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ASX Investor Hour DISCLAIMER: The following material was presented - - PowerPoint PPT Presentation

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ASX Investor Hour DISCLAIMER: The following material was presented at ASX Investor Hour. The views, opinions or recommendations of the presenter are solely those of the presenter and do not in any way reflect the views, opinions,

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ASX Investor Hour

DISCLAIMER: The following material was presented at ASX Investor Hour. The views, opinions or recommendations of the presenter are solely those of the presenter and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”). ASX makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes

  • nly and does not constitute financial advice. Independent advice should be
  • btained from an Australian financial services licensee before making investment
  • decisions. To the extent permitted by law, ASX and its employees, officers and

contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted

  • r from any one acting or refraining to act in reliance on this information.

Presenter: Dale Gillham, Executive Director, Wealth Within Topic: Realities of the Sharemarket Date: 6 July 2011 Location: Melbourne Investor Hour

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SLIDE 2

Realities of the Share Market

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SLIDE 3

?

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SLIDE 4
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SLIDE 6
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SLIDE 7

M on ths to reach lo w % fall M on th s after low to m ake n ew h ig h % gain in first 1 2 m o nth s after lo w Sept em ber 60 - Novem ber 60 2

  • 23.2%

33 1 2.0 % February 64 -June 65 16

  • 20.4%

25 9.0 % January 70 - Novem ber 71 22

  • 39.0%

94 5 2.0 % January 73 - Septem ber 74 20

  • 59.3%

59 5 1.0 % Novem ber 80 - July 82 32

  • 40.6%

17 3 9.0 % Sept em ber 87 -Novem ber 87 2

  • 50.1%

75 3 5.0 % August 89- January 91 15

  • 32.4%

30 3 9.0 % February 94- February 95 12

  • 21.7%

20 2 5.0 % March 02 - March 03 12

  • 22.3%

15 2 7.0 % Average 1 5

  • 34 .0%

4 1 3 2.0 0 % No vem ber 0 7 - 10

  • 29.5%

Sou rce: Bloo m berg, AM P Cap ital I nvesto rs

Bear markets in Australian shares since 1960

November 07 - March 09 16 -55.58%

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SLIDE 8

The Reality of the Market

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SLIDE 9

The 20 Top Shares

1/1/1997 to 31/12/2009

St George was bought by Westpac

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SLIDE 10

The 20 Top Shares

1/1/1997 to 31/12/2010

Ranking of the Top 20 Total Return Average Growth Per Year 1 NCM 1807.55% 164.32% 2 BHP 731.80% 66.53% 3 CSL 678.76% 61.71% 4 ORG 653.02% 59.37% 5 WPL 483.01% 43.91% 6 WOW 385.95% 35.09% 7 RIO 341.71% 31.06% 8 WES 170.50% 15.50% 9 QBE 168.89% 15.35% 10 MQG 131.31% 11.94% 11 ANZ 128.70% 11.70% 12 CBA 119.21% 10.84% 13 WBC 103.39% 9.40% 14 FGL 28.51% 2.59% 15 WDC 15.98% 1.45% 16 SUN 7.49% 0.68% 17 NAB

  • 3.66%
  • 0.33%

18 BXB

  • 28.01%
  • 2.55%

19 AMP

  • 59.98%
  • 5.45%

20 TLS

  • 63.43%
  • 5.77%
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SLIDE 11

Positive v negative years

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SLIDE 12

Where the money went in 2010

Indice and Sector Performance 2010 First Half 2010 Second Half 2010 Full Year Indices 1/01/2010 30/06/2010 Growth % 31/12/2010 Growth % Growth full year % XTL Top 20 2949.6 2588.2

  • 361.4
  • 12.25%

2832.1 243.9 9.42%

  • 117.5
  • 3.98%

XFL Top 50 4878.9 4328.9

  • 550
  • 11.27%

4693.3 364.4 8.42%

  • 185.6
  • 3.80%

XTO Top 100 3987.8 3524.8

  • 463
  • 11.61%

3853.3 328.5 9.32%

  • 134.5
  • 3.37%

XJO Top 200 4870.6 4301.5

  • 569.1
  • 11.68%

4745.2 443.7 10.32%

  • 125.4
  • 2.57%

XKO Top 300 4868.2 4292.9

  • 575.3
  • 11.82%

4760.8 467.9 10.90%

  • 107.4
  • 2.21%

XAO Top 500 4882.7 4324.8

  • 557.9
  • 11.43%

4846.9 522.1 12.07%

  • 35.8
  • 0.73%

Sectors XDJ 200 Consumer Discretionary 1636.8 1446.4

  • 190.4
  • 11.63%

1500.8 54.4 3.76%

  • 136
  • 8.31%

XSJ 200 Consumer Staples 7809.3 7391.3

  • 418
  • 5.35%

7714.5 323.2 4.37%

  • 94.8
  • 1.21%

XEJ 200 Energy 16119.2 14092.8

  • 2026.4
  • 12.57%

16114.4 2021.6 14.34%

  • 4.8
  • 0.03%

XXJ 200 Financial Property Trusts 5607.4 4791.8

  • 815.6
  • 14.55%

5063.8 272 5.68%

  • 543.6
  • 9.69%

XFJ 200 Financials 4803.6 4166.3

  • 637.3
  • 13.27%

4361.8 195.5 4.69%

  • 441.8
  • 9.20%

XHJ 200 Health Care 8752.5 8113.2

  • 639.3
  • 7.30%

8933.2 820 10.11% 180.7 2.06% XNJ 200 Industrials 4005.1 3180.4

  • 824.7
  • 20.59%

3736.5 556.1 17.49%

  • 268.6
  • 6.71%

XIJ 200 Information Technology 672.7 633

  • 39.7
  • 5.90%

644.7 11.7 1.85%

  • 28
  • 4.16%

XMJ 200 Materials 12777.2 11435.8

  • 1341.4
  • 10.50%

14080.6 2644.8 23.13% 1303.4 10.20% XPJ 200 Property Trusts 897.3 843.5

  • 53.8
  • 6.00%

839.8

  • 3.7
  • 0.44%
  • 57.5
  • 6.41%

XTJ 200 Telecommunication Services 1175.3 1096.6

  • 78.7
  • 6.70%

959.6

  • 137
  • 12.49%
  • 215.7
  • 18.35%

XUJ 200 Utilities 4328 4058.9

  • 269.1
  • 6.22%

4413.4 354.5 8.73% 85.4 1.97% XGD Gold Index 5856.8 6437.7 580.9 9.92% 8099.1 1661.4 25.81% 2242.3 38.29%

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SLIDE 13

13/03/2009 12/06/2009 13 weeks 33.05% 4 weeks 8.65% 10/07/2009 16/10/2009 14 weeks 32.00% 3 weeks 7.80% 6/11/2009 15/01/2010 10 weeks 10.38% 4 weeks 10.05% 12/02/2010 16/04/2010 9 weeks 12.61% 5 weeks 16.92% 21/05/2010 25/06/2010 5 weeks 10.65% 2 weeks 9.23% 9/07/2010 17/08/2010 5 weeks 8.79% 2 weeks 5.80% 27/08/2010 5/11/2010 10 weeks 10.95% 3 weeks 5.06% 26/11/2010 18/02/2011 12 weeks 7.83% 5 weeks 9.40% 18/03/2011 15/04/2011 4 weeks 10.07% 11 weeks 11.06%

Bulls V Bears since 2009

Dates of bull market rises Bull market time and % rise Bear market time and % fall

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SLIDE 14

All Ordinaries Cycles

Date of low Price Weeks 14/03/2003 2666.30 4/07/2003 2977.50 16 3/10/2003 3159.80 13 30/01/2004 3271.20 17 14/05/2004 3348.40 15 20/08/2004 3479.30 14 26/11/2004 3841.60 14 6/05/2005 3886.00 23 21/10/2005 4277.00 24 17/02/2006 4739.90 17 16/06/2006 4726.00 17 24/11/2006 5303.40 23 9/03/2007 5626.90 15 17/08/2007 5490.80 23 Total 231 Average 19.25 Date of low Price Weeks 23/11/2007 6373.00 14 21/03/2008 5130.10 17 8/08/2008 4829.20 20 21/11/2008 3201.50 15 13/03/2009 3052.50 16 10/07/2009 3710.10 17 6/11/2009 4515.30 17 10/12/2010 4483.30 14 21/05/2010 4194.40 14 27/08/2010 4350.80 14 26/11/2010 4638.30 13 18/03/2011 4559.20 15 Total 120 Average 15

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SLIDE 15

Outlook 2011

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SLIDE 16
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SLIDE 17

Remember average time to make a new high is 41 months. August 2012 is 41 months from March 2009

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SLIDE 18

The money flow in 2011

Indice and Sector Performance 2010 Full Year 2010 First Half 2011 Indices Growth full year % 1/01/2011 31/05/2011 Growth % XTL Top 20 ‐117.5 ‐3.98% 2832.1 2831.6 ‐0.5 ‐0.02% XFL Top 50 ‐185.6 ‐3.80% 4693.3 4690.7 ‐2.6 ‐0.06% XTO Top 100 ‐134.5 ‐3.37% 3853.3 3840.3 ‐13 ‐0.34% XJO Top 200 ‐125.4 ‐2.57% 4745.2 4708.3 ‐36.9 ‐0.78% XKO Top 300 ‐107.4 ‐2.21% 4760.8 4716.6 ‐44.2 ‐0.93% XAO Top 500 ‐35.8 ‐0.73% 4846.9 4788.9 ‐58 ‐1.20% Sectors XDJ 200 Consumer Discretionary ‐136 ‐8.31% 1500.8 1419.9 ‐80.9 ‐5.39% XSJ 200 Consumer Staples ‐94.8 ‐1.21% 7714.5 7854 139.5 1.81% XEJ 200 Energy ‐4.8 ‐0.03% 16114.4 16475.4 361 2.24% XXJ 200 Financial Property Trusts ‐543.6 ‐9.69% 5063.8 5028.9 ‐34.9 ‐0.69% XFJ 200 Financials ‐441.8 ‐9.20% 4361.8 4354.6 ‐7.2 ‐0.17% XHJ 200 Health Care 180.7 2.06% 8933.2 8684.8 ‐248.4 ‐2.78% XNJ 200 Industrials ‐268.6 ‐6.71% 3736.5 3657.8 ‐78.7 ‐2.11% XIJ 200 Information Technology ‐28 ‐4.16% 644.7 590.7 ‐54 ‐8.38% XMJ 200 Materials 1303.4 10.20% 14080.6 13709 ‐371.6 ‐2.64% XPJ 200 Property Trusts ‐57.5 ‐6.41% 839.8 861.7 21.9 2.61% XTJ 200 Telecomunication Services ‐215.7 ‐18.35% 959.6 1035.3 75.7 7.89% XUJ 200 Utilities 85.4 1.97% 4413.4 4343.4 ‐70 ‐1.59% XGD Gold Index 2242.3 38.29% 8099.1 7697.7 ‐401.4 ‐4.96%

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SLIDE 19

Creating success

Successful trading or investing is achieved through the mastery of three distinct areas. 1.Skills/Knowledge (what you do) 2.Experience (how good you are) 3.Psychology (how you do it)

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Questions:

  • What style of Trader or Investor are you?
  • How well do you rate your level of mastery?
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Trader styles

The Cowboy

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Trader styles

The Cowboy

  • Likes to live on the open range, trades anything

and everything

  • Has very little genuine market experience and a

low level of knowledge and skill

  • Unconventional in their techniques using very little

planning

  • They tend to be erratic
  • Catch phrases: “I don’t care if I lose”
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Trader styles

The Rollercoaster or Thrill Seeker

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Trader styles

The Rollercoaster or Thrill Seeker

  • Can make money quickly, some do so over a

reasonable period of time

  • They give all the money back to the market and

sometimes more

  • They trade from gut feel not good trading

techniques Example: Tech boom and bust

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Trader styles

The Possum

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Trader styles

The Possum

  • Wants to trade but is often too scared to venture

into the market

  • Scared of losing, they justify their non action by

saying they are still learning or developing their skill, sometimes for years

  • They can have skill and sometimes are very

skilled, however, self doubt can consume them

  • nce in a trade, so they can become inconsistent

which then validates their fear

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Trader styles

The Chicken

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Trader styles

The Chicken

  • Tends to pick lots of trades
  • They think trading more means making more
  • Exit early in profit as they are scared of losing
  • There is no real purpose in their trading
  • Generally have limited knowledge and skill
  • Often costs and other factors eat up their trading

account

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Trader styles

The Astronaut

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Trader styles

The Astronaut

  • Chases the market often trading futures or some
  • ther highly leveraged instrument
  • Often trades over night
  • Usually over trades, thereby increasing their risk,

thinking they will reach the moon when they hit the big one

  • They have some skill but their psychology leads

them to be a combination of the Cowboy and the Rollercoaster

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Trader styles

The Astronaut

  • In the end most blow their account up before re-

entry into the real world - some do this multiple times

  • Then they blame the market, the broker or anyone

else they can think of

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Trader styles

The Seeker

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Trader styles

The Seeker

  • Attends every free seminar on the planet
  • Reads lots of books
  • Some have bought multiple courses
  • Never really trades as they are always searching

for the holly grail

  • They like the idea of trading
  • Some have a wealth of knowledge
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Trader styles

Some of these styles have good technical skills or knowledge, however, their psychology is poor Some of these styles have poor technical skills, knowledge, and psychology None have mastery over the technical skills, knowledge and psychology required to be consistently successful over many years

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Trader styles

What image comes to mind to describe a trading style with mastery over the technical skills, knowledge and psychology? What attributes would this style have?

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Question

  • If I gave you a million dollars to invest in one

stock for 12 months and you could keep the profits would you do it?

  • What if you had to cover any loss of capital?
  • If I gave you the stock and told you that I

guaranteed it would rise 100% in 12 months or I would pay you the difference. Would that effect your thinking?

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Question

We all want guarantees, but life is not like that Remember successful trading or investing is achieved through the mastery of three distinct areas 1.Skills/Knowledge (what you do) 2.Experience (how good you are) 3.Psychology (how you do it)

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Accredited, quality education

Wealth Within has developed Australia’s highest level of education in the share market:

  • Diploma of Share Trading and Investment
  • Advanced Diploma of Share Trading and Investment
  • Course in Contracts for Difference

For more information visit

www.wealthwithin.com.au