Investing $3000 - thoughts pls...

[mlennox]

Personal opinion don't go blitzkreig on me.....

your friends best option is CFDs without a doubt, working off a $3000 bank taking 10% of the bank into positions at 3% margin could put him into positions for $6000, limit the risk with tight stop losses. This would allow him to get into say 4 stocks...

You might have trouble finding someone of your low caps on any of the providers, pretty much his only obstacle, plus CFDs are tax free

 

[dingo37]

HI PHAROH,

try a safe bet like BMX FOR THE LONG TERM PLAYER,

AND STUDY YOUR CHART'S,

BMX WOULD HAVE TO BE ONE OF THE BEST FUNDAMENTL AND T/A STOCK'S AROUND AT THIS POINT IN TIME,

OR EVEN JUST PAPER TRADE OR EVEN TRADE THE BLUE CHIP STOCK'S FOR A WHILE,

THERE IS NOTHING LIKE GETTING FOCUSED ON YOUR TRADE'S ESPECIALY WHEN YOU HAVE MONEY WRAPRD UP IN THEM

EVEN IF YOU GET IT WRONG WITH THE BLUE CHIP'S THEN OVER TIME YOU WILL GET YOUR MONEY BACK WITH A PROFIT.

GOOD LUCK

 

[Odysseus]

I feel that what Julia suggested earlier makes good sense. Your friend should not put all his money into just one or two stocks, but spread his risk, and the best would be for him now to buy something pretty "safe" with little volatility and good ongoing prospects, like QBE or ANZ. Thus he would have three stocks - still not enough, but better than two, and I'd guess that perhaps the two he already has are not quite as "solid" as either of these two. Another good alternative ,which would get him into a RANGE of blue chips at one go, would be to buy one of the best LICs - listed investment companies investing in mostly good stocks FOR him. You can buy these on-market, and he could keep adding capital to the initial purchase. Milton is a good one, or - particularly just now - Aberdeen Leaders (still unervalued). These would possibly be better than any other option because they themselves are - internally - diversified. Very good for the long run, particularly as your friend does not sound as though he knows much about the market or individual shares. Good luck!

 

[Duckman#72]

Hi Pharaoh

I'd say that you could go worse than telling your mate to get into ENG and BMX...but you might have already told him that.

By the way - my apologies in advance if ENG SP drop as I recently bought some. That should be the kiss of death for them.

Duckman

 

[mime]

You should not seek financial from this website.

 

[markrmau]

CFDs are tax free

CFD's are NOT TAX FREE

 

[dennisll]

When I first got interested in the sharemarket I rang up a full service broker (a big popular one) and told the guy that answered that I wanted to buy some shares. The broker asked me how much I had to invest and coincidentally (to this thread anyway) I said I had $3K. He told me to go away and come back when I had more money. Sorry, that was a bit too dramatic, he actually told me to put all the money in a managed fund as it was too small an amount. Obviously he knew that I was a newbie and that I wouldn't have known any better. Had I done that, I would not have learned much at all and would still be wondering what to do with money I have now. So in reply to your question, I would suggest you have a look at the market you want to be involved in and from what your strategy or objective is, make a decision and follow through. You may not be able to retire on your riches overnight but the experience and lessons you will acquire from this first step will serve you well through your investing/trading life.

Best of Luck!

Dennis

 

[ob1kenobi]

Paper trade the $3000 using a variety of different models. For example, putting the whole lot into one company, investing in two companies, investing in bundles of $1000, $750, $500 and see which one is most effective for the circumstances. Include GST and brokerage in your calculations. When the time is right, use an online broker like Comsec or Etrade.

 

[banjo_pete]

Wait untill VB comes on special @30buck, buy 99 slabs and a quick pick lotto.

 

[StockyBailx]

Wait untill VB comes on special @30buck, buy 99 slabs and a quick pick lotto.

Or put it all on Foster's! Excellent commercial detail banjo Pete. Bound to win lotto after drinking all those slabs. Excellent!

-----A Penny a day keeps the doctor away-----

 

[pharaoh]

Aha, good advice guys.

This has been a long thread - almost like a short story, and since so many have contributed, I thought you may like to find out how it ends....

He has put $1000 each onto ENG (41c), BRO(2.7c) and;

IMP at 1.5c, and as he did, they ann'd a 1:4 deal so he gets another 1/4 of his current holding, for 0.8c each - nice.

He's going to sell out his position on bro if it goes up to 3.5c or maybe 4c and reinvest into ENG or IMP, and def sit on ENG as they ann subscriber numbers in the coming weeks and jump to 50c...prediction there...

So there you go, and they all lived happily ever after.

Thanks to all for posting, response was awesome.

I think this is a great post as it is good for newbies who come along.
So pls drop a thought or two in here if something good comes into your mind, I myself have got a lot of good ideas out of it too.

And oh, let me know what you thought of the end...

 

[emily]

i believe $3000 goes a long way, you have to start somewhere..... the thing that pharaoh didint mention and alot of you asssumed, is the knowelege and expereince pharaohs's friend has. At the moment its looking good for pharaohs friend. not mentioning any names, i really dislike it when people say that u cant do much with 3k. profit or no profit, its a learning experience, and u have to try it in order to learn from it. He has already bought shares with that 3k, we should be supporting and helping in ways he can tackle the share market with 3k instead of suggesting what to do with the 3k eg. bank deposit, cfd's.......isnt gona help. u guys make it sound like 3k isnt much at all, to some people its money they worked hard for. i am very disapointed as i was reading this whole thread, how off topic it got.....
i strongly believe u can get somewhere with 3k, its all about picking the right stock, with 3k, forget about theories, risk n krap...... do your research, pick the right stock, and away you go........ anything can happen, who knows he might be the next warren buffet.
the bottom line is, Pharoah's friend is doing very well, put a word in to him for me..... show these people that mention "3k wont do much" how its really done.
keep us updated =D

 

[yogi-in-oz]

i believe $3000 goes a long way, you have to start somewhere..... the thing that pharaoh didint mention and alot of you asssumed, is the knowelege and expereince pharaohs's friend has. At the moment its looking good for pharaohs friend. not mentioning any names, i really dislike it when people say that u cant do much with 3k. profit or no profit, its a learning experience, and u have to try it in order to learn from it. He has already bought shares with that 3k, we should be supporting and helping in ways he can tackle the share market with 3k instead of suggesting what to do with the 3k eg. bank deposit, cfd's.......isnt gona help. u guys make it sound like 3k isnt much at all, to some people its money they worked hard for. i am very disapointed as i was reading this whole thread, how off topic it got.....
i strongly believe u can get somewhere with 3k, its all about picking the right stock, with 3k, forget about theories, risk n krap...... do your research, pick the right stock, and away you go........ anything can happen, who knows he might be the next warren buffet.
the bottom line is, Pharoah's friend is doing very well, put a word in to him for me..... show these people that mention "3k wont do much" how its really done.
keep us updated =D

What a great post, Emily ..... well done ..... !~!

No doubt the would-be gurus mean well, but their skewed
ideas are quite FAR from the realities of trading with
a small account .....

..... apparently speaking from the comfort of "deep pockets",
they simply spew out the standard "lower-the-risk" spiel,
that they have read in the text books of their trading hero.

That approach, simply will NOT work on small accounts,
unless you have a decade or three, before you want quit
your day job ..... !~!

Yes ..... $3,000 CAN go a long way towards building
a meaningful capital base, if we develop our own
profitable and tradable plan, in advance.

As there's no chance of leveraging, by the use of
margin trading (a risk in itself), then to make money
on limited capital, we must be prepared to take on
risk in other ways, if we want to make profits in a
reasonable timeframe .....

Spreading the risk across many stocks, simply increases
the brokerage load and substantially stretches out the time
frame to make comparable profits ..... likewise, investing
in blue chips may be safer, but our exposure in share
numbers is MUCH LESS and so our profit potential, in a
reasonable time frame is affected, yet again.

..... and blue chips go up and down too, so the buy and hold
theory does not apply to small accounts, since their pockets
are not deep enough to weather a sustained drawdown.

-----

So, higher risk is a factor, that most small account holders
have already accepted to a degree or they would not be
in the markets, at all.

Since we have the example here of trading two stocks, with
a $3,000 account, let's continue down that road.

Testing and honing a systematic, mechanical approach
to the markets should be easily achieved inside 1-2 months
of paper-trading (with some outside help) .....

..... it is a pointless exercise to paper-trade the markets
for extended periods, if the bugs have already been ironed
out of the system, because traders will not learn anything
about trading emotions, by paper-trading ... ie ... your mind
(and emotions) are with your money !~!

-----

Compounding our winners is a positive tool, but an even
more important tool is better market timing for both entries
and exits .....

..... "Being there, first" is the motto of Henry Weingarten's
Astrologers Fund and if our market-timing is good, then we
limit downside risk substantially, no matter which market
we may be trading.

If we enter early, downside risk is minimal and if we exit
before the masses, we again limit the risk of a fast downside
move, as other traders head for the exits, in a panic .....

-----

In summary, before the skeptix tip-the-bucket on us, let's
look at a few of examples posted here, recently:

BRW - THX - EPE - PCP - CNN and more, like PHL .....

Last week for example, CNN finished 39% up in a
negative week for the markets, overall !~! ..... and some
handy complementary earnings for a wage-earner.

This week it's PHL ..... up marginally today, on
very low volume ..... not bad on a day, where the
general market was down, another 70 points !~!

Using our 2-stock model, for $3,000 we could have a
holding of 75,000 in each of the companies above,
online brokerage included ..... and certainly more attractive,
than a handful of boring blue-chips ..... !~!

-----

Nope, we don't get them all correct, but we do get
enough right to pay the rent each week .....

So for small accounts, better market timing, self discipline
regarding stop loss levels, compounding winners and cutting
losers adrift quickly, all add to more profit POTENTIAL
for small account holders.

So, take heart small account holders, it CAN be done .....
..... just by ignoring the self-annointed gurus and
"being there, first", yourself ... !~!

For a FREE dowload, addressing many of the issues traders
confront in building their own trading plan, please go to:

Trading Plan ... wozzat ??? FREE download ..... click here.

happy trading all

yogi

P.S. ..... both CNN and PHL threads were posted in this
forum, ahead of the subsequent price action, too.

 

[pharaoh]

Emily and Yogi

Thanks for your recent posts, they are very wise and truly wanting to help.
Very good advice

He was doing really well til the crash, he held eng, and imp, and sold out of bro
At the top, portfolio was up to $5400 from the $3k

He just bought more imp and eng this week - eng hit 17c or so, and got more then and sold at 24c for a quick trade.

So doing ok.

What a cool thread, soooo much advice, I have enjoed it myself, and others i'm sure

Good luck in the troubled recent times. Things looking up now i thinkk
Whatta you guys reckon now?