How technology can make investing easier
Almost everyone in Australia owns shares – either directly or through a superannuation fund. Yet for the average investor, the stock market is as much a mystery today as it was 100 years ago.
According to popular books and movies like the Wolf of Wall Street and The Big Short, financial markets are a jungle playground for the greedy and dishonest. Certainly not a place where individual investors can build wealth!
Thankfully this isn’t true. We live in exciting times and technology is changing ‘the way things always were’. It is quickly breaking down barriers, and the stock market is no exception.
OnMarket is one company that is developing technologies to open up the world of investing. Launched by Prime Minister Malcolm Turnbull, OnMarket has been described by Self-Managed Super Magazine as “the new app to unlock SMSF capital” and by Intelligent Investor as giving “retail investors a chance to finally get treated as equals.”
Here are the three exciting ways OnMarket can help you invest.
1. Bringing investment opportunities to you
Before technology came to capital markets, brokers were the gatekeepers of information. Now, you can be notified of an investment opportunity, review the offer, and invest while you’re on the bus, enjoying a cup of tea on your verandah, or relaxing in your lounge room.
OnMarket has partnered with independent research providers such as FatProphets, Morningstar, and Wise Owl. When an offer is posted, you will be notified immediately.
The offer is also often accompanied by a third-party research report to give you important external perspectives on the opportunity. That is in addition to the prospectus, investor presentations, announcements, and video interviews with management that are also posted at the time the offer launches.
Best of all, the information is free. You can access all of this from your phone or desktop – anywhere and anytime. Whatever suits you.
2. Giving you fair access to investment opportunities
Initial Public Offerings (IPOs) are often lucrative. Yet it is IPOs that most investors have typically avoided knowing that institutional investors are most often the ones who get access while ordinary investors are given the short end of the stick.
For example, in the case of Medibank (the largest privatization of public assets since Telstra in 2006) retail bids over $14,000 were allocated $0.05 of every $1 above an initial $7,150 allocation. To put that into perspective, the average SMSF balance is $1,000,000. The scale-back applied to institutional investors was never publically disclosed.
Now, technology is changing that imbalance. OnMarket bring IPOs to everyone on the same terms.
As David Potts of SMH Money says: “The beauty [of OnMarket] is every bid is treated equally. If a stock is oversubscribed, everybody is scaled back by the same proportion. There are no favorites.”
3. Leveraging technology to give you a voice
Did you know that Australia’s total superannuation money could fund the capital requirements of every company listed on the ASX for 15 years? Australia’s 1 million strong self-managed superfund members are a powerful group – and technology is finally giving them, and all investors, a voice.
OnMarket campaigns were designed to bring people power to the capital markets. We post IPO campaigns that investors can vote for - and when we have enough votes, we bring the votes to the company to convince them to make the offer available to everyone. So, the more investors vote, the more powerful our case to the company.
We post IPO campaigns that investors can vote for – and when we have enough votes, we bring the votes to the company to convince them to make the offer available to everyone. So, the more investors vote, the more powerful our case to the company.
Currently, we have the IPOs of LJ Hooker, Pepperstone, WiseTech Global, Carbon Revolution, as well as the mooted government asset privatizations of NSW electricity assets and WA/VIC ports up on the site.
The aim is to bring every IPO to every investor on the same terms as the big end of town.
What questions do you have about investing? Join the conversation below.