# Rate my Investment Plan



## dylan.lindgren (2 February 2010)

Hi all,

I have recently decided to start actively investing in the share market. I figure after the GFC hit in 08/09 now is a good time to get into the market to realize the maximum gains in the hopefully prosperous years to come. I have been passively invested in the share market since getting a bundle of 1475 shares in NHC in December 06 which my dad's broker recommended. I have seen these shares grow from being $1.30 when I got them, reaching a peak of about $5.80 before the 77c dividend hit last year and settling down to its current value of $4.48 (75% capital growth p/a without reinvesting dividends). The dividends alone have almost equaled the $2000 I spent initially and the capital gains are straight profit! This experience left a good taste in my mouth so I want to start trading more actively.

Here's the lowdown - I'm 23 years old - almost 24. I live in Sydney, work in the CBD and rent in Lane Cove. I have no debt. Obviously being so young I am free to take on a higher than average level of risk, as I don't have any debts/liabilities/dependents and have plenty of working years ahead of me.

I have read a book called 'Building Wealth in the Stock Market' by Colin Nicholson. This book was suggested by a user on this forum and is a great book. I am currently reading the book 'Online Investing on the Australian Share Market' by Roger Kinsky, which is also quite a good book which will hopefully give me more of a general overview of the Australian share market.

Everything I have read has said that it's important to create an investment plan before putting any money into the market. I have made one which I devised loosely based on the one provided by Colin Nicholson in his book. As I am still learning, and don't really know a lot about TA I am keeping it fairly simple at the moment and sticking with stuff that I know. After I have learned more I'm sure I will revise the plan to take into account my new knowledge. I know there will be a learning period where I will probably loose money, but if I get it out of the way while I am young then in a few years time hopefully I will have the knowledge and experience to start realizing meaningful profits.

Anyway, my investment plan is attached in PDF format. Your comments/suggestions will be greatly appreciated! There may be stuff in there that conflicts, such as aiming for a 13.3% p/a return or not buying stocks with a Debt/Equity ratio over 60, but aiming for medium to high-risk stocks. This is just carry over from Colin's Investment Plan which would have less risk built into it then I am able to take. I will adjust these things once I learn more about safe ways to choose medium to high-risk stocks, but for the mean time I will just go with what I know.

Thanks!

Dylan.


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## So_Cynical (2 February 2010)

On a 1 to 10 scale ill go 5.5 and you get half a point for a pretty write up.  would be great if you kept us informed about how your strategy is playing out....best of luck.


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## Tysonboss1 (2 February 2010)

Hey Mate,

Good to see your making a start.

One thing I thought I would point out is that you have called the thread "Rate my Investment Plan", How ever it seems your plan is more of a "Trading Plan" rather than an "Investment Plan"

Your Target is a return of 13.3%pa, This should be easily achievable using a buy and hold strategy without all the stress and fuss of timing entry and exits into and out of the market constantly.


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## brty (2 February 2010)

Dylan,

Your criteria is a little contradictory with itself. For instance how can something be "medium to high risk", yet have a debt to equity ratio of less than 60%, P/E ratio lower, Divs higher etc.

If you find them please post 

It's good to see you have a plan, but upon investigation I think you will see it needs changing.

Tyson,



> Your Target is a return of 13.3%pa, This should be easily achievable using a buy and hold strategy without all the stress and fuss of timing entry and exits into and out of the market constantly.




Your kidding aren't you?? Even AFI a professionally run investment company has only performed at 7.5% cap growth and a div yield of ~3% for a total return of 10.5% pa over the last 20 years

brty


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## Tysonboss1 (3 February 2010)

brty said:


> Dylan,
> 
> 
> 
> ...




My portfolio is running a dividend yield of about 8.5%, and should easily see capital growth of at least 5%. ( it's been over 150% in the last twelve months, I know that figure is mainly a one off though linked to the recovery)

If he is buying in at today's levels there are good companies with high dividend yeilds and low p/e's that should beable to return a total return of 13% atleast over the next 5 years or so.



there


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## dylan.lindgren (3 February 2010)

So_Cynical said:


> On a 1 to 10 scale ill go 5.5 and you get half a point for a pretty write up.  would be great if you kept us informed about how your strategy is playing out....best of luck.




Thanks mate, will do.



Tysonboss1 said:


> Your Target is a return of 13.3%pa, This should be easily achievable using a buy and hold strategy without all the stress and fuss of timing entry and exits into and out of the market constantly.




Excellent. Yeah I figure if I can find a few good performers like NHC has been for me over the last few years I'll be quite happy.



brty said:


> Dylan,
> 
> Your criteria is a little contradictory with itself. For instance how can something be "medium to high risk", yet have a debt to equity ratio of less than 60%, P/E ratio lower, Divs higher etc.
> 
> ...




Yeah I know some stuff will need changing. My mid to long term target is to invest in medium to high risk stocks, however my knowledge as to how to choose this type of stock is severely lacking at the moment, so investing in that type of stock would be just plain stupid. Once I know a bit more I will probably come back and amend the criteria I use for selecting stocks. At the moment though the trading plan has risk management built into it, in that I can only buy stocks that satisfy the lowest common denominator of rules in it - ie, I won't be investing in medium to high risk stocks until my knowledge is greater and I modify the rules to reflect this.

Thanks for the comments guys, I'll keep you posted.

Dylan.


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## new2stock (16 February 2010)

Hi Dylan i find your plan very interesting seems like you did a good job. not going to rate it as i am a begginer as well.

i have bought some shares in webjet i figured they were low priced and not too much risk involved as they seem to have a nice trend of staing level and rising very slowly. I guess for me they seemed unlikely to drop significantly over night or a few days.

anyway good luck in the market i hope one of us make something out of it.


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## So_Cynical (29 August 2010)

So_Cynical said:


> On a 1 to 10 scale ill go 5.5 and you get half a point for a pretty write up.  would be great if you kept us informed about how your strategy is playing out....best of luck.






dylan.lindgren said:


> Thanks mate, will do.
> 
> Thanks for the comments guys, I'll keep you posted.
> 
> Dylan.




6 months later and i guess its not going to well for Dylan :dunno: or he's so busy counting his money from trading profits that he has no time to post.


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