How do I start with no start up?

[ZombieG]

Hi All,

First post here. Nice to meet you all! Im learning a tonne and have just as many questions BUT right now one in particular. I'm currently paying down a small consumer loan and that will be gone in about 2 months. I then have a specific amount I am going to set aside in to share investing. At this stage, I'm aim to contribute about 1000 per month. I'm going to be paying $20 per trade, minimum purchase of $600 per trade. I have a number of stocks I will be investing but am still doing a tonne of research (Overwhelmed!). My question is how do I get started on such a little amount (which is...basically 0!)? Should I list my preferred companies in order and each month invest in one of them until I cycle through all of them? Should I save up until I have a certain amount to invest in to the sharemarket? Should I save up and invest once quarterly or half yearly in a number of different companies? Or is it ok to put $1000 in x company this month, $1000 in x company the next month until I have gone through each company I want to invest in and from there invest in companies that are doing well whilst balancing my portfolio? At this stage I am looking to invest med to long term, mostly long term but I am thinking of actively trading (not day trading) for x amount of my investment. Just not sure how to go about getting a foot in the door.

At this stage, lending to invest is not an option for me even though I understand there might be benefits so would prefer advice on how to go about my previously advised approach for entry to market.

Does anyone have any advice or suggestions for me? Thanks in advance, and appreciate your help!

ZG.

 

[Wysiwyg]

Does anyone have any advice or suggestions for me? Thanks in advance, and appreciate your help!

Use the time while saving up to know the reason why you buy and sell a particular stock and is that reason a profitable one and is that reason repeatable. How will you know without losing your bank in some typical trial/error method? Use a trade simulator and/or paper trade going forward.

 

[So_Cynical]

$20 is 1.33% of $1500 - you should be looking to keep your brokerage per trade/position to under 1.5% otherwise its a bit silly, stock selection mostly comes down to biting the bullet and backing your judgment whatever that judgement is based on...pick your stock and place your bet, move on.

 

[poverty]

Forget active trading with such low amounts, the brokerage will kill you. Death of a thousand cuts. What I would recommend is an index fund or ETF.

 

[ZombieG]

$20 is 1.33% of $1500 - you should be looking to keep your brokerage per trade/position to under 1.5% otherwise its a bit silly, stock selection mostly comes down to biting the bullet and backing your judgment whatever that judgement is based on...pick your stock and place your bet, move on.

Thank you, so you definately not buy less than $1500 worth at a time. I COULD swing upping my monthly to $1500. Otherwise can do $2000 lots every two months.

Wysiwyg, that is exactly what I am doing.

poverty, are you suggesting pick an ETF, contribute to it (possibly based on the over $1500 rule)? Then once I have significant start up then start picking my own stocks?

Thank you all.

 

[Junior]

Thank you, so you definately not buy less than $1500 worth at a time. I COULD swing upping my monthly to $1500. Otherwise can do $2000 lots every two months.

Wysiwyg, that is exactly what I am doing.

poverty, are you suggesting pick an ETF, contribute to it (possibly based on the over $1500 rule)? Then once I have significant start up then start picking my own stocks?

Thank you all.

Another idea:

If you just want to get small, regular amounts into a growth portfolio at low cost and with no minimums, I would look at Acorns or Stockspot. Acorns you make daily or weekly contributions into an ETF portfolio with no brokerage.

Once you've accumulated a decent amount you could liquidate and then invest directly. In the meantime, just save and research.

 

[pixel]

Welcome on board, Zombie
Warnings and suggestions of initial responses notwithstanding, I reckon you've got a reasonable plan that you can make work successfully, provided that -

• You picked a batch of stocks with sound fundamentals and growth prospects.
• You keep diversity in mind and don't get sucked into just one or two sectors.
• You buy each stock based on its current trading status, not when you happen to have spare cash.
• You monitor your portfolio and don't hesitate to cull any stocks that fail your expectations.

All of that takes time to learn, but as you still have several months to go, use it to get a good understanding of your selected stocks: their industry, competitors, cash and cash flow, directors' qualifications and levels of remuneration; then try to gauge any trading cycles;
What has usually happened around ex-dividend times?
Are there any waves in weekly charts that would give a hint when to buy in a pullback? etc.

Before you start investing, you can thus have a rough monthly shortlist of stocks to select from, based on historic trading patterns - which you will have to keep updated as news and reports become available.
Getting the timing right more often than not will easily outflank $20 brokerage, regardless of your chosen position size. I do agree though that $1,000 is a more sensible minimum in a growth portfolio.

Good luck

 

[ZombieG]

Another idea:

If you just want to get small, regular amounts into a growth portfolio at low cost and with no minimums, I would look at Acorns or Stockspot. Acorns you make daily or weekly contributions into an ETF portfolio with no brokerage.

Once you've accumulated a decent amount you could liquidate and then invest directly. In the meantime, just save and research.

Yeah I am familiar with Acorns, I actually had an account, I think it was what really peaked my interest in investing. I closed it down though as I realised I needed to get rid of my consumer debt first, and I was hoping to take more of an active role in my portfolio. I'll keep in mind its not a bad idea to use that as a starting avenue. Thanks!

 

[ZombieG]

Welcome on board, Zombie
Warnings and suggestions of initial responses notwithstanding, I reckon you've got a reasonable plan that you can make work successfully, provided that -

• You picked a batch of stocks with sound fundamentals and growth prospects.
• You keep diversity in mind and don't get sucked into just one or two sectors.
• You buy each stock based on its current trading status, not when you happen to have spare cash.
• You monitor your portfolio and don't hesitate to cull any stocks that fail your expectations.

All of that takes time to learn, but as you still have several months to go, use it to get a good understanding of your selected stocks: their industry, competitors, cash and cash flow, directors' qualifications and levels of remuneration; then try to gauge any trading cycles;
What has usually happened around ex-dividend times?
Are there any waves in weekly charts that would give a hint when to buy in a pullback? etc.

Before you start investing, you can thus have a rough monthly shortlist of stocks to select from, based on historic trading patterns - which you will have to keep updated as news and reports become available.
Getting the timing right more often than not will easily outflank $20 brokerage, regardless of your chosen position size. I do agree though that $1,000 is a more sensible minimum in a growth portfolio.

Good luck

Thanks so much pixel those are really good tips and very encouraging. There are so many things to learn, I'm trying as you say to get a really good understanding of the companies, and really know what to look for, and if it is good or bad when I find it.

 

[luutzu]

Hi All,

First post here. Nice to meet you all! Im learning a tonne and have just as many questions BUT right now one in particular. I'm currently paying down a small consumer loan and that will be gone in about 2 months. I then have a specific amount I am going to set aside in to share investing. At this stage, I'm aim to contribute about 1000 per month. I'm going to be paying $20 per trade, minimum purchase of $600 per trade. I have a number of stocks I will be investing but am still doing a tonne of research (Overwhelmed!). My question is how do I get started on such a little amount (which is...basically 0!)? Should I list my preferred companies in order and each month invest in one of them until I cycle through all of them? Should I save up until I have a certain amount to invest in to the sharemarket? Should I save up and invest once quarterly or half yearly in a number of different companies? Or is it ok to put $1000 in x company this month, $1000 in x company the next month until I have gone through each company I want to invest in and from there invest in companies that are doing well whilst balancing my portfolio? At this stage I am looking to invest med to long term, mostly long term but I am thinking of actively trading (not day trading) for x amount of my investment. Just not sure how to go about getting a foot in the door.

At this stage, lending to invest is not an option for me even though I understand there might be benefits so would prefer advice on how to go about my previously advised approach for entry to market.

Does anyone have any advice or suggestions for me? Thanks in advance, and appreciate your help!

ZG.

Confucius said, "The journey of a thousand mile began with a single step." Or, gotta start somewhere.

The downside you kinda know, the upside to having small capital are:

1. You work hard so you won't lose it else game's over.
2. If you do lose it, it's small, tiny fees but the lesson you'd learn are still the same as those who lose millions or hundreds of millions (ask Packer Jr.). Bargain prices for good lessons learnt.

An old advice is to get rich slowly else you'd get poor very quickly.

So see what you can learn and apply from the little capital. The aim here is not so much the cash and the livable income... aim is to apply and define your understanding... then if or when better fortune come out of this or the weekly Lotto, then scale the lessons and approach up and bingo.

 

[ZombieG]

That's great advice Luutzu thanks you

 

[dutchie]

That's great advice Luutzu thanks you

Yes, good post luutzu.

 

[poverty]

poverty, are you suggesting pick an ETF, contribute to it (possibly based on the over $1500 rule)? Then once I have significant start up then start picking my own stocks?

Thank you all.

I don't actually see any point in stock picking, as I'm no expert so I just stick to the ETFs. Also the $1500 rule should be more like a 5K rule.

 

[pixel]

I don't actually see any point in stock picking, as I'm no expert so I just stick to the ETFs. Also the $1500 rule should be more like a 5K rule.

Each to his own and what works for them.
Buying ETFs means essentially you're outsourcing the stock picking bit to the ETF's fund manager. That can have an advantage of greater stability, but there is a flip side. ETFs are spread over a sector, averaging some good, some bad, and some still ugly stocks that the Fund, due to its size, can't stop out of as easily as a nimble retail trader.

Mind you, I'm not knocking ETFs, but it doesn't take too much genius even for a non-expert in stock picking to outperform an ETF, both short-term and long. A healthy dose of humility and discipline will do: Humility to realise that you're not infallible, so your last pick went wrong. Discipline to act on that insight and stop out without fuss.