My Journey To Financial Independence

[Ariyahn2011]

Firstly, I hope you guys dont mind me sharing my investment journey with you. I saw some others doing it and I thought its a nice way to share personal experience and also welcome other opinions and cautions.

Personal Details

Age: 27
Status: Married, with 1 3yo.
Salary: Personal Income $40K - Disability Sector (not including my wifes income combined income of 90K approx).
Assets in rank of liquidity:

- Cash: $530000
- Shares: $17000
- Emergency Fund: $100 (just started one)
- Car: $12000
- Savings per month: $2000 (split $1000 cash / $1000 Shares)


Debt

- Car Loan $5332 (approx)


Current Strategy

I have been involved in the stock market since I was 18 years old. I made some terrible choices and put alot of money into small caps with the view of holding long term. At the time it was $10,000 but my income was obviously really small AND it was on debt.

Stocks I failed On

I failed on SBM, CFU, OEL and AYN (No longer listed). I have not technically 'failed' on CFU and a couple others since I have not technically sold them yet but they have lost about 97% of their value since interception lol.

I have since been taking investing more seriously by reading "Investing for Dummies, The Intelligent Investor, etc". I realise I wont become independent by just working 9-5 given my income therefore I wanted to change my whole strategy since the hits as a young bloke and decided I would stick with bluechips/growth stocks particularly with the tech sector. And, perhaps only allocate 10% to small caps, because lets face it they fail more than suceed (at least in my experience).

Goals

1. Build a strong portfolio in strong companies over a 10 year outlook.
2. Buy on dips, particularly when major events happen such as the GFC.
3. Continue to educate myself and learn from more experienced investors.
4. Become a financially strong family so my son can enjoy the things I was not able to afford when I was young such as overseas travel,school camps etc.

Asset Allocation:

75% Cash
25% Shares
- AU - $8,530.04
- US - $6,513.98
- Cash in account: $962 approx.

Current Portfolio

-/+ in %

AYN: -99.10%
BHP: +4.58%
CFU: -89.71%
EGO: -80.65%
ETPMAG: +3.84%
FLT: +5.40%
RIO: +7.38%
STO: +13.18%
FEYE: -8.12%
NEON: +18.40%
ORB: -1.77%

I decided I would purchase in $2000 blocks which therefore means I will purchase montly, however I really want to attempt to purchase on corrections and obviously if there is a massive correction then I would get hold of the savings (such as the GFC).

Still looking for an entry into some good tele companies (TLS comes to mind) and also some good companies in the food sector. WOW comes to mind and WES. But I am still learning and trying to be a bit more conservative. AYN, CFU and EGO were the shares that I held from 2010 and beyond. I sold out of some the other ones mentioned above which I bought when I got my first job (SBM etc).

I realise its not a perfect portfolio and I do wish to improve on it and get into some more sectors such as food.

Currently I have been watching: TLS, WOW, WPL, WES and would love to get into some banks one day when we get some GFC equivalent prices.

Thanks for taking the time to read, I will update accordingly if thats okay with you as there is no set rules with my stategy and I just buy whenever the markets are falling and as you cant the time market perfectly I just do the best I can .

(Credits go to Ryan C as I borrowed your layout when presenting my information).

 

[Julia]

I started to have a look at some in your p/f:

According to Etrade, FEYE, ORB, NEON are not valid codes.

Of the others, what was the reason you bought them?

 

[tech/a]

I started to have a look at some in your p/f:

According to Etrade, FEYE, ORB, NEON are not valid codes.

Of the others, what was the reason you bought them?

NYSE and Nasdaq

 

[Ariyahn2011]

I started to have a look at some in your p/f:

According to Etrade, FEYE, ORB, NEON are not valid codes.

Of the others, what was the reason you bought them?

FLT: Went for flight centre because I felt it was oversold on a profit downgrade on the 18th. Not sure if you had a look yesterday but it was down 10%. Not surprisingly, it was up 5% today. It is on a technical downtrend but as I mentioned before its impossible to pick the bottom. I put in an order and assumed it would not get filled. I also picked them because they very low debt and a dividend yield of 4.9% which is pretty nice to have. Its a strong company with good management. I also picked them because they are a bluechip and seem have had solid growth over the past decade. Macquarie also have FLT at a price target of A$55.85 - 12 month. It may not reach that but I went for it anyway. Not sure if I will put a stop loss on this one or hold onto it long term.

BHP & RIO: Funny story is I kinda forgot about an order I had for BHP and it filled lol. I still like these companies because they are kinda the back bone of Australia. Although China is slowing down and IO may go lower, states will always need IO to build. India will be needing IO at some stage and I just feel personally IO is going through a healthy corrective cycle. With the AUD set to drop, this will also be good for BHP and RIO. They are also companies that can hold up strong during tough economic times given their market cap.

STO: Some may argue STO is a risk with the whole OIL issue taking place. I got into STO @ $7.10. Again, I have the long term view tha oil will eventually normalise. I was going to go for WPL but I thought I would stay with STO and just have a stop loss on this one. I am pretty confident with STO. They are an asx200 with a decent balance sheet. Their debt/equity ratio is 56.5%. I am quite happy for them to cut dividends to keep the company going forward since I had planned to reinvest any dividend if possible.

I am holding silver because my father has always been a silver nut. I believe silver was also at a 6 year low. I doubt i will keep averaging out on silver. But I always wanted to hold some gold/silver and I thought an EFT was an easier way of doing it for my situation.

Cheers

 

[Ariyahn2011]

NYSE and Nasdaq

Oh man I just wrote a big response and I lost it for some reason. Thanks for the responses.

For the Australian companies I have listed some of my reasonings below.

FLT: Low debt, solid dividend, good management, oversold on the 18th of the 12 on a profit downgrade although was expected. I also have the view that FLT has good prospects to continue to be a good company as long as they continue to be productive and innocative to compete with online competitors. I also put in a order, I assumed it would not fill. I came back home and it got filled.

BHP & RIO: I bought BHP and RIO because they are strong companies. They are the backbone of Australia's economic success over the past years. IO is having a healthy correction. It may correct further, in which case I will buy more but as China is slowing down, naturally IO prices are slowing. When the AUD gets weaker, this will be good for BHP and RIO. Also, long term, India will eventually need IO and to be quite honest IO will always be needed as more and more emerging markets develop. Once again, a healthy correction that needed to happen regarding IO prices.

STO: I was trying to decide between WPL and STO. Although WPL is a stronger company, I felt STO offered better capital gains long term. As mentioned I am not chasing profits and happy to wait it out as long as it takes. I am in the view that oil will eventually sort itself out. This paraphrased but the commentator in Benjamin Grahmans book "The Intelligent Investor" claims whenever it seems bad, it is generally not as bad as it seems.

Silver: Silver is at 5 year lows, and my father has always been a gold/silver believer. Along with daily reckoning newsletter which I have always read. I doubt I will get massive amounts of silver but I shall wait and see.

Oh and I just had some serious thought about getting into a EFT that shorts the S&P500 in case that big correction takes place. As we all know the DawJones is once again nearing historic highs.

Found a couple that seems good.

- ProShares UltraShort S&P 500 -X2 -X3
- SDS
- ASX: BEAR

All IMO of course.

Cheers : - )!

 

[skc]

Firstly, I hope you guys dont mind me sharing my investment journey with you. I saw some others doing it and I thought its a nice way to share personal experience and also welcome other opinions and cautions.

Personal Details

Age: 27
Status: Married, with 1 3yo.
Salary: Personal Income $40K - Disability Sector (not including my wifes income combined income of 90K approx).
Assets in rank of liquidity:

- Cash: $530000
- Shares: $17000
- Emergency Fund: $100 (just started one)
- Car: $12000
- Savings per month: $2000 (split $1000 cash / $1000 Shares)


Debt

- Car Loan $5332 (approx)

None of my business but is the cash amount a typo? If not, then why do you need an emergency fund and why do you have a car loan

 

[burglar]

Oh man I just wrote a big response and I lost it for some reason.!

Most or all of your post would have been saved by the autosave function.
Had you clicked on <reply to thread> then somewhere, you would have had an option to recall it.


I sometimes cut and paste to a document external to internet.
If I really don't want to lose it, I use a word processor in the first instance.

 

[shouldaindex]

Do you have 530k or 53k in cash?

 

[Ariyahn2011]

None of my business but is the cash amount a typo? If not, then why do you need an emergency fund and why do you have a car loan

Thats quite okay. It is a term deposit so I have put it away. It makes $1950 per year on 3.75%. So the emergency fund is quite seperate - would like to build this up for unforeseen bills perhaps?. I have not touched account. I more just lock it away and try be discipline as if it did not exist. I dont ever withdraw from it.

I have the cash account to have money on hand if another GFC occurs or perhaps maybe buy a house one day? Like i said I didnt say my way is the best way. Probably need to tweak and make some adjustments.


OH my mistake its 53K not 503K. My apologies!


Thanks

 

[Ariyahn2011]

My current reading list as well

Technical Analysis of the Financial Markets by John Murphy - 3
Japanese Candlestick Charting Techniques by Steve Nison - 4
The Single Best Investment By Lowell Miller (dividend investing) - 2
Stock Investing For Dummies Paul Mladjenovic - 1
Financial Statement Analysis: A Practitioner's Guide Hardcover – July 5, 2011
by Martin S. Fridson (Author), Fernando Alvarez (Author)

 

[KnowThePast]

Hi Ariyahn2011,

I think documenting your progress on a public forum greatly helps the learning process.

I will be watching with interest. Good luck!

 

[shouldaindex]

I'm actually in a similar position as the OP, in terms of life position.

I've also got STO and FLT on my watchlist.

 

[Ariyahn2011]

Hi Ariyahn2011,

I think documenting your progress on a public forum greatly helps the learning process.

I will be watching with interest. Good luck!

I'm actually in a similar position as the OP, in terms of life position.

I've also got STO and FLT on my watchlist.

Thanks for the feedback KTP.

Shouldaindex:Thats great mate. I wish you good luck

I have been non stop reading. Wife thinks ive become a fanatic lol!!

 

[Ariyahn2011]

Hello gang.

I have not made any new purchaes as of yet. Although, I have been looking at a Norway ETF. Norway saved their money during their boom. Their economy seems in good shape vs the rest of europe. Will let you know if i go ahead and make this purchase. I am also looking at a company called Corns Inc. They are listed on the US market.

Stay stuned .

 

[So_Cynical]

I am also looking at a company called Corns Inc. They are listed on the US market.

10 minutes of googling found nothing except Podiatry sites and Corn ETF's - futures.

 

[qldfrog]

if you have the cash (term deposit) why do you have a car loan, unless you can get tax advantages, it is hard to believe you would not be better off paying the car loan off with you cash, even if it means breaking your term deposit?
just 20c, sensible strategy otherwise just a bit too Australia focused to my taste with currency risk.
I know you have a few US shared but still not much exposure overseas overall

 

[Ariyahn2011]

@ QLDFROG - What you say makes perfect sense. I will actually pay it off. It does make sense, I think it was a bit of a physiological attachment to not messing with my savings despite having a loan.

I still make silly decisons. I am still learning and I am the first to admit a mistake. In regards to the AU exposure. I agree, which is why I made another purchase in the US equities market with a decent AUD$ before it goes down to 75cents possibly??

@So_Cynical - Sorry about that I didnt give you the full name. Here is the ticker for Corning Inc https://au.finance.yahoo.com/q?s=GLW

Current Positions

(I have attached my portfolio)

I have also recently purchased 83 GLW $1,935.56 .

Corning Incorporation

Corning Incorporated is an American manufacturer of glass, ceramics, and related materials, primarily for industrial and scientific applications

I am still a bit concerned about the equities market next year. Therefore, I will probably look to buy every 3 months or if there is a lot of concern then at the 6month point. I am basically sitting at 25% equities and 75% cash (Benjamin Graham's advise as per his book). I wont be changing this position unless there is another GFC-like crash.

You will see i got smashed by CFU/AYN/EGO. All small caps. I learnt my lesson. I should have had stop losses or better yet stayed away from small caps.

On a side note, I am pretty frustrated with etradeAU for overseas exposure. Half the time I dont know if my orders are filled. I recently had a order in for NQ mobile. It did not fill and obviously I could not adjust my order in real time. Anyway, NQ mobile went on to close about 35%+ lol. As a result, I have done a bit of research and I found optionsxpress might suit me. I have submitted an application and awaiting it to be approved.

I also found ubank offered some really good interest rates regarding savings if anybody cares!

Cheers guys

(PS if anybody is interested in the Norway ETF check out https://au.finance.yahoo.com/q?p=finance.yahoo.com&s=NORW)

 

[Ariyahn2011]

Companies of interest

FMG - FMG went up 7.5% today alone. They have a fair bit of debt to be honest from what I understand. Although, alot of it is long term debt so if IO recovers they should be fine. However, if it does not they may be in trouble. Might be a good pick up in the year if we get some new lows.

RIO - Maybe pick up some more if I see some new low's. I like how you can reinvest dividends in this company compared to BHP.

TLS - Would love to get into TLS at a good price. I am just not prepared to pay the current prices.

NVDA - Still want to get into Nvidia, I am right into my gaming. I have always bought Nvidia cards and I believe in their technology. They are a good company imo. Will keep an eye on them in 2015.

ORG - Another company I feel may present itself for good opportunities. My father always told me to be prepared to buy when there is fear. Kinda like the 2009 GFC.

WOW & WES - Still looking for an opportunity to get into these companies to get into some other sectors.

 

[pinkboy]

Companies of interest

FMG - FMG went up 7.5% today alone. They have a fair bit of debt to be honest from what I understand. Although, alot of it is long term debt so if IO recovers they should be fine. However, if it does not they may be in trouble. Might be a good pick up in the year if we get some new lows.

7.5% gain today perhaps, but what has it dont the other 360 days in 2014?

RIO - Maybe pick up some more if I see some new low's. I like how you can reinvest dividends in this company compared to BHP.

TLS - Would love to get into TLS at a good price. I am just not prepared to pay the current prices.

Agree. I procrastinated when it was around $4.90s and eventually bit the bullet @ $5.17. It has been my best performer percentage wise, however only a very small portion of my portfolio. I guess we see how the divs pay out.

NVDA - Still want to get into Nvidia, I am right into my gaming. I have always bought Nvidia cards and I believe in their technology. They are a good company imo. Will keep an eye on them in 2015.

ORG - Another company I feel may present itself for good opportunities. My father always told me to be prepared to buy when there is fear. Kinda like the 2009 GFC.

WOW & WES - Still looking for an opportunity to get into these companies to get into some other sectors.

Personally have WES, just cant pull the trigger on WOW. Maybe in the future.

pinkboy

 

[Ariyahn2011]

pinkboy

Yeah true regarding FMG, could be good for some short/med term trades i suppose. They used to be a massive company. I mean they are still pretty big. It is crazy how much they have dropped off.

Yeah TLS is a good company. I have a friend who works there, they are constantly looking at ways to branch out towards the tech sector and find new ways to generate income. I think you got in a nice price. Good job.