Is it a good time to enter the market?

[Nyden]

I mean if you have say $100K, start buying $30K. Sit back and relax, when the market dip again, buy another $30K etc.
The market has already gone down 30% from high. Do you think it will go down for another 30%, I don't think so, IMHO. Your risk of dipping into the market now, is so much less than if you waded in 2, 3, 4 months ago. i.e the risk and reward ratio is in your favour.

Heh, could very well go down another 30%. If commodities go bust ... could be carnage!

Many seem to be targeting the range of 4700 for the XAO, which is still a fair drop from where we're at now (somewhere in the range of 10%?)


Personally; especially in this market, I am avidly against 'averaging down', or topping up whenever something hits new-time lows - sure, it looks better on paper that you now hold at a lower price; but you have vastly increased the risk to your total capital, by exposing more of it to the market. More money spent (an increase of risk) to chase back losses? Sounds a little too much like gambling at the pokie machines to me

 

[Doh!]

Doh! It seems that cuttlefish has done more research into the actual numbers than you. Do you expect the next 5 years to be like the last? No one I have read believes so, not even the most bullish. Even the most basic back of the envelope calculations shows what a waste of $$ you are about to embark on IF you don't get 25% avg return. If you think you can get 25 % average knock yourself out.

I wish you luck. Thats my last words on the subject as there is only so much I can :horse:

I'll be honest numbers in the share market mean nothing to me
I don't have the infomation to translate them.
Which is why I and plenty of other people like my self invest with and advisor under a managed fund, but it appears that DIY is the only way to go.

 

[MRC & Co]

If you are going to invest DOH! I would recommend this:

https://www.aussiestockforums.com/forums/showthread.php?t=10193

Do a search on google for more information.

Its only available at certain times and is capital guaranteed (so you cannot loose your shirt)!

This will gain you exposure to all kinds of markets, unlike many ordinary managed funds and you dont need to have millions of dollars to buy into it.

Good luck!

 

[cuttlefish]

Re: Is it a good time to enter the market ?

Well your all going to love this. If i don't follow the advice i have to give the advisor a $1000 fee for the cost of preparing the advice.
should i take the loss on the chin
and start planning from scratch
You all seem to have plenty to comments about my scenario and I respect the Knowledge, how did you start your journeys. What reference material etc
To me the share market is very secretive nobody likes to share wealth

Doh! - I think you've done well in putting the question to the forum and getting responses and I respect the candid approach you've taken.
What exactly has the advisor 'prepared' for you - has he presented you with a range of options, fully costed, with upper and lower bound expectations including projected losses for the pessimistic case scenario? What are you paying for with the $1000. From where I stand the sting in the tail is effectively a form of coersion from where I see it. Any decent advisor will charge a flat fee and advise you of a range of options and should provide costings and would take a conservative approach. How did you come to deal with this person - was it through personal recommendation from a friend?

I'm not saying the advice won't work, nobody can predict that accurately, but it doesn't sound like you've been fully informed as to the risks and instead are being subject to a bit of a pushy sell. A balanced advisor would have explained that there'd been a strong bull market, that there were significant risks in entering at this point in time but potential significant rewards, would have discussed the current stage of the interest rate cycle and the state of world credit markets and tightness of credit etc.

Is the finance (i.e. the equity loan) being arranged by this individual as well? If so is that another commission based situation?

On the subject of how to start out with investing - read Tech/A's thread "Ideas for establishing a capital base" for some starting tips though you've already established a capital base. There are plenty of threads on here on all sorts of investment/market related topics.

I don't agree that people are secretive about the share market and there is plenty of free advice on here (so remember again - you get what you pay for lol - not all of it is good advice).

I would recommend reading Ben Graham's book and also the book "Rich Dad Poor Dad" (Robert Kiyosaki or something like that). (Robert Kiyosaki predominately focuses on property, Ben Graham on the stock market, but from a conceptual view both espouse similar concepts about how to determine true compelling value and act based on your own view rather than follow the herd.

To understand shorter term investing then you need to start to understand market psychology and understand disciplined trading and techinical/charting principles. Guppy's books are a good basic starting point to charting/trading concepts including useful things like determining capital allocations and the importance of money management principles in preserving your capital base.

You've got room to make mistakes though and making mistakes is an important part of any learning process. Investing in a managed fund as an idea is not necessarily a bad one, and picking market bottoms is also not easy though most with some experience would advise on either waiting until there is indisputable, compelling value (fundamental graham style investor - graham provides metrics) or clear evidence of a technical/chart turnaround (technical investing) or a combination of both before wading in heavily after a significant slump.

Plenty of people give advice but often people don't follow it.
Emotions - greed, fear, laziness/lack of discipline are the biggest enemies to succesful long term growth of wealth. Also there is so much apparently conflicting advice - so you will have to find your own path through it.

 

[josjes]

Heh, could very well go down another 30%. If commodities go bust ... could be carnage!

Many seem to be targeting the range of 4700 for the XAO, which is still a fair drop from where we're at now (somewhere in the range of 10%?)


Personally; especially in this market, I am avidly against 'averaging down', or topping up whenever something hits new-time lows - sure, it looks better on paper that you now hold at a lower price; but you have vastly increased the risk to your total capital, by exposing more of it to the market. More money spent (an increase of risk) to chase back losses? Sounds a little too much like gambling at the pokie machines to me

DOH did say that his/her timeframe is 30yrs +, he is not buying them now with the view of selling it in 3 months time, hence my opinion.

Heh, could very well go down another 30%. If commodities go bust ... could be carnage!
Many seem to be targeting the range of 4700 for the XAO, which is still a fair drop from where we're at now (somewhere in the range of 10%?)

The question this begs is why not everybody get completely out. For me,the reason I do not get completely out is, what if it is different? What if the 5100 on XAO is the low close? What if it is just a five month decline that is a hair less than 25%?

There is no convincing me this is the case but it could be nonetheless. Let's face it people who is calling for 4700 based on TA or FA are as clueless as you and me in predicting a future. As a matter of philosophy don't completely miss big moves up.
What I see is that we've already down 25-30% from top, the risk to the downside is getting less and less. If investor has her sight into 10,20 years then wating to pick the bottom is nigh impossible.

 

[IFocus]

Re: Is it a good time to enter the market ?

Well your all going to love this. If i don't follow the advice i have to give the advisor a $1000 fee for the cost of preparing the advice.
should i take the loss on the chin
and start planning from scratch
You all seem to have plenty to comments about my scenario and I respect the Knowledge, how did you start your journeys. What reference material etc
To me the share market is very secretive nobody likes to share wealth

I think I got taken down $2K when I started out for a 2 day seminar that told my absolutely nothing of any use they too were thieving mongrels.

I would dispute the $1K fee sounds a little high to me maybe some of the others here may understand the system better on how to wiggle out.

 

[Doh!]

Re: Is it a good time to enter the market ?

Doh! - I think you've done well in putting the question to the forum and getting responses and I respect the candid approach you've taken.
What exactly has the advisor 'prepared' for you - has he presented you with a range of options, fully costed, with upper and lower bound expectations including projected losses for the pessimistic case scenario? What are you paying for with the $1000. From where I stand the sting in the tail is effectively a form of coersion from where I see it. Any decent advisor will charge a flat fee and advise you of a range of options and should provide costings and would take a conservative approach. How did you come to deal with this person - was it through personal recommendation from a friend

Cuttlefish thank you for your level head. And also taking the time to right in length your advice.

The advisor has prepared a 55 page recommendation booklet 70% is just words. They have classed me as a growth or moderately aggressive investor with that they have matched the 5 funds to me using an equity loan on the house. As stated earlier I own 65 % of the dwelling

No range of returns have been given they have made me aware that the market fluctuates and that you take the good with the bad as I am a long term investor the gains will out balance the losses.

The reason I use to trust this advice is because of their prominent name in finance, the years they have been in finance and from books the co founder has written he also writes many articles in the courier mail news paper, i think you know who this is.

Yes I guess you could say it is coercion having to pay 1000k, they claim that this covers the cost of preparing the 55 pages of advice

I have arranged the finance myself with the bank under the advisors instruction

I have rich dad poor dad and will be reading it many times

Is it reasonable for someone to let a fund manager run there portfolio, after all everyone drives a car but not every person knows how the engine works, shouldn’t you best leave it to a mechanic or in this case a professional fund manager

 

[Doh!]

What is the title of Ben Grahams book?

 

[cuttlefish]

Ben Grahams book is "The Intelligent Investor".

I think putting your money into managed funds isn't a bad thing if you don't have the time or inclination to do your own homework and monitor your own investments directly - its no trivial exercise to consistently produce above average returns in the stock market. If investing in funds I think its still important to have at least a basic view at a sector level and also from a market timing perspective - and I'd suggest spreading it across two or three managed by separate institutions to reduce the risk of some systemic problem inside the institution.

By the way - I'm not advising you in any way on your course of action - as I've stated you need to make the decisions yourself - and I'd suggest taking some of the questions back to your advisor and see how they respond to it.

The Colonial funds are well known and reputable as far as I know - but there is a lot of turmoil going on in global credit markets as well and nobody is entirely sure who is holding the baby so a lot of people are steering clear of the financial sector - how this may or may not translate to vehicles like managed funds I'm not sure.

 

[Doh!]

Ben Grahams book is "The Intelligent Investor".

I think putting your money into managed funds isn't a bad thing if you don't have the time or inclination to do your own homework and monitor your own investments directly - its no trivial exercise to consistently produce above average returns in the stock market.

I am very time poor due to my work commitments,
but out of interest how much time per day would you spend on managing your portfolio

By the way - I'm not advising you in any way on your course of action - as I've stated you need to make the decisions yourself - and I'd suggest taking some of the questions back to your advisor and see how they respond to it.

Of course, and besides I'd never take advice from seafood

 

[Rockety]

I am very time poor due to my work commitments,
but out of interest how much time per day would you spend on managing your portfolio

Hmm, if you are preparing to invest for a long term timeframe you will probably put your money diversificated into the stockmarket by fundemental basis (though i wouldnt allocate all of my capital into equities only). In that case daily management is not a neccessary option in my oppinion (of course if you got the time it is certainly not a bad thing to do so, which you seem to not have). Technical analysis is good for determining good spots for entry/exit positions, setting news alerts, analisyt/company/fund reports, happenings in the world markets (especially US related news got a big impact on ASX at the moment), commodity prices bla bla etc etc the list could go on and on. I would say for you the optional would be a "check and go" before or after work, lets say 30 minutes on daily routine and a few hours on the weekend to do your own research and spot correlations in market movement.


well not sure if anything useful in there or not have been said or not univocal but thats my 2 cents

+ read this forum, there are many good TA - FA people around with great trading experience, i have learnt and will a learn more, really a good place to study some Made my first dollars on ZFX - put options when it started to move deeper and deeper, was trading only myself, was nice to get different views and ideas here Sometimes good tips too, i found MAK for example in a post by Kennas - under the potentional breakout thread, as a TA user i found it a good spot to enter long position... well lets say it worthed it, same goes for BRM. Wouldnt have found it without this forum, as i was in for option trading only more or less.

sorry for my bitter sweet english