The greatest challenge facing Aussie investors
The 2023 ASX Investor study claimed that 34% of those surveyed indicated that their top challenge was knowing which sources of investment information to trust. In addressing this challenge, I believe there are two issues that need to be resolved.
The first is what investors need to know to be able to assess what is trustworthy information and secondly, how do they identify trustworthy sources of information to invest confidently.
It is human nature to trust what someone reads, but that doesn't make that source of information trustworthy. Investors with little knowledge who watch YouTube or read books tend to have certain misguided beliefs about investing that gives them a false sense of what they really need to do.
As such, in order to assess whether the information is trustworthy, you need to educate yourself on the subject. Without this step, moving onto the second issue of being able to identify trustworthy sources is futile.
Investing is exciting but it can also be scary, which is why the quality of information you rely on will determine your success. Reliable sources include reputable financial news services, such as the Australian Financial Review or big brokers like CommSec and websites, such as Bloomberg. As these organisations have to protect their reputation, you can be assured that what they report is high quality, as they have trusted financial experts and analysts contributing information.
It's also important to consider different opinions, as this helps to compare different types of investments and strategies when assessing an opportunity. Websites I regularly visit include ASIC's Moneysmart, the ATO and the ASX. I also frequently visit the Australian Bureau of Statistics (ABS).
These bodies offer trusted sources of information, such as economic data and articles that are written in an unbiased tone.
There is some value in investment reports although these are harder to assess unless you educate yourself because this is the one area where investors make the most mistakes. While these reports do provide comprehensive analysis, there is often bias in the research.
I would be doing investors an injustice if I didn't also include the sources of information to avoid. While community chat forums and social media platforms can provide some useful information, I urge investors to use these with extreme caution. There are many self-proclaimed "experts" who run on ego and may not have the expertise they claim.
Remember, the quality of information you rely on will greatly impact your risk and success. Therefore, it's essential to spend time educating yourself, so you can distinguish between trustworthy sources and potentially misleading or biased sources of information.
The best and worst performing sectors this week
The best-performing sectors include Consumer Discretionary, Healthcare and Communication Services, which are all just in the red for the week. The worst-performing sectors include utilities down more than 2% followed by Financials and Real Estate, as they are both down more than 1%.
The best-performing stocks in the ASX top 100 include Aristocrat Leisure, Treasury Wines Estate and ALS, as they are all up more than 2%. The worst-performing stocks include the Star Entertainment Group down more than 6% followed by Challenger and AGL Energy down more than 5%.
What's next for the Australian stock market
This week the Australian stock market has once again done the unexpected, as it has fallen away after looking bullish and with the expectation that it would continue to be bullish, at least for a couple more weeks. Currently, the market is down slightly more than 1%, which could be good news.
If the market starts to rise again next week, then over the coming month it will most likely continue to rise and challenge the all-time high. That said, if the market falls away, it will continue to fall for at least two to three weeks before turning to it rise.
How the market unfolded this week is why I continue to caution investors to manage their risk and not jump into stocks believing they are cheap or to buy in the dips. Be patient because the opportunities will come.
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