferred brokers.

Personally, we use Green Frog, and we would happily provide a recommendation.