Investing my first $1500

[Trend Hunter]

Hi Nioka.

I guess I got the impression from the original message that asfpep is new to trading, and I'm a believer of 'knowledge first' is the best way to go.

Obviously you have some knowledge & experience in trading.
IMO it would be unrealistic for someone who is new to trading, or is finding their feet, to get the same results as someone with more experience and knowledge.

 

[nioka]

update;

WB53525639 19/08/2010 B EKA 5,880 0.290 29.95 1,735.15 24/08/2010
WB53525707 19/08/2010 S AUT 1,536 1.145 29.95 1,728.77 24/08/2010
Today sold AUT and rebought EKA.

Holding now 7170 EKA. Value current @ 29c= $2079.30.

Reason for the change. EKA recently announced the purchase of additional lease areas, adding value. EKA may also be the subject of a takeover offer shortly (only my personal guess). Today offered a trading opportunity. I did not get the best trades possible as I had to make the change an instant one whereas normally I may take a day or two to swap to get better prices.

One important lesson though that should be remembered. I would have been better not to have traded at all. Even though I now have more value I actually have less shares and the value would have been greater had I just sat on the EKA that were bought at the start. Hindsight is a wonderful tool to have for those so gifted. I'm still learning from experience.

 

[Jako]

Hi nioka,

Been following what you are doing for a while now, and enjoying reading your posts, on both threads.

Just a question, when you swap, why dont you keep a small base holding, so if that companys share price rises unexpectedly you would still be "in" although at a reduced level.

cheers

 

[So_Cynical]

Hi nioka,

Been following what you are doing for a while now, and enjoying reading your posts, on both threads.

Just a question, when you swap, why dont you keep a small base holding, so if that companys share price rises unexpectedly you would still be "in" although at a reduced level.

cheers

Would also lower CGT liability's if your an investor and tax liability's if your a trader....assuming you have a longer term interest in holding the 2 stocks, building a holding.

 

[nioka]

Hi nioka,

Been following what you are doing for a while now, and enjoying reading your posts, on both threads.

Just a question, when you swap, why dont you keep a small base holding, so if that companys share price rises unexpectedly you would still be "in" although at a reduced level.

cheers

For the purpose of this exercise I am assuming the someone investing their first $1500 doesnt have a tax problem. This was to show that it is reasonable to start with only $1500. Actually I think it is OK to start with as little as $500 (but dont expect to retire after a year or two on the income). In my own case I hold considerable EKA and AUT in a seperate investment account which should keep tax to the minimum if held long enough. I have never been completely out of either stock and the capital gains tax concessions dont apply to the trading account as profits there are taxed as income.

 

[Jako]

nioka,

Nothing on this thread for quite a while either..

looking forward to your next posts

cheers

 

[nioka]

nioka,

Nothing on this thread for quite a while either..

looking forward to your next posts

cheers

Marking time waiting for some new news that will boost the stock. A chance of a takeover. New drilling report was mainly good. I expect more increase in value. Today's value $2151. The returns are fair so far but nothing out of the box. Appears to be low risk.

 

[lamta20]

your best option is to put that money into managed funds, buying direct shares is hard if you have no education in it. Maybe read a few books on trading, theres also heaps of information on the internet that you can learn from. In say ing that, this forum is probably the best to learn from.

cheers

 

[ParleVouFrancois]

I'd agree with Lamta except instead of managed funds, go for a broad index fund.

 

[nioka]

I'd agree with Lamta except instead of managed funds, go for a broad index fund.

Why let some whippersnipper play games with YOUR money and cream off a big percentage of the profit. Remember too that their record is,on average, not much better than bank interest.

 

[Aleksey]

Firstly, you need a broker. I would recommend one with a percentage brokerage fee. For a $500 investment, you would be paying cheaper brokerage fees than others with a fixed cost.

Secondly, now that you can actually buy something, you need to consider a trading strategy. 2 good investment strategies both varying in levels of risk are:
1. Invest $500 (or less batches) into new floats/low priced stocks that have potential to grow. (This strategy is a little risky as you can lose your money but can be very rewarding in terms of capital gains and also requires you to spend time doing research) and
2. Invest $500 (or less) into strong dividend paying stocks ( This will reduce your risk levels and can provide decent future growth)

These are just suggestions and i am not offering financial advice, do your own research before making decisions.
Goodluck with your trading

 

[Julia]

your best option is to put that money into managed funds, buying direct shares is hard if you have no education in it.

Disagree. If you buy, e.g. some Woolworths, Wesfarmers, any big bank, or other top blue chip company there's little risk in the medium/long term.
Better to start off this way to get a feel of the market than using managed funds which teaches you nothing, and makes your precious funds available to some anonymous fund manager who may not even beat the index, while taking a substantial management percentage in fees.

I'd agree with Lamta except instead of managed funds, go for a broad index fund.

Agree. Or buy a company like Argo Investments.

Why let some whippersnipper play games with YOUR money and cream off a big percentage of the profit. Remember too that their record is,on average, not much better than bank interest.

Exactly so, and frequently less than bank interest.

 

[brty]

Aleksey,

I get a little annoyed at this kind of incorrect, blatant advertising from a first time poster..

For a $500 investment, you would be paying only about $3.5 in brokerage costs

Yet from the mob you send people to, this is what is actually quoted...

Trade shares from $14.95 or 0.11%

I agree with Julia, investing with a company gives you interest and things to research.

brty

 

[Aleksey]

woops sorry. im not trying to advertise anything. ill fix that part up

 

[nioka]

Update.
Value today.$2509. Indications are that there will still be improvement in this stock. I am now looking for an opportunity to sell down half the holding to spread the risk over two stocks and take some profit from this one. Brokerage on this size holding is a problem that has to be taken into account.

The aim was to show that $1500 was not too small an amount with which to start investing. I suggest that this question has been answered however i will continue with the exercise.

 

[J&M]

Update.
Value today.$2509. Indications are that there will still be improvement in this stock. I am now looking for an opportunity to sell down half the holding to spread the risk over two stocks and take some profit from this one. Brokerage on this size holding is a problem that has to be taken into account.

The aim was to show that $1500 was not too small an amount with which to start investing. I suggest that this question has been answered however i will continue with the exercise.

great post for us new share buyers
What search criteria will you use for the next stock buy
or will you hold longer for the upward trend of EKA

James

 

[nioka]

great post for us new share buyers
What search criteria will you use for the next stock buy
or will you hold longer for the upward trend of EKA

James

There is probably more upward movement in EKA so I'm not in a hurry to exit. In my main holdings I have a few that are performing much better than EKA but this is because I hold them at much better buying prices than they are right now. LYC has been a great buy this week.SDL, CFE and NTU were great buying recently and probably still have a lot of room to move. Then there are stocks like VPG and CER that have possibilities but with some degree of risk. The question is "are they any better than EKA". Because I'm not sure of the answer I will stick with EKA for this exercise for now.

I am looking for another stock that is still developing, close to producing or selling a product. One with sound fundamentals, cash on hand, directors that do not have their snout in the trough but do have skin in the game and one that is being ignored by the market. Preferably one that is based in Australia to reduce soverign risk. Not easy to find.

Because this will be a second stock and it is only the profit from the first that will be invested then a small degree of risk is tolerable.

All the above is my personal thoughts and should not be taken as advice in any way. I'm often wrong.

 

[Jako]

great post for us new share buyers
What search criteria will you use for the next stock buy
or will you hold longer for the upward trend of EKA

James

I think it is a great read & very interesting for investors of all kinds.

Keep it up nioka, hope all goes well.

cheers

 

[xinyu09]

Thanks Nioka, great Read!

 

[nioka]

Update:
I chose to change over some of my AUT and EKA for TXN in my own investment account so Ithought I may as well do the same with this exercise. So;

15/11/2010 WB5487**** Buy TXN 1,715 1,715 0.585
15/11/2010 WB5487**** Sell EKA 3,170 3,170 0.335 .

So now we have:

4000 EKA @ 0.335 $1340 plus 1715 TXN @ 0.585 $1003 = $2343.
It may have been a proposition to change all the EKA for TXN because the brokerage on these small trades is high in proportion with the size of the trade. However this spreads the risk now over two businesses.