Do you invest in shares? I attended the AGM of a major media conglomerate today and it was a real buzz! I got to hear from the Chair and CEO of one of Australia’s largest companies…
and to vote on a little gadget that records each shareholder’s preferences…
and to practice my public speaking skills by posing a question from the audience about how the company is investing in and developing its female workforce and women’s markets, and innovating across its core businesses.
Oh, and I got to meet other shareholders afterwards over a cocktail sandwich or two and a Devonshire tea!
If you’ve never been along to an Annual General Meeting – or AGM – I would really encourage you to do so.
Growing up as a simple country kid, in a small South Australian town, I knew nothing at all about shares and financial markets and the economy. It wasn’t something that our family had exposure to. Though I do recall my Mum and Dad very excitedly becoming accidental shareholders when an insurance policy they owned was converted to equity in the process of a demutualization. But other than that, the investment world was outside of our frame of reference.
When I first started working as a graduate in the banking sector (now this will show my age!) it was well before shares were recorded electronically on the CHESS share trading system. One of my first responsibilities was to update the share security register at the bank branch where I worked, and this involved using a newspaper to source the current share price at the end of each month, to then manually calculate the current value of the holding (using a calculator because it was before the days of spreadsheets!). This would determine whether there had been any breach to the security arrangements of certain facilities in place for business customers. It all seemed quite foreign and rather exotic to me back then.
But these days, I love investing in big companies. Even more than I enjoyed working in them.
I’ve learned over the years that share ownership – the act of investing in publicly listed companies – is something that anyone can do. It’s empowering, it’s educational, it’s easy and it’s fun. And share ownership has certainly been good for me.
Now I am definitely NOT licensed to give financial advice and I’m NOT offering any opinion on how you should invest your money. But, here are 11 reasons why investing in equities has been good for me and could be good for you too:
- You can start small. Anyone can be a shareholder, all it takes is the purchase of at least one share in at least one publicly listed company. Open a trading account and you can do it yourself, and have access to untold information about the companies on offer. Note: there are fees for each trade so you’ll need to take that into account when making purchase decisions.
- You can invest in a diverse range of businesses, industries and sectors. Regardless of your background and work history, you can invest in any industry, servicing any sector, through as many different companies as you wish. Even if you work in, say, the public sector, you can choose to invest in companies that are very different to your sphere of work or indeed those that are very similar. The choice is all yours!
- You can broaden your exposure to a sector without any setup costs or ongoing operating costs. For example, we’ve invested heavily in the agricultural sector through buying our farm and the livestock we breed there AND I also invest in shares in the agricultural sector that are MUCH easier to manage than a grumpy ton of beef on legs that’s trying to protect her calf at foot!
- You can expand your knowledge and your areas of expertise. I worked in the banking sector for many years and I maintain a shareholding in most Australian banks, which enables me to keep abreast of the strategies being adopted by the Boards of each. I also invest in many companies across the ASX50 covering a full spectrum of industries. This is helpful background knowledge in servicing my coaching and speaking clients within the same companies and sectors, and gives me great insights into the challenges they face individually as well as at a business level.
- You can learn about how big companies are run and how they fit within the broader economy. Attending the Annual General Meeting (AGM), reviewing the annual report, following ongoing investor announcements and tracking the share price provides insights into why the company is investing or divesting from different sectors and industries and a feel for how the economy is performing overall.
- You can have a voice. If there’s a cause or sector you’re particularly passionate about, you can attend the Annual General Meeting of any company you invest in and lobby for investment in that particular area. This is true whether you hold one share or one million. And even if you can’t physically attend you can cast your vote via a proxy. For example, I like to ask questions about how my companies are investing in women and innovating to benefit from emerging markets and trends.
- You can keep a foot in the door. If you take a career break, or leave the corporate world to start your own small business, you can stay abreast of happenings in your field and the corporate end of town.
- You can have something to talk about. When you’re networking or just catching up with friends or even around the watercooler, it’s always good to have something current and interesting to talk about. You’ll always have good conversation fodder when you own shares.
- You can learn about directorships without any liability. If you’re interested in becoming a company director and sitting on Boards, you really need to know some of the lingo and practices like how to address questions through the Chair, how to review annual reports, and what different strategies can be employed for growth, consolidation, expansion and so on. Owning shares will give you a real opportunity to experience this first hand, with any liability limited solely to your initial investment.
- You can make money. If you invest wisely, you can grow your portfolio or make money trading. This isn’t the only driver behind my investments, but it’s certainly an important element.
- It’s fun! Really, it is. You can trade up and down and in and out of all sorts of interesting companies.
Have I convinced you yet? If you need a hand getting started then do reach out – I’d be happy to collate a list of Q&A to help you and if we have enough interest we could hold a seminar or webinar or even start a little investment club to get together, network and swap notes. Fun!
Investing in shares is great. Investing in yourself is better. So come on, what are you waiting for?
Yours in anticipation,
[…] – I have many views on why we should all hold shares (to get the ball rolling, these are my 11 reasons why we should all invest in equities) – and I feel strongly that as a community we can and should demand more of the Boards and […]