Looking to trade more frequently

[Punty]

Hello. Thank you in advance for anyone who takes the time to read this.

I am 26 years old. I have a 200k share portfolio. I have built it over time by buying a blue chip when I have had some money spare. Once I have bought, however, I have just left my money in there - as I doubt any of my "educated" guesses are worth my time and the brokerage. My knowledge of shares goes as far as knowing what dividend yield is.

I have now decided to take a look into being more involved with my portfolio as my time is nowhere near as valuable as it once was; meaning that I have more time on my hands and I need to find new ways to supplement an income. I am currently at my very initial stages of researching this possibility.

I am not interested at this stage in day trading, but Im thinking more in the line of making up to 3 or 4 trades in a week. I am with Westpac Broking at the moment, who charge brokerage of $25 or 0.11% (whichever the greater). Is this rate competitive? I feel if im going to buy and sell on a weekly basis, this is very important.

I have considered outsourcing the research/expertise to a share advisory and blindingly following their advice. Not only is it safe to assume they can pick better than myself, but I have theorised that if the advisory is large/influential enough, their advice would be somewhat self-fulfilling. Unfortunately, initial signs are not looking good for this particular get-rich-quick scheme of mine. Finding a thread in this forum on the "The Australian Stock Report" (an advisory Ive assumed is the, or one of the, biggest for Australian shares) has not filled me with confidence in their skills and influence. But this approach, or something similar, I have yet to rule out.

In the aforementioned thread, the idea of using what was called a "full service broker" was also mentioned. What kind of fees do such brokers charge? Im assuming they vary alot? Are there any recommendations for such brokers?

I figure, even if I do put the research and study in myself to become a profitable trader, that I should initially use either a share advisory to follow "blindly" or a full service broker while I gain the knowledge and confidence required.

As for my own research and study. I would like to learn some techniques and tricks to trading shares on a weekly/daily basis in a way which is profitable and worthwhile with a 200k portfolio. What techniques, books, websites, programs, and other learning tools can anyone recommend?
I like the idea of initially trading just shares because a) i know what they are and b) trading in shares of companies, logically to me, seems to be an area that even an extremely novice investor should show a positive expectation in.
Please feel free to enlighten me of my ignorance though.

I truly appreciate any advice and comments given.

 

[joea]

Punty

If you are serious email me.

I will give you a published advice document from a broker.
The company deals with emerging companies in the resource sector, while also suggesting a portfolio of balanced stocks. i.e. including blue chip.

For example if you want to have an exposure to gold, it maybe as follows.
NCM 50% as Core Holding, then balance with producers,Developers and explorers.
For an exposure of copper stocks OZL, PNA etc.
However this company expects to broker your stocks. That basically pays for the research they supply. This is normal if you utilise their service.

Comment on brokerage. If you are interested in saving $5-10 in brokerage thats fine. However you should also think about reducing slippage by getting into the trade of the correct stock early, and out at the correct time. You will find that you will compile more money per trade than worrying about $5.
But that is up to you.

An example of an emerging stock I was given was SLR at 36 cents.

Finally, while traders chase stocks all over the sectors, it is wise to be in the sector which is moving in the correct direction, then into the correct commodity in the sector if it's resources. If you get my drift. i.e. gold and copper at the moment.
Cheers

 

[stv]

The Chartist offers portfolios with different timeframes and you might find something there that suits your needs and aspirations.

Nick Radge is the principle behind the chartist, and they seem to have a strong following.

hope this helps
steve

 

[Julia]

Punty, I'd suggest educating yourself as a first priority.

You're wrong to decide that a full service broker or an advisory service will necessarily make you more money than you can make yourself once you've acquired a reasonable amount of understanding.

There's a lot of free education available, starting with the thread on this forum by Sir Osisflover for beginners. Also the ASX website has some quite good basic education, including the basis of fundamental and technical analysis.

Read through as much as you can on this forum, especially the Beginners' Forum.
You will gradually form a view as to whether you want to take a fundamental approach or focus more on charts/price action/trends.

Re charges from full service brokers, these can be huge. When I started out I had the same assumptions as you do, i.e. that they were the professionals and would make me top dollar. They absolutely did not, and I recall paying up to $400 brokerage on a $20,000 transaction.

I've never found any of the newsletters all that great. For very small annual cost a subscription to "Smart Investor" is quite useful.

Good luck. At least you have a reasonable base to start with.
Keep us posted.

 

[Logique]

... I am currently at my very initial stages of researching this possibility.
I have considered outsourcing the research/expertise to a share advisory and blindingly following their advice.
...a full service broker while I gain the knowledge and confidence required.
..to trading shares on a weekly/daily basis in a way which is profitable and worthwhile with a 200k portfolio. What techniques, books, websites, programs, and other learning tools can anyone recommend?

Punty my main advice would be:
i) take off the rose coloured glasses, and
ii) be patient, start small, and read read read.

If the market keeps rising, sitting on the blue chips and doing nothing might be just as good a strategy for you. The brokerage you're currently paying is about right. Full service broker - can be expensive for what they actually deliver.

Trading newsletters can be alright if used with discretion. But they're not foolproof guides. Lots out there, personally I'm a fan of Charlie Aitken ('Under the Southern Cross'), he is naturally bullish.

And read ASF!

 

[white_crane]

Punty,

In your posts you've made statements to the effect of -

'I want to put some effort in learning more'
'study and research more'

but then you say things like -

I'm 26 and you have a 200k share portfolio that I built with 'spare' money...
'get rich quick scheme'...
'blindly follow brokers advice...

Forgive if I'm wrong, but it sounds to me like you don't really want to put that much effort into it yourself.

However, if you are serious about wanting to learn about shares and want to do some trading, then you're going to have to work for it. And work hard for it too. And it's going to take a long time to do it. That's the reality.

That being said, read around the forum here and get some ideas about resources you can learn from. Also, there is a wealth of information by successful and experienced traders right here on the forum...and it's free!

Good luck!

 

[gpappy56]

Agree with all of the above. I have a couple of accounts, one with a full service broker that costs a bundle when you trade but I use this when I think I am on a sure thing and can use the 3 days to settle. The other is E Trade which is similar costs to yours. have used a number of newsletters over the years, a couple of which have cost me a bit of money. I could have minimised this by putting proper stop losses in place (all part of the learning curve) but the 2 I use mainly now are Diggers and Drillers and Australian Small Cap Investigator. I have had some real duds with both but also some phenominal successes. There are a couple of threads on this site about both, with some mixed opinion but what I can say is if I had followed their instructions word for word I would be a lot better off now than I am. The main thing I guess is never to be complacent with where you are, just keep searching to find more opinion. That is how I came across this site and have found the opinions put forward to be excellent when researching stocks

 

[Punty]

Ill take most of your advice and put in some initial effort. I have started today thanks to all this free advice online and a university book Ive borrowed from a friend ("Investments" by Bodie, Kane and Marcus which on first browsing seems ideal in learning the basics).

It is much clearer today than yesterday what I must do if Im going to seriously look into trading.

Thank you for all of the replies. If Im ever in the position to help others on this forum I'll try to be equally polite and helpful.

 

[brty]

That textbook on portfolio theory, is exactly the wrong thing for someone to learn to trade with. The underlining assumption in such textbooks is the notion of randomness in the market, then lots of different ways of using higher level math to invest for the longer term with that assumption in mind.

If you wish to learn about trading, using either fundamental or technical analysis, then give the book back unopened and start to educate yourself. Spending many hours just reading through this forum is a good place to start in your education as others have already mentioned.

One thing in particular you will need is a change in mindset. You are in the typical position of a beginner by believing much of the information in the general media about who are the experts in this field, plus what all your acquaintances or relatives think they know (by reading the popular media).

The real experts usually keep a very low profile and have spent thousands of hours in gaining their expertise, there is a thread somewhere here about 10,000 hours of deliberative practice to gain expertise in any field. Steenbargers book "Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology" will help in the mindset part.

brty

 

[Punty]

Glad to hear someone say that brty.

The section that was in particular recommended (by a uni student) on diversification I read, without ever believing in the practical usefulness.

Some of the early sections that basically work as a glossary are still useful to me.

 

[joea]

Punty
In reference to your original post on 29th September.

If you live in a area with a substantial book shop, check this one out.
If not check FISHPOND.

"Teach your self about shares " Roger Kinsky.
This guy is a Master Graduate at NSW Uni.
He is actually a tutor on Share investing, online investing and business technology.
Edited in 2009 it will cover everything. From there you can be a little more specific in direction.
Because you have a substantial value in your portifilo I would be putting a lot of time into money management.
Risk versus Loss
The 2% Solution.
The 6% rule - Protection from Piranhas.
Cheers p.s.