Hi All,
I'm a new member to the ASF and really enjoying learning more about the ASX.
A brief overview of my experience with the sharemarket to date:
• Year 7 and 9 (high school): participated in the ASX schools sharemarket game with mixed success, no real direction provided by teacher and it was more a game of luck than strategy for my classmates and I.
• Year 10 (high school): invested some money through my Auntie's broker and managed to make a profit of about 20% in six months. Cashed out so I could by something, most likely a mountain bike haha
• Year 12 (high school): Opened up an online trading account as I had some savings dedicated to investing (about $5,000).
- First trade: managed to jump on a stock that went up 20%, sold (at what I thought was its peak, would later see that it went up 240% over the next 18months, whoops!)
Buoyed by my first successful trade, fell into the trap that stock trading was "easy", next five trades were losses. Final trade ($5,115 of capital left), put into a speculative medical innovation stock that had "potential" to rise by 100% over the next 12 to 18 months and grow more into the future. Bought at $1.65 and was going to sell at $2.00 given growth was slow, the price got to $1.95 before plunging! Five years later, I still have the stock after many "bad decisions to hold and have faith. Now it is worth bugger all but at it’s price it is better to hold and hope than to cash out for $25 (minus brokerage!). Did not even think about holding multiple stocks!!! Young and foolish!
Since then, I have gone to university, graduated with an Honours degree, moved to the big smoke, completed a graduate program, received a promotion and seem to be on my way to building a fantastic career. I'm 24 years of age, will have all my liabilities (excluding HECS) paid off by July 2011.
At present, I save over 20% of my income (invested in online saver at 6.51%). After July, 40% of my disposable income will go to savings/investments without impacting my lifestyle. A great position to be in at my age.
I am looking at creating wealth for my future, to enjoy the "financial freedom" that many set out to achieve. Basically when I get to my Dad’s age (52), I don’t want to be working. I’d rather be up in the Northern Territory catching Barramundi!
I am a first generation white collar so have limited knowledge (other than what I have gained from my own exploratory research and experience) on financial management and wealth creation. I consider that I am now a more astute student with any endeavour I pursue. I have commenced reading books on the sharemarket, learning different strategies, examining the myths and truths etc. I also talk about stocks with my girlfriends Uncle who has successfully played the sharemarket and set himself and his family up for a comfortable life.
Rather than looking at my past experience of the sharemarket as a negative (lost my investment capital), I consider it a cheap education. University cost $30,000, whereas my loss in the sharemarket was $5,000. I committed all the “rookie errors” that I am now reading about and this definitely proves that more education and awareness will assist in investing successfully in the sharemarket. And I’m wishing I had have had a stop loss in place (automatic sell of stock when it falls below 10% of the purchase price).
I read about diversification and won’t be putting all my investment capital into stocks. I’m thinking around $10k will be a good starting point. I’m researching various stocks now and using the different analysis techniques to assess them.
Am I better buying up shares gradually or saving until I have $10k as my starting capital. I envision a portfolio of anywhere between 5 to 12 shares (most likely 5 for starters, with 20% of my capital in each). I’ll be looking at having a portfolio that is geared towards capital growth and income (through dividends).
Also would people consider the current market a bull or bear market? With the fluctuations I have seen over the last month or so, I’m not sure whether now is a good time to enter or if I should wait and see.
Look forward to hearing your perspectives on my situation and learning more about the sharemarket over the coming months, years and decades!