Long Term Trading?

[Tysonboss1]

I'll have to have a look, but does that mean I still shouldn't invest less than $500 at a time?

I would love to start one of the ANZ investing accounts, but after reading the ANZ website, you need to make a lump sum payment of $1000. I'm a full time students earning $300/week and saving for an international holiday in December. I don't think I could justify spending $1000 all at once like that haha.

Your not spending it, your investing it. If you can't justify investing $1000 how can you justify going on a holiday.

I started investing when I was in grade 8 working a paper round and earning about $30 a week.

My golden rule is you should invest atleast 10% of you pay, so save a minimum of $30 / week after you get to $1000 open the account and make contributions of $30 / week.

As your earnings grow so will your contributions, when you earn $1000 / week invest $100, if you earn $5000 per week invest $500.

I save about 80% of my earnings.

 

[burglar]

Life is hard for a student.
You go to a bar, see a pretty girl.
You can't afford to buy her a drink.
What can you say ...
"Would you like a sip?"

 

[Tysonboss1]

Life is hard for a student.
You go to a bar, see a pretty girl.
You can't afford to buy her a drink.
What can you say ...
"Would you like a sip?"

Ha Ha,... The good girls don't care about money. I was lucky to find one.

 

[Plutonic]

Your not spending it, your investing it. If you can't justify investing $1000 how can you justify going on a holiday.

I started investing when I was in grade 8 working a paper round and earning about $30 a week.

My golden rule is you should invest atleast 10% of you pay, so save a minimum of $30 / week after you get to $1000 open the account and make contributions of $30 / week.

As your earnings grow so will your contributions, when you earn $1000 / week invest $100, if you earn $5000 per week invest $500.

I save about 80% of my earnings.

That's a good plan, 10% I can live with haha. So how about putting 10% of my earnings into a 6 or 12 month term deposit and then investing it all at the end of the term? Or would the interest be so minimal that it wouldn't matter much if it was in a term deposit or just saved normally?

Life is hard for a student.
You go to a bar, see a pretty girl.
You can't afford to buy her a drink.
What can you say ...
"Would you like a sip?"

Haha, buying people drinks is way too expensive these days, I can barely even buy them for myself at $12 each.

Does anyone have any advice about http://nakedfunds.com.au? To my untrained eye they're the same thing as the ANZ Investment Account, only with a minimum starting balance of $100 rather than $1000. Is it okay to invest less than $500 at a time with a managed fund?

 

[Tysonboss1]

That's a good plan, 10% I can live with haha. So how about putting 10% of my earnings into a 6 or 12 month term deposit and then investing it all at the end of the term? Or would the interest be so minimal that it wouldn't matter much if it was in a term deposit or just saved normally?

For you I would recommend buying into a fund that allows you to make smaller contributions and invest fortnightly or monthly, this will mean the dollar cost averging is more effective.

once you have found some funds that allow this then compare fees, a fee of more than 1% of the capital is excessive when it comes to index funds ( because really they are not making any wise decisions, just robotically buying stock for you)

and just remember 10% is the minimum, you can save more if you like. the more you save at the beginning the better, because these are the dollars that have the longest time to compound.

 

[Tysonboss1]

Does anyone have any advice about http://nakedfunds.com.au? To my untrained eye they're the same thing as the ANZ Investment Account, only with a minimum starting balance of $100 rather than $1000. Is it okay to invest less than $500 at a time with a managed fund?

I had a quick look at naked funds (i am running short of time "dinner plans").

I don't think it is an index fund, Remember you want an index fund, this is where your money is invested accross a large cross section of the market robotically according to companies weighted averages.

It's not where a fund manager trys and picks whats hot for you.

 

[Plutonic]

For you I would recommend buying into a fund that allows you to make smaller contributions and invest fortnightly or monthly, this will mean the dollar cost averging is more effective.

once you have found some funds that allow this then compare fees, a fee of more than 1% of the capital is excessive when it comes to index funds ( because really they are not making any wise decisions, just robotically buying stock for you)

and just remember 10% is the minimum, you can save more if you like. the more you save at the beginning the better, because these are the dollars that have the longest time to compound.

Okay thanks, NakedFunds is the cheapest one I've seen so far. However the fees are:

NakedFunds Fee: 1.49% per annum
Fundhost Fee: 0.31% per annum

Edit: Ah okay, this is confusing. I didn't think the ANZ investment account was an index fund either, I thought they were both managed funds. Or are they the same thing? I thought and index fund was just a stock that you buy through a broker like ordinary stocks and managed funds were just accounts that you deposit money into and it's invested into the top companies for you.

 

[Plutonic]

Are there any other index funds similar to ANZ Online Investment Account, but with a lower buy-in cost, under $1000?

ANZ is the only index fund I've seen that's set out on a website like that, all the others are just like normal stocks. Instead of going through a broker and buying stocks in an index like SPDR. I'd much prefer it like the ANZ account where you just transfer the money into your account and they do everything else. Or is ANZ the only one?

 

[poverty]

The ANZ account is definitely an index fund, when I was thinking about it I trawled thru all the fine print and they actually directly buy STW to invest your money.

 

[kermit345]

Plutonic, to my knowledge the ANZ investment account isn't a fund, it is just an account that allows you to purchase any number of funds (I could be wrong here though so don't quote me).

I just checked the Vanguard website and unfortunately you can only invest in the Australian Shares Index Fund with a minimum of $5,000. However I also checked ANZ Etrade (www.etrade.com.au) and you are able to purchase managed funds through Etrade. Unfortunately I cannot find the minimum, however i'm sure if you gave them a call they will be able to tell you any minimum investment requirements etc.

Etrade charge 0.66% for managed funds that you hold and vanguard has an investment fee of 0.34% (from memory, work with these funds a lot through my job). Thats a total fee of 1.00% which is pretty good overall, you won't find anywhere much cheaper.

The only issue i can see with Etrade is you can't reinvest distribution payments, however if you just get it to your bank account and re-invest it yourself, it will serve the same purpose for your circumstances.

Don't mean to be shoving Etrade down your throat, its just I use them personally, they've served me well and I know their system pretty well so just putting it there as an option. Also means if further down the track you want to move into direct shares as well that opportunity is there for you.

If you want further help feel free to pm me, however sometimes its also a good idea just to give these places a call as well. Just don't let them put a sales pitch to you, gather the information your specifically after and try to avoid their sometimes pushy nature.

 

[Plutonic]

Plutonic, to my knowledge the ANZ investment account isn't a fund, it is just an account that allows you to purchase any number of funds (I could be wrong here though so don't quote me).

I just checked the Vanguard website and unfortunately you can only invest in the Australian Shares Index Fund with a minimum of $5,000. However I also checked ANZ Etrade (www.etrade.com.au) and you are able to purchase managed funds through Etrade. Unfortunately I cannot find the minimum, however i'm sure if you gave them a call they will be able to tell you any minimum investment requirements etc.

Etrade charge 0.66% for managed funds that you hold and vanguard has an investment fee of 0.34% (from memory, work with these funds a lot through my job). Thats a total fee of 1.00% which is pretty good overall, you won't find anywhere much cheaper.

The only issue i can see with Etrade is you can't reinvest distribution payments, however if you just get it to your bank account and re-invest it yourself, it will serve the same purpose for your circumstances.

Don't mean to be shoving Etrade down your throat, its just I use them personally, they've served me well and I know their system pretty well so just putting it there as an option. Also means if further down the track you want to move into direct shares as well that opportunity is there for you.

If you want further help feel free to pm me, however sometimes its also a good idea just to give these places a call as well. Just don't let them put a sales pitch to you, gather the information your specifically after and try to avoid their sometimes pushy nature.

Etrade looks alright. But what's better, an index fund or a managed fund? Because it looks like managed funds have more risk.

Edit: I just found the minimum, it's also $1000. Sigh, it looks like I'll have to save. I'm just worried that by the time I have $1000 in cash I'll have second thoughts about putting it all into something at once.

 

[kermit345]

I think you may have the terms slightly confused.

Managed funds can actually be index funds.

I.e. Vanguard Australian Shares Index Fund = A Managed Fund which is also an index fund.

STW = SPDR ASX/200 is an index fund, but traded as an exchange traded fund (a stock)

Managed funds come in many forms, an index fund is just one of these many forms.

 

[Tysonboss1]

the term "managed fund" relates to a fund where a fund manager invests your money, there are all sorts of managed funds that invest in all sorts of assets classes.

the ANZ account sounds good, I have not looked into the fee structure though, So you might want to double check this aspect.

Some managed funds invest in index funds, others specialize in "growth" stocks, international stocks, emerging markets, income, bonds etc.etc

In my opinion an index fund is the best long term, Because you never know whether a manager using some other stratergy can actually come up with good results, and if he does beat the index funds his higher fees might mean your still lower, and if the fund is large enough to charge low fees it will probably mirror an index anyway, So I recommend ignoring the hype and just use a straight index fund.

 

[Plutonic]

the term "managed fund" relates to a fund where a fund manager invests your money, there are all sorts of managed funds that invest in all sorts of assets classes.

the ANZ account sounds good, I have not looked into the fee structure though, So you might want to double check this aspect.

Some managed funds invest in index funds, others specialize in "growth" stocks, international stocks, emerging markets, income, bonds etc.etc

In my opinion an index fund is the best long term, Because you never know whether a manager using some other stratergy can actually come up with good results, and if he does beat the index funds his higher fees might mean your still lower, and if the fund is large enough to charge low fees it will probably mirror an index anyway, So I recommend ignoring the hype and just use a straight index fund.

Okay and how do I do that? Just buy the index fund stocks through a broker or is there an easier way, can you link me to any index fund websites that I could sign up to?

Thanks.

 

[Julia]

That's a good plan, 10% I can live with haha. So how about putting 10% of my earnings into a 6 or 12 month term deposit and then investing it all at the end of the term? Or would the interest be so minimal that it wouldn't matter much if it was in a term deposit or just saved normally?

Plutonic, you have asked multiple questions on this thread and have received many very helpful answers.

May I suggest it's now time to do some research of your own? Surely you can work out whether the interest on a term deposit would make it worth the inaccessability of such an investment.

Hint: there are many online cash at call accounts which are offering as much or more than term deposits, and your funds are at call.

You seem to be expecting people to answer your every query without being prepared to do some basic research of your own, and then make your own decisions.

Personally, I'd suggest saving in an at call online a/c until you have an amount that is actually worth investing. Then choose a couple of decent stocks (which you have actually researched all by yourself) and make direct investments in these, thereby avoiding paying any management fees for managed funds.

Sooner or later you're going to have to make your own decisions. And learn how to do your own research.

 

[Plutonic]

Plutonic, you have asked multiple questions on this thread and have received many very helpful answers.

May I suggest it's now time to do some research of your own? Surely you can work out whether the interest on a term deposit would make it worth the inaccessability of such an investment.

Hint: there are many online cash at call accounts which are offering as much or more than term deposits, and your funds are at call.

You seem to be expecting people to answer your every query without being prepared to do some basic research of your own, and then make your own decisions.

Personally, I'd suggest saving in an at call online a/c until you have an amount that is actually worth investing. Then choose a couple of decent stocks (which you have actually researched all by yourself) and make direct investments in these, thereby avoiding paying any management fees for managed funds.

Sooner or later you're going to have to make your own decisions. And learn how to do your own research.

Learn how to do my own research? Then what the hell is this? It's research. Reading information on a blog or in a book is no different than reading it here (perhaps with a little less condescension maybe). Reading it in a book is just reading what someone else has learned and written, just like reading it here. So how exactly do you define 'doing your own research'?

Thanks for the information you did give me though, I was planning on doing something similar, as it was what others had already suggested.

 

[skc]

Learn how to do my own research? Then what the hell is this? It's research. Reading information on a blog or in a book is no different than reading it here (perhaps with a little less condescension maybe). Reading it in a book is just reading what someone else has learned and written, just like reading it here. So how exactly do you define 'doing your own research'?

Thanks for the information you did give me though, I was planning on doing something similar, as it was what others had already suggested.

Defintion of research
For people born before the 90s = find things yourself from credible, firsthand sources
For people born after the 90s = ask and ask and ask on an internet forum

 

[Julia]

Defintion of research
For people born before the 90s = find things yourself from credible, firsthand sources
For people born after the 90s = ask and ask and ask on an internet forum

Ah, so that's it. Thanks, skc.
What a brave new world.

 

[tothemax6]

Learn how to do my own research? Then what the hell is this? It's research. Reading information on a blog or in a book is no different than reading it here (perhaps with a little less condescension maybe). Reading it in a book is just reading what someone else has learned and written, just like reading it here. So how exactly do you define 'doing your own research'?

Thanks for the information you did give me though, I was planning on doing something similar, as it was what others had already suggested.

In the hypothetical situation where I was a uni student wanting to get started in investing, and I were to say, only have $500:
I would save it in a savings account, contributing what funds I can comfortably spare week to week, until I have $1k. I would in the mean time be reading up. I would read Roger Montgomerys Valueable, so I know the basics of how companies are valued. When I reached $1k, I would then apply the knowledge I had acquired to invest the sum in one company I decided had the best prospects and a bargain share price. I would then see what happened to the share over say 6 months.
Ultimately my goal would be to increase my experience in investing so that when I had more money, I would be able to invest it more successfully than if I had no experience.
DYOR

 

[kermit345]

Okay and how do I do that? Just buy the index fund stocks through a broker or is there an easier way, can you link me to any index fund websites that I could sign up to?

Thanks.

This just pretty much re-hashed what you've said in numerous other posts. I've tried to explain managed funds and some ideas on what you could do 2-3 times and you've stuck to your guns anyway?

Have to agree with Julia, there comes a point where a number of people have tried to answer your question, and its best to the read further into it elsewhere before you start asking more.