When Some Investors Look at Stocks They See Dollars, Not Shares
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,656,430 (+0.65%)       Melbourne $994,677 (+0.27%)       Brisbane $978,777 (+0.15%)       Adelaide $878,311 (-0.89%)       Perth $857,374 (-0.27%)       Hobart $742,122 (-0.64%)       Darwin $666,990 (-0.54%)       Canberra $987,062 (-0.84%)       National $1,052,287 (+0.12%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $750,216 (+0.60%)       Melbourne $492,069 (-0.93%)       Brisbane $539,184 (+0.19%)       Adelaide $444,416 (-2.21%)       Perth $457,888 (+0.17%)       Hobart $527,154 (-0.12%)       Darwin $344,216 (+0.22%)       Canberra $504,424 (-0.33%)       National $530,515 (-0.07%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,120 (-121)       Melbourne 15,095 (-40)       Brisbane 7,990 (0)       Adelaide 2,438 (+11)       Perth 6,327 (-40)       Hobart 1,294 (-21)       Darwin 238 (+1)       Canberra 1,020 (+13)       National 44,522 (-197)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,780 (+4)       Melbourne 8,222 (-18)       Brisbane 1,619 (+1)       Adelaide 396 (-4)       Perth 1,599 (+9)       Hobart 213 (+10)       Darwin 400 (-6)       Canberra 1,003 (-24)       National 22,232 (-28)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $820 (+$20)       Melbourne $610 (+$10)       Brisbane $640 (+$3)       Adelaide $610 (+$10)       Perth $670 ($0)       Hobart $550 ($0)       Darwin $700 ($0)       Canberra $680 (-$10)       National $669 (+$5)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $775 (+$15)       Melbourne $550 ($0)       Brisbane $630 (-$20)       Adelaide $500 (+$5)       Perth $628 (+$8)       Hobart $450 ($0)       Darwin $500 (-$15)       Canberra $570 ($0)       National $591 (+$)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,426 (-22)       Melbourne 5,783 (+92)       Brisbane 4,042 (+149)       Adelaide 1,399 (+12)       Perth 2,345 (+25)       Hobart 383 (-2)       Darwin 94 (-10)       Canberra 595 (-9)       National 20,067 (+235)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,835 (+301)       Melbourne 4,537 (+107)       Brisbane 2,209 (+57)       Adelaide 391 (-8)       Perth 741 (-7)       Hobart 137 (+5)       Darwin 152 (-14)       Canberra 612 (+17)       National 17,614 (+458)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.57% (↑)      Melbourne 3.19% (↑)      Brisbane 3.40% (↑)      Adelaide 3.61% (↑)      Perth 4.06% (↑)      Hobart 3.85% (↑)      Darwin 5.46% (↑)        Canberra 3.58% (↓)     National 3.30% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.37% (↑)      Melbourne 5.81% (↑)        Brisbane 6.08% (↓)     Adelaide 5.85% (↑)      Perth 7.13% (↑)      Hobart 4.44% (↑)        Darwin 7.55% (↓)     Canberra 5.88% (↑)      National 5.80% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 30.3 (↓)       Melbourne 31.5 (↓)       Brisbane 31.7 (↓)       Adelaide 25.7 (↓)       Perth 35.4 (↓)     Hobart 33.7 (↑)      Darwin 36.2 (↑)        Canberra 32.0 (↓)     National 32.1 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 31.3 (↓)       Melbourne 31.9 (↓)       Brisbane 32.1 (↓)       Adelaide 24.8 (↓)       Perth 38.7 (↓)       Hobart 37.6 (↓)     Darwin 46.5 (↑)        Canberra 39.2 (↓)     National 35.3 (↑)            
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When Some Investors Look at Stocks They See Dollars, Not Shares

A new way of stock-market wagering is taking hold among younger investors who prefer to think about how much they can spend instead of how many shares they can afford.

By Julia Carpenter
Mon, Jan 18, 2021 12:00amGrey Clock 4 min

Purchasing a piece of Apple or Tesla once meant calculating how many shares you could afford to buy. That no longer matters. Now you can pay whatever you’re willing to spend, even if that amounts to pocket change.

Thinking primarily about dollars instead of shares represents a dramatic shift in the world of personal finance, posing new opportunities and risks for investors. The practice is gaining momentum thanks to the widespread adoption of fractional trading—which allows investors to purchase slivers of traditional shares—as well as an industry push to reduce online trading fees to zero.

These twin developments made it easier and more cost-effective for new investors to wager as little as $1 on stocks. The volatility of the coronavirus pandemic then turbocharged these bets as market leaders like Apple Inc. and Tesla Inc. soared into the hundreds or thousands of dollars. The S&P 500, meanwhile, is up 73% since its intraday low point in March 2020.

The lineup of wealth managers catering to dollar-focused investors is spreading from upstart online brokerages that rely on flashy apps to industry stalwarts that have longstanding bricks-and-mortar offices around the U.S. One of those giants, Fidelity Investments, launched a service early in 2020 called Stocks by the Slice allowing investors to purchase fractional shares for the first time. When Stocks by the Slice launched last February, 75% of the buy trades from investors using the service were in dollars on average. This month Fidelity now says that figure is closer to 85%.

In the future “retail investors will be thinking 100% in dollars, not in shares,” said Scott Ignall, head of Fidelity’s retail brokerage business. “Clients no longer need to use a calculator to figure out how many shares of stock they want to buy.”

Advocates say the dollar-first approach is helping democratise access to the stock market and open the wealth management industry to a new wave of investors. There are also dangers. Some say the strategy could encourage risky speculation that some analysts and academics warn will end with individuals losing money. Thinking in dollars, some worry, will distance new investors from their investments or inhibit their greater understanding of market moves.

“If you give people a smaller sandbox to make mistakes, they’ll still make mistakes,” says Larry Harris, former chief economist for the Securities and Exchange Commission and professor of finance at the University of Southern California’s Marshall School of Business. “But also when you make mistakes, you can learn at a lesser cost.”

The ability to pay micro amounts and hold fractional shares when purchasing stocks isn’t necessarily new. Investors have long paid little for penny stocks and small-cap stocks, while others have been able to amass portions of shares through dividend-reinvestment plans. What is new is the ability to freely trade partial shares during market hours. Brokers like Fidelity and Robinhood Markets Inc. can now execute fractional orders immediately, much as they execute ordinary orders to trade stocks or exchange-traded funds.

“Surely, people had to think in dollars before,” Mr Harris said. “Now, they just don’t feel the constraints.”

That is the case for James Evans, a 29-year-old bar and night club manager in Manchester, England. When the pandemic hit Manchester, he was furloughed with more time on his hands to think about his personal investing strategy.

Mr Evans uses Trading212, a London-based trading app, to “build his own ETF,” as he puts it, with fractional buys. He said thinking in dollars gives him more freedom to diversify his portfolio and establish a stronger position.

“This has given me a lot more time to look at what I’m doing, as opposed to just kind of winging it,” he said. “The pandemic has kind of helped that, just in a weird way.”

Robinhood, which was founded in 2013, is one of the biggest beneficiaries of this shift. Its free app now has 13 million users with a median age of 31. Investors can start investing for as little as $1, but the most commonly-traded amount on Robinhood’s recurring investment feature—which makes investments in dollars—is $10 every week.

Account holders “want to not do the math,” said Madhu Muthukumar, head of product at Robinhood.

Robinhood’s recurring investments option allows users to put a set amount of money toward given investments on a weekly or monthly basis. The company says the feature was in response to users who aren’t day traders but wanted an investment option they could build into their otherwise low-tech financial lives.

Larger rivals are now embracing the same approach. Last June Charles Schwab Corp. launched a fractional-trading program called “Stock Slices” that had nearly 190,000 accounts as of December. Schwab estimates the average Stock Slices user is younger than its average brokerage customer. Their average buy order is $275, according to Schwab, still well below the going stock price of companies like Tesla and Netflix Inc.

“We’re seeing growth across all kinds of clients, but we have seen a lot of growth in our younger user base,” said Fidelity’s Mr. Ignall. “We do think that this new way of investing has definitely contributed to that growth.”

For Mr Evans, the 29-year-old nightclub manager, thinking in dollars as opposed to shares demystifies the process. He employs dollar-cost averaging, a strategy that invests the same amounts of money at regular frequencies over time, to build his portfolio. This strategy makes it easier for novice investors to set up their investments with the amount of money they want to spend—and it is also often the only option available to younger, newer players who don’t have lots of money to invest in the market.

“Especially when you’re dollar cost averaging, it’s a lot harder with whole shares, because if the whole share is quite a lot, you have to make your dollar-cost averaging more spread out,” Mr. Evans said. “If you can’t do fractionals, you have to just buy one share, which could be, you know, $100. Then you have to make sure you time it so that it fits your investing time frame.”

But as Mr Harris points out, all investors should be thinking about dollars in some capacity. Stock prices can go up and down depending on the total value of a company’s equity or the amount of shares left to buy.

Ultimately, Mr Harris said, the best way to purchase stocks is a personal decision for many investors: “Do you feel richer owning the number of shares you own or the dollars you own?”



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Surveys point to a fresh acceleration in the U.S., even as growth in the eurozone strengthens

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Global economic growth is becoming more broad based, with surveys indicating that business activity in both the U.S. and the eurozone gained momentum in May.

The eurozone economy contracted in the second half of 2023 following a surge in energy and food prices triggered by Russia’s invasion of Ukraine, and the subsequent rise in interest rates intended to tame that inflation.

By contrast, the U.S. economy expanded strongly over the same period, opening up an unusually wide growth gap with the eurozone. That gap narrowed as the eurozone returned to growth in the first three months of the year, while the U.S. slowed.

However, surveys released Thursday point to a fresh acceleration in the U.S., even as growth in the eurozone strengthened. That bodes well for a global economy that relied heavily on the U.S. for its dynamism in 2023.

The S&P Global Flash U.S. Composite PMI —which gauges activity in the manufacturing and services sectors—rose to 54.4 in May from 51.3 in April, marking a 25-month high and the first time since the beginning of the year that the index hasn’t slowed. A level over 50 indicates expansion in private-sector activity.

“The data put the U.S. economy back on course for another solid gross domestic product gain in the second quarter,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

Eurozone business activity in turn increased for the third straight month in May, and at the fastest pace in a year, the surveys suggest. The currency area’s joint composite PMI rose to 52.3 from 51.7.

The uptick was led by powerhouse economy Germany, where continued strength in services and improvement in industry drove activity to its highest level in a year. That helped the manufacturing sector in the bloc as a whole grow closer to recovery, reaching a 15-month peak.

By contrast, surveys of purchasing managers pointed to a slowdown in the U.K. economy following a stronger-than-expected start to the year that saw it outpace the U.S. The survey was released a day after Prime Minister Rishi Sunak called a surprise election for early July, banking on signs of an improved economic outlook to turn around a large deficit in the opinion polls.

Similar surveys pointed to a further acceleration in India’s rapidly-expanding economy, and to a rebound in Japan, where the economy contracted in the first three months of the year. In Australia, the surveys pointed to a slight slowdown in growth during May.

Businesses reported that they were raising their prices at the slowest pace since November, which should reassure the European Central Bank. However, the eurozone continued to add jobs in May, suggesting that wages might not cool as rapidly as the ECB had hoped.

The ECB released figures Thursday that showed wages negotiated by labor unions in the eurozone were 4.7% higher in the first quarter than a year earlier, a faster increase than the 4.5% recorded in the final three months of 2023

The ECB has signalled it will lower its key interest rate in early June, while the Fed is waiting for evidence that a slowdown in inflation will resume after setbacks this year.

Nevertheless, eurozone businesses and households shouldn’t bank on successive cuts to borrowing costs, ECB Vice President Luis de Guindos said. “There is a huge degree of uncertainty,” he said. “We have made no decisions on the number of interest rate cuts or on their size,” he said in an interview published Thursday. “We will see how economic data evolve.”

Continued resilience in the eurozone economy would likely make the ECB more cautious about lowering borrowing costs after its first move, economist Franziska Palmas at Capital Economics wrote in a note. “If the economy continues to hold up well, cuts further ahead may be slower than we had anticipated,” she said.

– Edward Frankl contributed to this story.

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35 North Street Windsor

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