FAQ
I had an account with Rivkin Discount Stockbroking, can I use this to trade?
Rivkin Discount Stockbroking (later Avcol Securities) was taken over several years ago. Rivkin Securities Pty Ltd is a new company and requires a new client application in order for you to start trading.
If you are looking for details regarding your trade history from either Rivkin Discount Stockbroking or Avcol Securities, you should contact the broking arm of the Commonwealth Bank.
Do I need to open an account to trade?
Yes. Filling out an application form is simple. You can do this by phoning our office on 1300 RIVKIN (1300 748 546) or clicking "Open an Account" at the top of this page.
How long does it take to open an account?
We require a signed, original application form and a certified copy of your identification (such as a driver's license). Once we receive this, it usually takes 48 hours to open an account.
For company and trust accounts, we require copies of additional documentation. The required documentation can be found on the application forms.
Can I trade online?
Yes. Please view sample images and information from our trading website by clicking here. Rates for our online and phone brokerage can be viewed on our pricing page.
How do I pay for trades?
Unless settling to a margin lending account, all Rivkin Securities accounts settle to Rivkin Securities Cash Accounts. These are very simple accounts with no ongoing fees that allow our dealers to check your funds and hold those funds when an order is placed.
You can put funds into your trading account by BPay, electronic funds transfer or cheque.
Do I need a minimum balance in my trading account?
No. The Rivkin Securities Cash Account is an interest-bearing account, so most clients are happy to leave cash in their trading accounts for simplicity. Please read the Rivkin Securities Cash Account PDS by visiting the 'Open an Account' page.
What is the minimum I need to trade?
You must buy at least $500 worth of shares if you do not already own shares in that particular company. Once you have a parcel of shares worth $500, you may add to it or sell in any increment.
Should I borrow money to invest?
Since each investor's situation is unique, advice must be tailored to suit their particular needs. As a general rule, the stock market is inherently risky and volatile, and you should only risk what you can afford to lose.
There are times when using debt in the market is appropriate, but it is the domain of the more experienced investor. If you do not fully understand the high-risk nature of leveraged positions, you should avoid using debt.
The simple answer is just to be careful when it comes to borrowing. As Warren Buffett, arguably the world's greatest stock market investor, says, 'debt is a dagger attached to the steering wheel, pointed at the heart of the driver'.
What is CHESS?
Previously, when you bought shares through your broker, you were issued with a share certificate (known as scrip), which was evidence of your ownership in the company.
These days, however, this is all taken care of by CHESS (Clearing House Electronic Subregister System), which enables shareholders in listed companies to receive statements advising them of their holdings. Because this system is electronic, ownership of shares can be transferred without having to rely on paper documents.
All share transactions are made easy with CHESS. Prior to CHESS, your broker couldn't sell your shares until you sent them the share certificate. Now, they will ask you to sign a CHESS sponsorship agreement, which means they can buy and sell shares a lot more easily on your behalf.
Another important benefit is the ease with which you can accept a takeover bid for shares you own in a target company. Rather than filling out a myriad forms, you can simply have your broker accept the bid on your behalf. They will require a signed authorisation, but the process is made very easy with CHESS.
A holding statement is issued to you whenever the amount of shares you own is changed by either a sale or a purchase of shares.
What is a HIN?
You also have a HIN (Holder Identification Number). This HIN will be the same number for holdings with your CHESS-sponsored broker, no matter what the shares. If, however, your holdings are issuer-sponsored (individual companies send you a share statement as evidence of your ownership), then you will receive a different HIN for the holding you have in each different company.
The CHESS system speeds up settlement (the payment or receipt of funds after a buy or sell) and transfer of all transactions.
How many shares do I buy?
It is impossible to recommend investing a specific amount in a share. Some investors have $4000 to invest, while some others may have $400,000. Furthermore, different investor profiles require different consideration in terms of capital allocation.
As a general rule, never put much less than roughly $2500 into one investment. If you have $9000 to invest, you might put $3000 in three stocks. Never invest $1000 in nine stocks, as the cost of brokerage will take the lion's share of any profits.
Paying $30 to buy and $30 to sell (with a non-advisory broker) means that if you buy $1000 worth of shares, the shares will have to go up 6% before you break even ($60 brokerage is 6% of your $1000 investment).
Something to remember when buying is that the cheaper the brokerage, the smaller amount you can get away with investing without brokerage taking too large a share of profits. Therefore, the minimum figure of $2500 can be lowered slightly if buying online.
The figure of 1% might be an easier guide to follow. Try not to spend more on brokerage than the value of 1% of your investment. Therefore, if you are spending $2500 on a trade, try not to spend more than $25 on brokerage. The $2500 rule does not take into account how much brokerage you are paying, whereas the 1% rule applies across the board.
How to apply for a Share Purchase Plan or Entitlement Offer?
As long as one buys before the ex date of the Share Purchase Plan (SPP) or Entitlement Offer, they will be on the share register in time and will receive documentation from the registry pertaining to the capital raising. They then simply need to fill out the application form and make payment as per the instructions by the due date. This can usually be done via Bpay, cheque, bank draft or money order.
When starting out, is a $70 share too expensive to buy?
This is one of the biggest misconceptions that investors have when new to the market. It is important to understand that you can buy a $70 share as easily as you can buy a 70c share. This is an important point to consider. People say things like; 'I can't buy shares like Rio Tinto or Macquarie Group because they cost too much.' They believe they don't have enough money for shares above $10, for example.
This is wrong. Whether you spend $5000 by buying 104 Rio Tinto shares at $48, or 3760Asciano Group shares at $1.33 a share, it doesn't matter. It's all percentages. People think that it's easy for a 20c share to go to 40c and hence, make a 100% return. The truth is that it's as hard as a $20 share going to $40. People think that moving 20c is easy, but moving $20 is impossible. Wrong. It's not dollars, it's percentages. That 20c is a 100% move and that $20 is also a 100% move. The gains are both the same.
Investors often feel more important owning many thousands of shares rather than some tens of shares. The best example to demonstrate that the number of shares you own is irrelevant is as follows. Warren Buffett's company, Berkshire Hathaway, is trading at around $US87,000 a share as at July 2009. Who wouldn't like to own even one share of that company!? So it's not about how many shares you own, it's about the dollar value you invest.
Accordingly, one should make investment decisions based on the quality of the shares, not the price at which they're trading. A $70 share is not 'richer' than a 70c share. It all depends on how many shares are on issue.
This is an important point to understand. Most people believe that if Telstra trades around the $3.40 range (as at July 2009), when Rio Tinto trades around the $48 range (as at July 2009), then Rio Tinto is 'richer', or valued higher, than Telstra. However, it depends entirely on how many shares are on issue. Telstra has about 12.4 billion shares on issue, and hence, it is capitalised at about $42bn (amount of shares multiplied by the share price); whereas Rio Tinto has shares on issue to the tune of about 457 million, which capitalises it at about $22bn. So despite Telstra's share price being almost one-fourteenth of Rio Tinto's share price, Telstra is worth approximately $20 billion more than Rio Tinto (as at July 2009).