Module 2<br />Understanding the Financial Markets<br />
“The stock market exists to transfer wealth from the uneducated to the educated”<br />The financial markets are a market p...
Supply and Demand create the underlying market cycle<br />Three types of market:<br /> <br />More buyers than sellers = pr...
So what typifies each of the markets?<br />
Bull Market<br />In a Bull Market:<br />Share prices are rising<br />Demand is greater than supply (More buyers than selle...
Bullish Market<br />More buyers <br />than Sellers<br />=<br />Bullish Market<br />Buyers or Demand<br />Sellers or Supply...
Bullish Market<br />
Bear Market<br />In a Bearish Market:<br />Share prices are falling<br />Supply is greater than demand (More sellers than ...
Bearish Market<br />More Sellers<br />than Buyers<br />=<br />Bearish Market<br />Sellers or Supply<br />Buyers or Demand<...
Bearish Market<br />
Flat Market<br />In a Flat Market:<br />Share prices are moving sideways<br />Supply and demand is in equilibrium (equal b...
Flat or Sideways Market<br />Same buyers <br />As Sellers<br />=<br />Flat Market<br />Sellers or Supply<br />Buyers or De...
Sideways Market<br />
Market Patterns<br />The share market cycles have 5 distinct patterns <br />Ground Swell – where the early buyers begin to...
Market Patterns<br />3. Peak<br />4. Down Trend<br />2. Up Trend<br />5. Trough<br />1. Ground Swell<br />
Our Market<br />Australian Stock Exchange (ASX) is the primary market in Australia <br />Why invest here?<br />Invest in w...
Two forces impacts supply and demand?<br />The economic climate <br />Emotions in the market <br />
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1. understanding the financial markets

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  • 1. understanding the financial markets

    1. 1. Module 2<br />Understanding the Financial Markets<br />
    2. 2. “The stock market exists to transfer wealth from the uneducated to the educated”<br />The financial markets are a market place where buyers and sellers meet to exchange financial products<br />Market Behaviour is driven by Two forces: Supply and demand<br />Supply and Demand reflect current buying and selling decisions<br />Supply and Demand<br />
    3. 3. Supply and Demand create the underlying market cycle<br />Three types of market:<br /> <br />More buyers than sellers = price rise or bull market <br />More sellers than buyer = prices fall or bear market<br />Equal numbers of buyers and sellers = sideways or flat market. <br />Market Types<br />
    4. 4. So what typifies each of the markets?<br />
    5. 5. Bull Market<br />In a Bull Market:<br />Share prices are rising<br />Demand is greater than supply (More buyers than sellers)<br />Buyers arewilling to accept current, and higher and higher prices; therefore prices are rise over time<br />Optimism is strong in the market.<br />
    6. 6. Bullish Market<br />More buyers <br />than Sellers<br />=<br />Bullish Market<br />Buyers or Demand<br />Sellers or Supply<br />
    7. 7. Bullish Market<br />
    8. 8. Bear Market<br />In a Bearish Market:<br />Share prices are falling<br />Supply is greater than demand (More sellers than buyers)<br />Buyers are not willing to accept current prices; therefore prices are depress over time<br />Pessimism is strong in the market.<br />
    9. 9. Bearish Market<br />More Sellers<br />than Buyers<br />=<br />Bearish Market<br />Sellers or Supply<br />Buyers or Demand<br />
    10. 10. Bearish Market<br />
    11. 11. Flat Market<br />In a Flat Market:<br />Share prices are moving sideways<br />Supply and demand is in equilibrium (equal buyers and sellers)<br />Indecisiveness is strong in the market<br />
    12. 12. Flat or Sideways Market<br />Same buyers <br />As Sellers<br />=<br />Flat Market<br />Sellers or Supply<br />Buyers or Demand<br />
    13. 13. Sideways Market<br />
    14. 14. Market Patterns<br />The share market cycles have 5 distinct patterns <br />Ground Swell – where the early buyers begin to see value in the market and buy<br />Uptrend or bullish<br />Peak – followed by consolidation period where supply and demand is temporarily in equilibrium<br />Downtrend or bearish<br />Trough – followed by consolidation period where supply and demand is temporarily in equilibrium.<br />
    15. 15. Market Patterns<br />3. Peak<br />4. Down Trend<br />2. Up Trend<br />5. Trough<br />1. Ground Swell<br />
    16. 16. Our Market<br />Australian Stock Exchange (ASX) is the primary market in Australia <br />Why invest here?<br />Invest in what you know and can understand<br />12% PA average returns over last 50 years<br />100 shares per option contract as of May 2011<br />
    17. 17. Two forces impacts supply and demand?<br />The economic climate <br />Emotions in the market <br />

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