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Help for (Humble) New traders: Best stocks to invest $1000

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grubalo

grubalo

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Hi everyone,

I'm new to stock trading and I am looking to invest about $1000 into one or more stocks, and then a few hundreds per month. I would like to hear from anyone who can share a bit of their wisdom and recommend one or two stocks worth investing $1000. Ideally I'm looking for a quick or relatively quick turnaround on profits, rather than a stock that will capitalise over 5-10 years!

So far, stock under my radar are:
SXG
PLL
SXL
RDY
ZIP
KGN
APX
LTR
DRO

Happy to hear your thoughts on these stocks or suggestions for better options.

Thanks!

Karl
 
the only stock on your list i hold is KGN ( the others i had done very little research on )

if you are willing to wait .. a decent entry price MIGHT come your way

half-expect this to bounce around a LOT if this ( possible ) tariff war gets going

now that KGN resells on-line services as well , it will be ( slightly ) less risky than the original on-line goods retailer

by the i hold long term ( unless there is a GOOD reason to exit , but WILL reduce or add extras as the opportunity arrives
 
grubalo said:
Hi everyone,

I'm new to stock trading and I am looking to invest about $1000 into one or more stocks, and then a few hundreds per month. I would like to hear from anyone who can share a bit of their wisdom and recommend one or two stocks worth investing $1000. Ideally I'm looking for a quick or relatively quick turnaround on profits, rather than a stock that will capitalise over 5-10 years!

So far, stock under my radar are:
SXG
PLL
SXL
RDY
ZIP
KGN
APX
LTR
DRO

Happy to hear your thoughts on these stocks or suggestions for better options.

Thanks!

Karl
Click to expand...
'fast turnarounds ' need a good reliable internet connection ( and relatively bug-free platform ) my set-up proved to have neither so i abandoned that style early

one suggestion is , find yourself a cheap reliable pocket calculator , so you can crunch numbers independently of your computer/laptop/phone/device .

one problem with $1000 parcels ( or less ) is bang-for-buck after brokerage and (possible ) capital gains tax

also you probably need to access professional tax advice about trading and taxes ( and they love to change those laws so stay current . )

DO participate in the ASF monthly comp. it will let you test out ideas without losing cash on the tests

cheers and good luck
 
1k... almost wanna say it's not enough capital... but in another sense it's too much as noobs usually lose. You say invest, but you're more describing trading / gambling.

It's no financial advice, but buying and long-term holding the big trusty broad index ETFs is pretty much the accepted wisdom these days for most folks. Few have done better than that, over time.

Beginners are so reliably inclined to fail that there may be actual traders who look at these sorts of threads for fading / shorting ideas.
 
StockyGuy said:
1k... almost wanna say it's not enough capital... but in another sense it's too much as noobs usually lose. You say invest, but you're more describing trading / gambling.

It's no financial advice, but buying and long-term holding the big trusty broad index ETFs is pretty much the accepted wisdom these days for most folks. Few have done better than that, over time.

Beginners are so reliably inclined to fail that there may be actual traders who look at these sorts of threads for fading / shorting ideas.
Click to expand...
from my ( terrible ) attempts at early trading , it is essential you learn from your mistakes quickly AND accurately ( and from your successes as well )trading is all about percentages ie win more often than you lose OR win more ( cash ) than you lose ( not the same thing as the first one )

but another essential thing is to get your bets ON when you think you have a winner , picking a winner with no cash on it ( except in tipping comps ) is still no reward .

my goals are for a steady income ( for the rest of my life ) so gave short term trading the pass after it was obvious i wasn't good enough ( to afford all the bells and whistles you need to make it as semi-pro )

good luck

even my trader buddy very nearly got wiped out during the GFC ( luckily he had a good day job , to pay out the margin call )
 
Ok here is my take.

PAPER TRADE.

Learn about Position sizing
Risk management based.

EG a single trade of $1000
Risk 10% $100.
Say a 25 c stock with a 3-cent risk.
You can buy 3333 shares

$100/3 = 3333
3333 x 25c = 833 stock you can buy.

Learn without cost.

Once you can make a profit then trade.
Trading is 300% harder than investing.
Trading profitably is very very rare.
 
tech/a said:
Ok here is my take.

PAPER TRADE.

Learn about Position sizing
Risk management based.

EG a single trade of $1000
Risk 10% $100.
Say a 25 c stock with a 3-cent risk.
You can buy 3333 shares

$100/3 = 3333
3333 x 25c = 833 stock you can buy.

Learn without cost.

Once you can make a profit then trade.
Trading is 300% harder than investing.
Trading profitably is very very rare.
Click to expand...
OOps missed the $ sign $833 of stock.
 
finicky said:
Couldn't understand it anyway.
Click to expand...

You don't trade then.
OR
You don't manage risk by using Fixed Fractional position sizing.

For those interested this is a good post

Fixed Fractional Position Sizing : Day Trading Strategies : Forex Day Trading System : Adaptrade Software

Welcome to Adaptrade Software, your best source to find Day Trading Strategies for the Forex Day Trading System.
www.adaptrade.com

A general explanation

Fixed fractional position sizing is a trading strategy that allocates a fixed percentage of a portfolio's value to each trade:


  • How it works
    The percentage is based on the amount of risk the investor is willing to take on. For example, an investor might choose to risk 2% of their portfolio per trade.


  • Benefits
    This method is useful for traders who want to maintain consistent risk exposure across trades.


  • Also known as
    Fixed fractional position sizing is also known as fixed risk position sizing.


  • Related to optimal f position sizing
    Optimal f position sizing is a generalized version of Kelly's formula that extends the formula to allow for different win and loss sizes.
The position size will increase or decrease depending on the account balance.

Well worth knowing and even better worth implementing.

There are many ways to implement it not just a stop point.

Hope this helps.
 
StockyGuy said:
1k... almost wanna say it's not enough capital... but in another sense it's too much as noobs usually lose. You say invest, but you're more describing trading / gambling.

It's no financial advice, but buying and long-term holding the big trusty broad index ETFs is pretty much the accepted wisdom these days for most folks. Few have done better than that, over time.

Beginners are so reliably inclined to fail that there may be actual traders who look at these sorts of threads for fading / shorting ideas.
Click to expand...

Yes. Indeed, an ETF like IVV seems to perform as well as your superfund. I might invest on both an EFT and some high risk stock. But, one think Im not sure I understand is selling. So, say I buy $500 worth of KGN, and 3 months later, stocks have doubled in value. Can I just sell all my stocks for $1000 and a $500 profit. I mean, if I post them for sell they would quickly sell? or is this something that may or may not happen depending on whether there are people wanting to buy KGN at that point?
 
grubalo said:
Hi everyone,

I'm new to stock trading and I am looking to invest about $1000 into one or more stocks, and then a few hundreds per month. I would like to hear from anyone who can share a bit of their wisdom and recommend one or two stocks worth investing $1000. Ideally I'm looking for a quick or relatively quick turnaround on profits, rather than a stock that will capitalise over 5-10 years!

So far, stock under my radar are:
SXG
PLL
SXL
RDY
ZIP
KGN
APX
LTR
DRO

Happy to hear your thoughts on these stocks or suggestions for better options.

Thanks!

Karl
Click to expand...
As others have mentioned be cognisant of brokerage costs and choose a broker with low $ brokerage.

Be aware that $1000 is a very small amount to be investing and don't choose a risky small stock with a very low price e.g a 5c stock which if it falls to 4.5c means a loss of 10% of capital. Assuming you invested including brokerage $500 in it, your holding is now worth $450 and it will take just over an 11% gain to just break even.

Don't follow broker recommendations they are not worth the steam off that which flows from your kidneys and eventually to the outside world. Brokers make money from buying and selling shares for clients (you) not from making those new to investing rich.

Don't try to pick the bottom of a stock that is falling in price.

Choose a stock from a sector that is doing well.

Paper trade for a while until you are comfortable with decision making and wait until you are on paper without using real money in profit, breaking even or just losing a tiny amount including brokerage.

Read plenty. I'd initially avoid Youtube. It is mostly full of bull**** artists who worked out they can make more money from Youtube than from trading or investing. They have also worked out how to convince people they are right when they are probably not.

This platform ASF contains much good information. Learn how to use the search function.

Remember most people trading short term lose money so take your time in learning and heading in to the world of stocks. Also remember that everyone in this forum ASF was in your situation once, wondering as you are. I for one still am.

All the best in your journey.

gg
 
Garpal Gumnut said:
Paper trade for a while until you are comfortable with decision making and wait until you are on paper without using real money in profit, breaking even or just losing a tiny amount including brokerage.
Click to expand...
paper trading allows you to learn about various styles ( or trading ) , various events that MIGHT affect a share price , for example i read the MTS announcement and saw it as poor , HOWEVER the market seems to have expected worse news and the share has risen 27 cents since the close of trade last Friday ( not bad if you had bought it for $3.12 last Friday )

i learned from paper trading , i wasn't so good at it ( even allowing that my set-up is sub-standard )

absolutely keep practicing with paper trading even while you are learning with real money ( a new strategy MIGHT work better than the one you were using currently )

ASF is full of posts that will help you find suitable shares at a good time to dabble
 
There's a lot of good advice here, and a few points I disagree with, or consider not to be universally applicable (such as paper trading, which has several pitfalls, more for some individuals than others - I never did it and it would have harmed me).

What you're suggesting, putting $1k into one or two... 'high return with quick turnaround' companies, is probably going to quickly relieve you of some funds, or maybe will give you a big return and a false sense of confidence and skill.

It is extremely rare to find anything you can invest in with large returns you can confidently expect in a short time with low risk.

I started out day trading, with a similar plan to yours, did extremely well, and thought I was a genius because I turned $2,000 into $20,000 within a couple of months. I didn't realise any idiot with a similar strategy of throwing money at speculative companies would have achieved a similar result given I just happened to have started in the bull run following the 2008 GFC, and I was a little confused and frustrated when that bull run ended and the challenge increased.

Paper trading has its uses and is good for some people, but the most powerful force on the stock market is psychology, and for most people the most important thing is to manage their own psychology, not maths, statistics, analysis etc. Paper trading takes the psychology out of the equation. There is no fear or greed when you are paper trading, so almost everyone makes much better decisions with it than with real money, and then when they start playing with real money they suddenly start losing it and freaking out, unlike the successful paper trading they were building up their confidence with. By all means use it, but be aware of the psychology involved.

The best thing about starting an extremely risky strategy with only $1,000 is that it's a trivial amount of money and so at most you'll lose a trivial amount of money.

Everyone can give you their tip for the best company, you're welcome to look at mine in the tipping contest (DEL, and yes, I expect it to go well including in the short, medium and long term and yes, I have a non trivial holding) but unless you understand what you're doing, you shouldn't blindly follow me or anyone else. Actually, a few years ago I ran an analysis of the results of everyone who had taken part in the stock tipping contest over the previous 10 years to see if anyone did well enough that I might want to follow them and use them as a guide... I was amused to find myself in the top 3 even though I sometimes make deliberately silly choices with stocks I'd never actually touch, and there was no one including myself I'd think was a good idea to blindly follow.

By all means, risk your $1,000 if you want to, but I'd be looking at it as investing $1,000 in a learning experience rather than a direct financial investment. If it was easy for a newbie to get rich quick starting with $1,000 by simply asking for tips on an open public forum... well, you join the dots. It's not realistic.
 
grubalo said:
Can I just sell all my stocks for $1000 and a $500 profit. I mean, if I post them for sell they would quickly sell? or is this something that may or may not happen depending on whether there are people wanting to buy KGN at that point?
Click to expand...

Basically, though remember the brokerage you pay, and tax. With very small cap low traded stocks, especially, you can have situations where your share value based on the last trade in the market can be quite a bit above the highest open buy order, so you may need to lower your sell price a fair bit if you wanna sell there and then.
 
Sdajii said:
There's a lot of good advice here, and a few points I disagree with, or consider not to be universally applicable (such as paper trading, which has several pitfalls, more for some individuals than others - I never did it and it would have harmed me).

What you're suggesting, putting $1k into one or two... 'high return with quick turnaround' companies, is probably going to quickly relieve you of some funds, or maybe will give you a big return and a false sense of confidence and skill.

It is extremely rare to find anything you can invest in with large returns you can confidently expect in a short time with low risk.

I started out day trading, with a similar plan to yours, did extremely well, and thought I was a genius because I turned $2,000 into $20,000 within a couple of months. I didn't realise any idiot with a similar strategy of throwing money at speculative companies would have achieved a similar result given I just happened to have started in the bull run following the 2008 GFC, and I was a little confused and frustrated when that bull run ended and the challenge increased.

Paper trading has its uses and is good for some people, but the most powerful force on the stock market is psychology, and for most people the most important thing is to manage their own psychology, not maths, statistics, analysis etc. Paper trading takes the psychology out of the equation. There is no fear or greed when you are paper trading, so almost everyone makes much better decisions with it than with real money, and then when they start playing with real money they suddenly start losing it and freaking out, unlike the successful paper trading they were building up their confidence with. By all means use it, but be aware of the psychology involved.

The best thing about starting an extremely risky strategy with only $1,000 is that it's a trivial amount of money and so at most you'll lose a trivial amount of money.

Everyone can give you their tip for the best company, you're welcome to look at mine in the tipping contest (DEL, and yes, I expect it to go well including in the short, medium and long term and yes, I have a non trivial holding) but unless you understand what you're doing, you shouldn't blindly follow me or anyone else. Actually, a few years ago I ran an analysis of the results of everyone who had taken part in the stock tipping contest over the previous 10 years to see if anyone did well enough that I might want to follow them and use them as a guide... I was amused to find myself in the top 3 even though I sometimes make deliberately silly choices with stocks I'd never actually touch, and there was no one including myself I'd think was a good idea to blindly follow.

By all means, risk your $1,000 if you want to, but I'd be looking at it as investing $1,000 in a learning experience rather than a direct financial investment. If it was easy for a newbie to get rich quick starting with $1,000 by simply asking for tips on an open public forum... well, you join the dots. It's not realistic.
Click to expand...
Do you mean DEL as in

Delorean Corporation Ltd
ASX: DEL
 
grubalo said:
Yes. Indeed, an ETF like IVV seems to perform as well as your superfund. I might invest on both an EFT and some high risk stock. But, one think Im not sure I understand is selling. So, say I buy $500 worth of KGN, and 3 months later, stocks have doubled in value. Can I just sell all my stocks for $1000 and a $500 profit. I mean, if I post them for sell they would quickly sell? or is this something that may or may not happen depending on whether there are people wanting to buy KGN at that point?
Click to expand...
Mate,

It is not about particular stocks or ETF's at this stage of your journey. It is about getting the "vibe". From your replies you don't seem to be getting this. Don't be upset by what I am saying. I was the same as you when I started out. The question you ask has probably been asked before so search for it. If you can't find it anywhere on ASF, ask the question in one of the forum threads.

You are trying to go from A-Z without going through B-Y.

If you are really keen to use your $1000 to trade do the following. Get the Australian or AFR and stick the stock price pages on a neighbours front door. Get three darts and throw then at the pages. Whatever stocks they land on put $320 dollars on and use the rest for brokerage. Do it late at night in case the neighbour opens the door.

gg
 
grubalo said:
Do you mean DEL as in

Delorean Corporation Ltd
ASX: DEL
Click to expand...

I do. But don't take it as a recommendation. Do your own research and only buy if you understand things and independently think it's a good idea. Keep in mind that even though I personally think it's currently a good buy, I may dump it at a moment's notice for any of a large number of a reasons, and those scenarios could easily involve the price going up, down or staying still. Even if I knew exactly what I was doing, following me blindly wouldn't be good because I'm not going to be contacting you immediately when I choose to sell, whether that's because I'm taking profits or dumping before it suddenly crashes. Last month I did sell all of my DEL then bought it all back and more at a lower price (which was still more than double what I originally paid). I absolutely wouldn't have recommended you to do that even if I for some reason did want to break my rule about never recommending anything and despite it being exactly what I did for myself, because you wouldn't have been able to follow my timing unless you had me on a spy camera.

Stocks which are likely to give high returns in short time frames are not only very risky, but need a good understanding of at least one of either fundamentals or technicals, and an ability to move quickly if needed. It's common for these stocks to lose most of their value within minutes on the back of unexpected announcements.

By all means, jump in with your $1k if you want to. I've never bought a parcel that small even in 2008 without adjusting for inflation - it's too small an amount to be worth bothering with in the vast majority of situations, I rarely buy less than $5k worth of anything and even back in 2008 I never bought less than $2k of anything. The experience of trading might be worth plenty to you, but as an investment I personally wouldn't consider $1k to be worth playing with. Especially if you plan on doing short term trades, brokerage is going to add up and you're going to need to do better than most traders just to cover your brokerage costs.

I'm personally not a fan of paper trading but if I wanted to get started and only had $1k, I'd be paper trading while saving up enough to actually trade with.
 
“Stocks which are likely to give high returns in short time frames are not only very risky, but need a good understanding of at least one of either fundamentals or technicals, and an ability to move quickly if needed. It's common for these stocks to lose most of their value within minutes on the back of unexpected announcements” …..

So true, for someone starting out on stock trading.

Do Your Own Research (fundamentals/technicals). I personally use both but trend following is my specialty.

Depending on what style of an investor/trader you are. Look at your own psychology and personality and determine what best suits your needs going forward.

Where will this stock go (DEL) in December? Currently a “strong buy” but things could change very quickly.

Seasonality Report, you can see the fluctuations in 2024 with a month to go.


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