# First time investor - help please



## DJG (29 March 2010)

Alright, where do i start:

I have taught my self everything i know so far about the sharemaket.

I have $1,000 i am looking to invest, i will add more every week/month if i see myself succeeding.

Should i concentrate on sold company's or low share cost companies?

I am looking at a few IPO's and company's set to float:
A friend of mine has brought $1,000 of Bounty Oil - It look's like a good investment, IF all works out, he could turn his money into 20+ grand.

I just need some general advice for a beginner, i know most terms and can read a graph pretty basic.

Also:
I don't know which Online Broker to use, i currently own a ANZ bank account, was looking at Bell Direct and First Trade because of the low fee's.
I would rather find a broker that doesn't charge you for inactivity, if it does at least like 2 or 3+ months.

Thanks

Daniel

P.S Sorry if it looks like i am asking for financial advice, but what i mostly need to know is Which broker?

Thanks again


----------



## DocK (29 March 2010)

I'd suggest you visit the Beginners Lounge forum and start reading.  There is plenty of information there if you look for it.  Most of your questions will have been asked and answered in that forum before.  Good luck.


----------



## nomore4s (29 March 2010)

Hi Daniel,

While we can't offer specific advice on this site please read the start of this thread here which is based around a similar question to yours.

https://www.aussiestockforums.com/forums/showthread.php?t=19119

The problem with starting with only $1000 is fees will kill you - $20-$30 each way is a fair whack and puts you a fair way behind the eight ball to start with, better of saving while you continue to learn.

Also trying to turn $1000 into $20,000 like your mate betting on one share is a bit of a long shot, bit like winning lotto really. Will require a lot of luck as most of those types of shares never end up turning into truly profitable companies.

Good luck.


----------



## newbie trader (29 March 2010)

Hey Dang,

I dont think you should have the mindset that the stock market a get rich quick mechanism, rather i'd say it would be easier to lose your money than make it. 1000 into 20k is a 2000% profit and if you can manage that I will take my hat off to you. With your 1k youve got to look at brokerage (in and out). I use commsec which is 40 bucks in and out in total. So with your 1k investment youll need to make +4% to break even.

I use commsec as stated but Etrade, maquarie edge etc may be just as good so you should maybe go to their websites and compare their prices and what they provide.

N.T


----------



## Tatts (29 March 2010)

You also mentioned IPO's. Any that i have looked at required a min $2,000 investment. This is only from a couple so maybe others allow smaller min amounts?


----------



## Joe Blow (29 March 2010)

DJG said:


> Should i concentrate on sold company's or low share cost companies?




Daniel, please note that it is not permitted for those here at ASF to offer you specific financial advice. Nobody here can advise you what stocks to buy or how to invest your savings. Only a licensed financial adviser can legally provide you with this kind of advice.



DJG said:


> P.S Sorry if it looks like i am asking for financial advice, but what i mostly need to know is Which broker?




There is a whole subforum in the Trading/Investing Resources forum devoted to the discussion of brokers, including many threads that ask the very question that you have just asked. I would start working your way through the threads in there, as this is a topic that has been discussed time and time again.


----------



## DJG (29 March 2010)

Alright, i will probably add money to it each week, 50 dollar's isn't much, maybe more if i like it

Yeah, i don't reckon I'm going to "get rich quick" i know the consequences, but i am just using a example he is in a stock at 8c, the company predicts if all goes well, they will be at $2.20.

Which they probably wont, i'm just looking for some general info

EDIT:

Would i be better off putting my total bank account (bit over 10K) into a long term bank account?
Is there bank's that offer it for 6 months or less?
(I realise its not exactly long term, but it will have better rates)


----------



## shiftyphil (29 March 2010)

IF you do decide to start trading/investing with such a small amount - CommSec has an introductory free brokerage offer. Other broker's may have similar offers too.

See: http://www.commsec.info/onlineoffer/offer.aspx

At least you won't have brokerage eating your profits for the first twelve trades anyway.


----------



## sammy84 (29 March 2010)

It will be hard to add $50 a week when standard brokerage is around $20. High interest savings account sounds like the better option and a few days spent reading the beginner lounge.


----------



## coffee_snob (29 March 2010)

DJG said:


> Would i be better off putting my total bank account (bit over 10K) into a long term bank account?
> Is there bank's that offer it for 6 months or less?
> (I realise its not exactly long term, but it will have better rates)




There are term deposits for 3 and 6 months available if you don't mind locking your money away. There are also those online accounts which offer a lower interest rate (around 4.25% at the moment) if you want to have your money on call.


----------



## DJG (29 March 2010)

I arn't looking for HUGE profits, i know i am only investing $1,000
I have to start somewhere true?
If i do like it, i can add

I got until December is when ill need my money

Currently its in a ANZ V2 Account

Around 3% +/- interest currently


----------



## coffee_snob (29 March 2010)

DJG said:


> I arn't looking for HUGE profits, i know i am only investing $1,000
> I have to start somewhere true?
> If i do like it, i can add
> 
> ...




Did you read the thread posted in the link above? I am in the same situation except I have 2k. I know how utterly tempting it is to want to jump in. And I fully agree that we need to start somewhere. My thoughts were to start small so you don't lose big...

But I decided to hold off for a little while. My plan is to wait til I have 5k or at least 'know' a bit more about the market (by which time my money should have increased a little). 

It's a hard decision. I am not standing by my decision 100% because I know temptation can be a b*tch but I am trying to wait til I am a little more prepared.


----------



## newbie trader (29 March 2010)

IMHO you should maybe consider looking for a decent interest account. If you have a bank offering 5% then you'll need to make 9% on your shares to equal that. But DYOR and if you want to gain some experience then maybe the share market would be a good way to go so as you can hopefully move onto bigger and better things. But at the end of the day its your money.

N.T


----------



## nunthewiser (29 March 2010)

DJG said:


> I arn't looking for HUGE profits, i know i am only investing $1,000
> I have to start somewhere true?
> If i do like it, i can add
> 
> *I got until December is when ill need my money*





And there lies the problem.

The stock market is NOT a savings account............it actually has been known to make ones capital smaller also .

But i guess you know that.


----------



## DJG (29 March 2010)

nunthewiser said:


> And there lies the problem.
> 
> The stock market is NOT a savings account............it actually has been known to make ones capital smaller also .
> 
> But i guess you know that.




I'm talking about the Term Deposit


----------



## newbie trader (29 March 2010)

DJG said:


> I'm talking about the Term Deposit




Yes but if you need your money by Dec then nun's comment is still very on point.

NT


----------



## nunthewiser (29 March 2010)

DJG said:


> Alright, where do i start:
> 
> I have taught my self everything i know so far about the sharemaket.
> 
> ...






DJG said:


> I arn't looking for HUGE profits, i know i am only investing $1,000
> I have to start somewhere true?
> If i do like it, i can add
> 
> *I got until December is when ill need my money*






nunthewiser said:


> And there lies the problem.
> 
> The stock market is NOT a savings account............it actually has been known to make ones capital smaller also .
> 
> But i guess you know that.





Hence my post .

haveaniceday


----------



## DJG (29 March 2010)

I don't want it to be a savings account :s

where was that from?


----------



## coffee_snob (29 March 2010)

DJG said:


> I don't want it to be a savings account :s
> 
> where was that from?




?

Invest it then if you aren't interested in a high interest savings account or term deposit. If you feel its the right thing to do then go for it  whatever you decide let us know how it goes.


----------



## DJG (29 March 2010)

Yeah i did the maths, long term really isnt worth it:

a touch over 10K total right now

I need to keep 5K in the V2 account to keep it open

IF i was to put 1K into market, even if i wasn't only leaves me with 4-5 to put into Term Deposit.

Not even worth the hassle.

What would you regard as safe stocks?


----------



## newbie trader (29 March 2010)

DJG said:


> Yeah i did the maths, long term really isnt worth it:
> 
> a touch over 10K total right now
> 
> ...




IMO I would think putting 1k in wouldnt be worth the hassle. Trying to make profit after brokerage etc may become a headache, but again it is your money. Youre also spending time where you could be working or enjoying life pursuing something which may not work out or bring back small returns - all things you have to take into account (I read and invest as a hobby away from my social activites and study).

NT


----------



## Julia (30 March 2010)

DJG said:


> I need to keep 5K in the V2 account to keep it open



Do you?  I have less than that in a V2 a/c and there is no question of it not being kept open.



> What would you regard as safe stocks?



Will try repeating Joe's advice to you from earlier in this thread:



> Daniel, please note that it is not permitted for those here at ASF to offer you specific financial advice. Nobody here can advise you what stocks to buy or how to invest your savings. Only a licensed financial adviser can legally provide you with this kind of advice.


----------



## jaydebono (30 March 2010)

I think if you want to start small, its OK, but you have to view it as more of a learning experience then making money.

Its like you are paying to self-educate yourself, but you have to consider, would you learn more spending money on brokerage moving smaller amounts in & out of the market, or would you be better spending that money on books & educating yourself?

myself i am the type who learns by doing, so I did both, reading & investing.

i've got $50k aside to invest when I feel i want to be more serious, but I cashed some old leftover shares I was given when I worked for the bank which worked out to be 5k, i've split them up and done some seperate investments to try and put my learning so far in to practice.

Since january i'm up 20% so its been a good start but then it would be just as easy to drop 20%, not all my stocks are up but overall im up.

I try to categorize my investments as Long term, mid term & short term & do some research before purchasing into a stock.

as an example, i'm a customer of iinet and I follow there threads on a forum called whirlpool and they have been talking about releasing a new product for several years now, if they do it right it will be a massive product and help the company a great deal. 
(For those who follow iinet I am referring to the impending IIPTV release.)

So when I purchased shares in January i bought some with iinet in anticipation of this product they have stated they will be releasing by the end of march (1 more day to go!!!), so im hopeful of a good increase in the stock value and then I can exit.

I Make sure before I do any purchases that I have a plan, if I dont have a plan I wont know when to exit, because when the price is going UP I wont want to sell because you want it to go up more, and when its going DOWN I  wont want to sell because you want it to go back to where it was! 

I always Try to write down a price Iwill sell at, and a price I will exit at.

Sell = Taking profit and ending the deal
Exit = Cutting your losses and getting out of the deal before you lose more

For longer term trades I try to not worry about the stock day to day too much, in a major crash I might exit early but if its a 10% drop i wont worry because I know this is a long term thing, IE I had a stock which I picked up and it dropped 23%, I decided not to sell because it was a short term(1 day - 2 months) drop on a long term investment and in my plan I had decided that I would only exit if it got to -35% (in the short term).

Good news is that the stock is now up 22% from where I got it, so its looking good!  Of course it could drop down again... I will do a review at the end of financial year when they announce results etc and see how I feel about the company.

So anyway, the point I am making is, if you want to start small and feel it would be beneficial, make sure you do some research, make sure you are comfortable to lose the money if the market rolls that way, and be wary of tips from friends.

You always have choices, its up to you how you handle it!


----------



## coffee_snob (30 March 2010)

Jaydebono - you offer some fantastic advice. I myself cannot operate in life without plans. I am one of those really organised people with lists EVERYWHERE and a full diary of notes  So even though I am not trading as yet, I have this part sorted.


----------



## jaydebono (30 March 2010)

Thanks coffee.

I think its great that you have planned it that way, if you have a strict plan on paper that you follow it will help to avoid poor emotion based decisions.

I used to play poker online and not letting your emotion make your decisions is a big part of it, so i think that will help me as a trader.


----------



## newbie trader (30 March 2010)

jaydebono said:


> For longer term trades I try to not worry about the stock day to day too much, in a major crash I might exit early but if its a 10% drop i wont worry because I know this is a long term thing, IE I had a stock which I picked up and it dropped 23%, I decided not to sell because it was a short term(1 day - 2 months) drop on a long term investment and in my plan I had decided that I would only exit if it got to -35% (in the short term).




Why was 35% your exit point? Any significance? I know someone I think he mucks around with his super and maybe other savings not too sure. But he has never exited out of a share on a loss, hes had 100% win, its rather amazing.

NT


----------



## skyQuake (30 March 2010)

newbie trader said:


> Why was 35% your exit point? Any significance? I know someone I think he mucks around with his super and maybe other savings not too sure. But he has never exited out of a share on a loss, hes had 100% win, its rather amazing.
> 
> NT




Looks like some solid averaging. Sure hes never sold a loss but he could be holding telstra from $10.
The dangers of averaging...


----------



## Trembling Hand (30 March 2010)

jaydebono said:


> I used to play poker online and not letting your emotion make your decisions is a big part of it, so i think that will help me as a trader.




No it wont. If you're lacking skills or your plan has not got positive expectancy and applied to the right market no amount of emotional control will stop you losing money.

Loss of emotional control is a symptom rather than a cause. Mostly.


----------



## DJG (30 March 2010)

Jaydebono - Thanks for that, huge help

Yeah, i don't expect to turn my 1k into 5k in a week.

I am doing paper trading right now, i will do it for a while and see how i go, keeping track of every transaction, profits, everything.
Being as realistic as possible

I have brought Investing Online For Dummies, i realise there is plenty of books on share's but i want to try focus on just the ASX because, what's the point on getting something with wall stock when there using wall stock examples and everything.
So then it was a bit harder to find some just on ASX, ill buy some more once i finish this one.

I do however want to try and get into Comsec before that deal finishes, it will help me a hell of a lot, hopefully i can try go good while i don't have to pay brokerage, so it can cover for it after 12 trades.

I need to go get myself a tax file number today

I was thinking, going with dividends but really it isn't worth it with only 1K

So far i am going pretty shat in my paper trading, but i've been in it for less than 24 hours, i got hope.

I have foxtel so i can watch business channel whenever, it is interesting watching it.

Does anybody know of any real good blogs that get info daily, any real good websites or anything.

Thanks

Dan


----------



## Trembling Hand (30 March 2010)

DJG said:


> Does anybody know of any real good blogs that get info daily, any real good websites or anything.




This one. Have a look through the individual stock threads. Some good info on companies in there. Just don't fall for believing anyone else's opinion. Help it guide your own research.


----------



## enigmatic (1 April 2010)

This is in no way advice however while you are deciding to invest or not something like Bankwest Smart eSaver would be a good idea I'm sure other banks have similar accounts
doesn't matter how long you have your money in you get a min of 4% and 5.65% if you don't make withdrawals i also believe there is no min amount required.


----------



## Space Invader101 (2 April 2010)

Dangaff, your style of investing $1000k and adding $50 amounts sounds more suitable for managed fund investing.  You may want to consider looking up books or information online on the topic before deciding whether they're right for you. 

You can look up brokers on the ASX website: http://www.asx.com.au/resources/brokers/index.htm


----------



## WaveSurfer (2 April 2010)

coffee_snob said:


> There are term deposits for 3 and 6 months available if you don't mind locking your money away. There are also those online accounts which offer a lower interest rate (around 4.25% at the moment) if you want to have your money on call.




This netSaver is one of the best I've found so far

http://www.ubank.com.au/

5.85% with a bonus 0.1% if you throw $100 in each month. They're also offering 6.11% on a 6 month term deposit. It's a division of NAB too.


----------



## jaydebono (4 April 2010)

Trembling Hand said:


> No it wont. If you're lacking skills or your plan has not got positive expectancy and applied to the right market no amount of emotional control will stop you losing money.
> 
> Loss of emotional control is a symptom rather than a cause. Mostly.




Thanks for the tip, it depends on your skill level.

In lower level poker i'd say its generally the cause rather then the symptom, and in higher level poker its the symptom.

Undecided on trading so far, havent really felt the emotional feeling with trading, the same way I have with Poker.

I'll decide once i'm an experienced trader, so ill dig up this thread in 10 years and share my thoughts


----------



## jaydebono (4 April 2010)

newbie trader said:


> Why was 35% your exit point? Any significance? I know someone I think he mucks around with his super and maybe other savings not too sure. But he has never exited out of a share on a loss, hes had 100% win, its rather amazing.
> 
> NT




For me, it's a decision I make at the time of executing a purchase, I decide in my plan if its short/medium/long term, what my exit points are, everything.

For that particular trade and my assessment of the stock I felt 35% was an amount i was willing to hold out for and see a return, but no more.

I just got lucky it dipped the right amount, but not too much to cause me to execute my exit, you need a bit of luck in this game.


----------

