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Jack108

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Hi,

I'm 18 and looking to invest in some shares within the next few months. I'm relatively new to investing (never invested before) and would like to have some help with the basics. I would also appreciate some info on what shares other people think will increase in value over the next year.

Thanks
 
Jack,

Welcome to ASF :)

Please note it is against both ASIC and ASF policy for members to give out financial advice directly related to buying and selling.

I suggest you learn to use the search function and the beginners lounge as this type of question is quite common and has been answered many times over.

Thanks

Prawn
 
Jack108 said:
Hi,

I'm 18 and looking to invest in some shares within the next few months. I'm relatively new to investing (never invested before) and would like to have some help with the basics. I would also appreciate some info on what shares other people think will increase in value over the next year.

Thanks
Click to expand...

Hi Jack,

I'm around your age, 19, I started buying shares directly when I was 12, the first step is to figure out what type of investor you are. I assume by using the word "invest" you intend to buy and hold?

Either way I work recommend buying/reading a few books (you can get hold of them for free from your local library). Its always good to get a few authors views on a subject and find out what works best for you.

When I started I read one or two books and throught that would do. I then proceeded to buy a few shares, which after a few months were worth less than what I paid (at the time I was a long term investor so it didnt matter too much) but what that taught me was that I didnt no anywhere near enough and since then I continually read new books, even on the same subject. Each time I read something new there is always a point or two that you can pick up and it is worth the effort. Education and knowledge is a big advantage to have in any industry, especially on the stock market.

The ASX website, www.asx.com.au, also offers some free online courses (just navigate to the education page).

Good luck,
 
now is the best time to get into investing... perhaps the market can/will go lower still, but its currently very good value... once this turmoil is over, you'll look back and say... wooo... what a bargain... ;)

The best way to get into investing is to ask around... talk to people... if you can find someone to be your mentor, it'll kick start your education... i think even talking to your bank's financial planners might be a good start... (although they may try to sell you their products)

on the note of looking at the asx website... it's cluttered and newbie unfriendly... way too much information and is very overwhelming if you're a beginner... i think the website needs much overhaul...

The only real advice I have for you is to invest with money you CAN AFFORD TO LOOSE... in these volatile and uncertain times, anything can happen... best to not put all your eggs in the one basket - just incase...

;)
 
I disagree with Korrupt about the ASX website. Any 16 or 18 year old bright enough to want to start investing would be well able to negotiate the info there, and it's necessary basic information before starting to put out money.

I can't comment on the other online brokers, but E-trade also has quite a good Education section.

In terms of starting to buy now, I'd suggest anyone doing so should be prepared to see their capital reduce before it grows.

Also bear in mind that as company profits fall, there will be an increasing likelihood of dividends being cut.
 
Look at some good books like Trend Following: How Great Traders Make Millions in Up or Down Markets, New Expanded Edition. These guys who used this method still made 30% in 2008 when most people lost.

http://trendfollowing.com/

The buy and hold option in a bear market even with great stocks can deplete your assets. You will always hear from the many experts hold for the long term which can be good in the good times but in a bear market you will lose your capital.

Another tip is never fall in love with a company and hold when the signs say sell is something I've had to learn.

If you have a read of this type of strategy you hold your winners and sell when the trend drops, that way locking in your proft, and sell bad choices quickly so you only lose a small % of capital. People that held when shares have retreated 50% or more last year will be waiting a long time to get back into the black.

Hope this helps.
 
If you decide to be an investor, I think these books are great,

*Intelligent investor
*One up on wall street
*Common stocks and uncommon profits

I would say read and learn as much as you can before you invest. I did that for about 18 months before I thought about buying something. The market will be here for ever. Yes there are lots of cheap stocks around at the moment but I bet there will still be lots of cheap stocks in 6 months time.

I would also say be very selective in your investments as well. The next two years are going to be very tough but if your taking a 5 year view I think you will do well. There is no need for high diversification I think. Five sound stocks with market leading positions and quality earnings and profits is the key. You've been given an opportunity to buy these top companies cheap so use it, no need to go for the mid tier spec plays when you can get great companies at great discounts. :2twocents
 
Have a read of Stan Weinsteins "The Secrets for Profiting in Bull & Bear Markets". It's the original classic that other authors tend to just regurgitate. As far as shares go, all you need to know is there.
 
first thing you should learn about is Money Management!
Just google Van Tharp's Money Management report, you should be able to find a free PDF. It can get complicated, especially for somebody new.
Knowing 'how much' or 'how many' is a critical concept.
 
Ha - i agree with Kennas - much more fun at the moment and better returns.

I suggest you start with Wharf Bar on Sunday nights in Manly before heading into Shore Club. :D
 
Open a Commsec account and jump right in. :p:

But seriously your gona need a broker so start shopping around, i just
switched from Westpac to Commsec and it was easy and hassle free.

Don't let the doom and gloomers put u off...there's lotsa value in the market.
 
Check out your local TAB and whack some money on Nadal for the Aussie Open! :p:

Odds of 4 to 1, hard to find a better return than that! :)
 
Save up as much money as you can, then wait til our housing market crashes. By the time that happens our stock market would probably bottomed.
 
Some of the comments here are bordering on advice, and unwise advice at that. I use "investment" here interchangeably for investing or trading.

Go to your local library and pick up a bunch of different books on different styles of investing. Read them all and find something that clicks with you. Find more books on that style by different authors.

Create a plan. You will need to cover many things including:

1) What do you want to achieve? Must be realistic - do not expect to make 100% return on the first $1000 you throw at the market.

2) What timeframe are you looking at? Years? Months?

3) How much money will you put in any given investment?

4) How will you know when to enter a market?

5) How will you exit the market? If you don't know this before entering then you are gambling.

6) What will you do if you suffer a losing streak? Say 5 or 6 bad investments in a row?

7) How will you handle winnings? Do you reinvest all your money? Will you divide winnings into 3rds - 3rd for you, 3rd to reinvest, 3rd for the taxman?

8) How will you know if your idea is no good?

And here's a free tip. The very worst thing that can happen to you is your first few investments in shares result in a profit. You won't start to ask the right questions until you've experienced losses big enough to hurt.

You might think, "C'mon. All I want to do is make some money in the share market." But if you don't think about these things, then any money you do make will just be good luck. And you'll lose it just as fast by going too big, too quick.

The fact that you are 18 and thinking about this is fantastic. Wish I'd started that young. When I did start, I wish I'd listened to the kind of advice I just gave you. But I didn't. And you won't. :) But be open to it after you realise that the markets are not a place to make a quick buck.
 
Once you've figured out your objectives and direction, don't forget to try your hand at paper-trading to test out your theories and strategies. Also, some sites, like the ASX, have trading games using play money allowing you to purchase/sell some stocks. This will give you the feel of trading and help build up your confidence without the risk of exposing your savings.

Always good to practice before entering the main arena...
 
Jack108 said:
Hi,

I'm 18 and looking to invest in some shares within the next few months. I'm relatively new to investing (never invested before) and would like to have some help with the basics. I would also appreciate some info on what shares other people think will increase in value over the next year.

Thanks
Click to expand...
No one knows what a share price will be tomorrow so for someone starting out a good aproach is to invest small amounts and often.

Unless you have conducted your own research on individual companies a good starting point might be an index fund. From there you can expand into individual companies as your knowledge from research grows.

ANZ offer a bank account which tracks the performance of the ASX200 index. It is ideal for those starting out with small amounts to invest through a regular savings plan. The other big banks may also offer a similar style of account so it will pay to check what they offer and compare fees.

For larger amounts you can invest directly into the ASX200 index through a stockbroker more cost effectively than through ANZ's facility.
 

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