For my investment purposes I’ve tended to put my money into property. I know it is not every ones cup of tea and increasingly the figures do not look like they stack up. For me it’s been the easier option, mainly because it’s what I know.
I have put aside about $100k to have a go at alternative investment strategies. Trouble is that I really do not know the best approach, given my limited exposure to the share market. You’ll often hear advice that will tell you to steer clear of what you do not understand, that said, you have to start somewhere.
I do like to have a go myself, so I’m not sure just plonking it into a low-yield managed fund would be quite the thing for me, but neither do I see myself as a day trader. Somewhere in between perhaps.
Can anyone offer ideas for a good starting point in terms of educating myself, as there really is a lot of crap out there that confuses the issue?
Hi Badger
Investing in the stock market has similar parallels to investing in property.
You would never jump in and buy the first property you saw or becuase you like the name of the street so due your due diligence on a company before you buy its shares.
Secondly identify you risk profile. I say to all of my clients they have to be confortable in where they pitch their risk. Are they after long term steady growth or an income or a combination of both. Do they want direct exposure or a general spread across a sector of companies.
Once you identify some of these areas you can see whether direct share investment or a managed fund is they way you want to go.
One thing i would certainly do if trading is new to you and that is stick my $100K in an offset account and then papertrade for say 3 -6 months and see how you go.
Write down exactly what you would have purchased and the reasons why. Whether you use fundamental or technical analysis in the end the exercise is a great learning curve.
Remember most lenders limit the amount of borrowing they lend against a parcel of shares to circa 65-80% whereby you can go upto a 100% borrowing in property. Secondly the markets tend to move more rapidly in either direction and gearing will extenuate both your profits and losses.
Read up on as much as you can. There are many great free website and regular publications which you can read and learn from.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
No need for papertrading – just get yourself an online service such as E*Trade, chuck a few grand in and make a few small trades – see how it works, feels and get to know how you react to the contrasting forces of fear/greed/gut/advice etc. I guarantee, it won’t be what you expect. Be sure to use conditional orders to limit your inevitable losses at this point. With small share parcels (say $2k), the costs of buying and selling will often outweigh your gains, but it’s a small price for hands-on learning.
Also have a read of WayneL’s Trading Pages. Well written, focussing on trading psychology.
I’d avoid managed funds as much of the market is overpriced (IMO), and most have some exposure to property/trusts. Pick a couple of areas you expect to do well, then search for a share that you like, using technical analysis or fundamental analysis or a hot-tip or a gut-feel or a combination.
Be sure to read financial papers / websites or magazines for a range of views & news.Good Luck!
F.[cowboy2]The above should be assumed to be general advice and nothing more than that. No consideration was given to the specific needs of Mr/Mrs Badgers_R_Us. I am not licensed to give financial advice and have only limited (though rewarding) experience in share trading. I’m not about to give up my day job…
Speak to a licensed financial advisor if you require (Expensive & Biased) advice tailored to (Leave you destitute and with a multitude of) specific needs.Foundation and Richard, some good tips and advice, thanks.
Richard, I’d welcome suggestions re any sites you could recommend.
Cheers, M.
Hey Badger,
I agree alot with what the past two post have mentioned..
First step is to break it down into the basics like:
What are you prepared to lose?
What areas of the stock market are you looking at gaining exposure too (eg what industries, countries, companies)?
Whats your timeframe and desired returns?I recently tried a trial subscription to intelligentinvestor.com.au. Can’t recommend their investment recommendations as I haven’t looked into any but found the general information on companies, trends, events and so on really easy to follow and interesting – I don’t trade myself but its good to keep up to date for work.
But to start with might try asx.com.au (the aussie stock exchange). Great info for beginners like us and u can download a pdf somewhere that gives you the basics (think I got it saved somewhere if you cant find it)
One last tip – dont pay for anything. Use all the free trials and to subscribe to the free email newsletters – its a wealth of info.
Dont get caught up in the hype. Just because the Aussie stock markets performed well recently doesn’t mean it will continue to.
TAKE YOUR TIME.
Hope that helps.
PS. The above is general information and should not be considered advice of any nature. It does not take into account any personal needs, goals or objectives of any individual.
Bagder
Gotta to be honest as Financial Adviser i find foundations comments amazing.
Firstly not all FA charge an arm and a leg and i would be looking to work with someone on a payment for performance basis.
Secondly when your investing in quality stocks (and i presume with 100K you intend to stick to the ASX 200 rather than speculative tech or mining stocks) the last thing you would do is “open an online service such as E*Trade, chuck a few grand in and make a few small trades – see how it works, feels”
Papertrading is an excellent way of getting to now the market, the players in it and experiencing the high & lows of share trading without having to risk capital.
Never use a hot tip or gut feel unless you have carried out due diligence on the stock and the reasons behind why you intend to invest in it.
A few websites you might like to look at would include http://www.asx.com.au and free to subscribe sites like http://www.abn.com.au.
The above should be assumed to be general advice and nothing more than that. No consideration was given to the specific needs of Mr/Mrs Badgers_R_Us. I AM licensed to give financial advice.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
Sorry Mr Qlds, I was just kidding… should’ve used a [biggrin] or 3! I agree with property WA – don’t pay for software and data feeds (available free)/ systems (free and or bogus) /seminars etc.
The suggestion that actual trading is better than paper trading is based on experience. Paper trading can be useful, but it does not expose you to the emotional/psychological forces. Small actual trades do. As for the ASX200, I believe many are currently overvalued and better picks can be found elsewhere. ^*Opinion only*^… but then I sold a bunch (about half) of my [junior miner] GDR shares on Tuesday for a tidy 30% profit in a month. (Bought .205 on 17/11, sold .260 & .270) Minus trading costs and CGT. Not enough to replace my 9to5, but handy, fun & educational.Originally posted by foundation:Sorry Mr Qlds, I was just kidding… should’ve used a [biggrin] or 3! I agree with property WA – don’t pay for software and data feeds (available free)/ systems (free and or bogus) /seminars etc.
The suggestion that actual trading is better than paper trading is based on experience. Paper trading can be useful, but it does not expose you to the emotional/psychological forces. Small actual trades do. As for the ASX200, I believe many are currently overvalued and better picks can be found elsewhere. ^*Opinion only*^… but then I sold a bunch (about half) of my [junior miner] GDR shares on Tuesday for a tidy 30% profit in a month. (Bought .205 on 17/11, sold .260 & .270) Minus trading costs and CGT. Not enough to replace my 9to5, but handy, fun & educational.Got to agree with foundation, been trading for a few years, more so in options, & papertrading was nothing like live trading. Actually found it a waste of time. If wanting to buy shares same advise research of the co. if buying blue chips & using options as insurance if the market turns to minimise loss. Louise Bedfords books are great for basic understanding of options worth a read for the novice. I don’t go to work as am a carer for a relative, but have made consistant money trading options for the last few years. Also into property always find the forums interesting reading.
Juls
Stuffed up there with that last reply. Have to say that this site could do with some usability design. The icons are too small and are not intuitive. As a previous user of the site I am aware of the functionality available, but as new user this functionality would be somewhat hidden.
I understand that paper trading is far from real life as it lacks any real emotional context, but on the other hand one could end up making some costly mistakes. Do you think a permutation of the two – perhaps 3 months or so paper trading to become familiar and then move into a 2nd phase of a few small trades in order to figure out my trading psychology?
Sorry Badgers_R_Us, I can only speak from personal experience about papertrading. All I can say is that researching & watching a list of stocks is a good idea for 2-3 mths but papertrading them is easier when money is not on the line. Emotion is a BIG factor when things are live, don’t underestimate your own feelings when money is involved, be it shares or property. As with property there are always at least two players in a market. (the buyers/sellers)
Research & watch the shares you are interested in until you are comfortable placing a trade good luck with your adventureJuls
From my experience I would not trade using fundermental analysis only technical. You may make a few profits but for long term trading technical is the best in my opinion. I agree on the psycholigical side off it plays a part. Using a technical system minimises this and makes trading easier and quicker. I also believe backtesting is important. Have a look at hometrader.com .I find them to be quite useful.
This is only my opinion based on limited trading. Good luck!For advice on share investments I would not recommend people whose main focus is property which is a very illiquid market in total contrast to shares, Forex, commodities and Options/futures just ask the Japanese broker who caused the Tokyo exchange to shut down because of a keyboard mistake in executing a trade this month. I have actually have more invested in Shares and managed funds than property but i have experts managing most of it for me whilst I dabble in the areas that I am knowledgeable on. It depends on how aggressive/defensive you want to be as you can actually be very conservative in the market and what level of exposure you are looking at.
Just my two pennies worth
when the going gets weird the weird turn pro
hi Badgers_R_Us
I’m in the same boat, so your not aloan.
I organised with a couple of broker firms here in sydney tolhurst is one and they do free seminars to get trading advice,then off to a couple of trading programmes learnt all about them, stockdoctor etc then organised to watch the markets and I have 4 folders for homework, that I read on my last 6hr flight back last sunday and I’m going with a company called man financial(.com for there site) and I’m looking at the cfd markets, high risk with leveraging and no I haven’t traded before, Its a interesting market and have a bit to go yet looking at the middle of jan to give it a go.
the guy who was doing the seminar at one of the company now runs the tokyo dept and he has given me a trader here in sydney that is working with me. just like property understand it before you pay for anything.
let me know how you go.
In the high risk option and futures you have to structure to lose and the gains are better.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]There is an interesting questionnaire about your investing profile on
which claims to tell you your investing IQ.
Also check out this gem from Techa posted on Aussiestockforums
with a great analysis of the post By GreatPig
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculatorhi redwing
like the post. two questions nothing to do with this post but.
a. i posted once if nayone knew some good other boards not just property the aussie stock seems like that type of board maybe others have some.
and b why do all the boards other then this one have the same design and format somersoft,australian post investor, invested,and this aussie stock forum it must be generic platform any insight from you.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Agree it must be generic/easy
I like the way you can “preview” posts on some other sites rather than having to open them all..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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