# Trading and investing primers for rank beginners



## doctorj (16 July 2007)

An older family member of mine has taken the decision to diversify their wealth away from just property by getting involved in the stockmarket. 

They are typically very hands on so would like to do this out outside of a managed or index fund type structure.  They're good with money, but outside of their old employee share plans have no experience with the market or direct ownership of shares.

I've pointed them along to the material available on the internet, particularly the ASX website, but they'd prefer to read the material in book format (easier on the eyes I guess). 

Can anyone help me out by recommending some good basic books aimed at people with no prior experience in the Australian market?


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## jammin (16 July 2007)

Doc,
I would recommend Nick Radges Adaptive Analysis.
Then, if they liked that and would like to go for greater detail (the full trading trip) try Tharps Trade your way to financial freedom.


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## doctorj (16 July 2007)

jammin said:


> Doc,
> I would recommend Nick Radges Adaptive Analysis.
> Then, if they liked that and would like to go for greater detail (the full trading trip) try Tharps Trade your way to financial freedom.



Both excellent books that live on my bookshelf, but probably a little too advanced.

I guess the questions this person is likely to be asking are things like:
How do I buy?
How do I sell?
Who am I buying from/selling to?
What is it I'm actually buying?
What costs are there?
How does the ASX work?
What are the tax implications?

Only then will they want to start thinking about the very important topics of risk management and entries and exits.


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## nizar (16 July 2007)

Doc.

For the basic basic stuff if they dont want to look at the ASX website, why dont you maybe sit down with them for half an hour with your PC and go through it with them?

Thats what i did with a few of my mates. Now they are champions that clean up more than me lol.

And then Van Tharp is a natural progression from there.


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## Awesomandy (16 July 2007)

I would think that it is best to work out what exactly it is that they want to achieve. This will help to devise the best strategy for them - high-volume spec. trades or holding bluechips for the long term? Aim for higher franked dividends or just large capital growth? 

The market is a big place, and there's something for almost everyone. I think of it as a bit like a driving trip. Work out where you want to go, how you want to get there, and then stick to the plan so you don't get lost out in the bush. 

And only then should you start looking at how to actually buy/sell shares and which broker to use, etc. Quite often, people can get overly excited, so I don't like to give people the power to buy/sell things until they are fully ready for it.


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## doctorj (16 July 2007)

Awesomandy said:


> Quite often, people can get overly excited, so I don't like to give people the power to buy/sell things until they are fully ready for it.



Indeed, and I'm also conscious of mixing money and family so I try to avoid wearing the mentor hat with family or friends.


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## CFD (16 July 2007)

doctorj said:


> Indeed, and I'm also conscious of mixing money and family so I try to avoid wearing the mentor hat with family or friends.




Also assuming they would be investing, they could subscribe to a newsletter such as The Intelligent Investor. They have a 3 free issue trial.


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## RichKid (16 July 2007)

doctorj said:


> ............
> .......
> Can anyone help me out by recommending some good basic books aimed at people with no prior experience in the Australian market?




Hi doc,

I suggest Roger Kinsky's Online Investing for the Australian Stockmarket (3ed 2007). 

It has broadranging coverage of the various brokers, products and major types of analysis (eg TA v fundamentals) in an up to date format, good for overseas investors and newbies looking to get a snapshot of the local market. Not exhaustive by any means but gets the job done. Hard to go past imo, you can buy it at the ASF bookshop, about $27. 

I also recommend doing the free online courses on the ASX site and getting some of the free booklets produced by the ASX- perhaps as a precursor to browsing the tonnes of material at www.asx.com.au.

As a next step, Chris Tate and Mike Lally also have some great chapters in their books, especially on risk and statistics, presented with humour and brevity. Anyone with experience in other forms of investing would appreciate their views. 

May I also suggest that you emphasise the importance of your relo's finding a method or style which suits their personality and financial profile? That way they wont just try to copy whatever it is you're doing. It also makes them look for something that suits their personality. 

That's my 2c worth, not sure if it's all relevant, hope it helps.


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## doctorj (16 July 2007)

RichKid said:


> I suggest Roger Kinsky's Online Investing for the Australian Stockmarket (3ed 2007).



Thanks for the tip Richkid, I've just placed an order for this at the ASF bookstore.


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## visual (16 July 2007)

doctorj said:


> Indeed, and I'm also conscious of mixing money and family so I try to avoid wearing the mentor hat with family or friends.




Doc, excellent point,

Book I`d recommend INTRODUCING the Australian Stock Market
ADAM STEELE and KEITH KENDALL Publisher Wrighbooks, I bought it at Dymocks. It`s easy to read and very basic.


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