Need a little help and advice :)

[moneyslave]

I am 27 years old I have an "ok" job. I have a very crappy car and I rent a crappy room in the suburbs. I have around 45000 in saving and 10000 in super. Compared with my friends and people around my age group I am poor. Out of sheer desperation to keep a pace I rushed into the stock market in august with all my seed money =’( lol I was an idiot and currently I am net -4000 in the whole stock market venture. Should I just quit and put money in a bank and admit that I am bad at wealth creation? Or any enlightened soul can offer me some advice on what should I do?

Currently I own AGK stocks. I entered at 15.7, 14 and 13.

 

[Pat]

I am 27 years old I have an "ok" job. I have a very crappy car and I rent a crappy room in the suburbs. I have around 45000 in saving and 10000 in super. Compared with my friends and people around my age group I am poor. Out of sheer desperation to keep a pace I rushed into the stock market in august with all my seed money =’( lol I was an idiot and currently I am net -4000 in the whole stock market venture. Should I just quit and put money in a bank and admit that I am bad at wealth creation? Or any enlightened soul can offer me some advice on what should I do?

Currently I own AGK stocks. I entered at 15.7, 14 and 13.

What have you learned from you experience in the market?
Do you have time to research etc?
From my experience I have learnt a lot, and most of the mistakes I’ve made, I’ve not made twice. Perseverance is the key IMO. I'd say some have lost a lot more than your 10% or so and perhaps are quite successful investors/traders now. For the moment i'm enjoying my time in the market, I've been trading for almost a year now, enjoying my hard learnt lessons and loving the rush!
Perhaps put a small amount into a YT pick LOL, it's worked for me on occasion.

 

[KIWIKARLOS]

Did you put all your money into the one share mate.

Im 25 and am playing with about 30G, i have had to sell at loss for about $4K once but quickly made that up in other stocks. Funny thing was though if i had of held i would prob be further ahead now :.

I am by no means an experienced trader but my advice would be spread your money in a few companies restrict your punting on very spec stocks (currently i have about 30-40% at any time in what i consider to be high risk high return stocks) and the rest i stick in companies which aren't going to drop huge amounts Over night companies which are fairly established with good prospects. I have bought BHP n stuff before but you need massive up front capital to make real money.

So my plan is to make as much as possible so i stick to more risky adventures.

Currently hold

FWLO , EDEO, YML, AGO, MAE and MHL.

I would consider MHL the most spec

FWLO, EDEO and YML must somewhat spec but have established strong foundation to work with.

MAE is my baby gem, I've been on it for ages know the number 3 holder and think its going to be my best bet for the next 6-12 months.

 

[gordon2007]

Perhaps put a small amount into a YT pick LOL, it's worked for me on occasion.

Sorry but I feel that is horrible advice. Whilst YT's picks can be called legendary on here, he is not a financial advisor. I don't know him personally but I do admire his research abilities and he certainly has a proven track record. But to just buy a share based soley on his (or anyones) recommendation is not a good idea. You have to due your own due diligence.

Sure I've bought shares that he has brought up, but only after I looked into them myself. I've also bought shares that he hasn't been in at all (that I'm aware of) and still made money on them. But to just take a blind punt because he mentions a stock is bad idea.

This is not meant as any disrespect to YT....and hope he's not taking it as a slight against him. I'm mostly just stressing that you have to do your own research, and yes reading these pages can be considered research but you should also look into the records and board memebers and things like that.

 

[professor_frink]

I am 27 years old I have an "ok" job. I have a very crappy car and I rent a crappy room in the suburbs. I have around 45000 in saving and 10000 in super. Compared with my friends and people around my age group I am poor. Out of sheer desperation to keep a pace I rushed into the stock market in august with all my seed money =’( lol I was an idiot and currently I am net -4000 in the whole stock market venture. Should I just quit and put money in a bank and admit that I am bad at wealth creation? Or any enlightened soul can offer me some advice on what should I do?

Currently I own AGK stocks. I entered at 15.7, 14 and 13.

so you only have your youth, some friends, a roof over your head, your own private method of transport and more in savings than the average Horstrayan..... and your upset about what

Trying to keep up with people you perceive to be better off than you won't make you happy. There will always be someone with more 'things'. Do what makes you happy.

Sitting out on my back verandah with a beer on a Friday afternoon makes me happy, and that's what I'm off to do now

:drink:

 

[nizar]

Hi moneyslave.

See my reply to a similar question asked yesterday.

 

[Uncle Festivus]

FWIW,

Never be 'pressured' to trade especially with the sole motive of making money to keep up with your friends - asset envy?. Actually, you might ask them how much they are in debt to live this lifestyle you covet?

Some diligent fundamental study, charting and some luck required. Buy some good trading/investing books.

Learn position sizing and stick to it. I enter a trade with only part of what I intend to allocate - if I am correct then continue entering up to limit.
I wouldn't average down a loosing position, anyone else?

Don't use leverage or CFD's untill you feel proficient at share trading.

Should I just quit and put money in a bank and admit that I am bad at wealth creation?

2 months at it doesn't really give yourself a fair go - accept your losses, look to the next trade and don't feel sorry for yourself, you are not alone. Master your mental processes eg emotion and you are half way there.

Good investing

 

[trinity]

Have faith, moneyslave. Look to educating yourself. Heaps of reference books mentioned in this forum. Don't overwhelm yourself. Check out the types of books you need to read. From the book, Richest Man in Babylon, I leave you with the quote "Pay yourself first".

Good luck to all of us

 

[tradingforwealth]

I have also learnt the tough way,

last year I was down 30G - totally hurt me..

Just keep perservering, I had the problem of loving a stock too much (speccy as well) and it costed me big time, I had most of my money in it -

The stock is still not doing anything, I am glad I am out of that one!!

I am now up - I mean I specialise in Gold Stocks - I know how to read their announcements and value them now - I also read alot on the macro side of things ie US. Maybe trade in something you understand and also don't put too much money in speccy stocks. Hold stocks you are comfortable in holding in turbulent times.

 

[wipz]

I am 27 years old I have an "ok" job. I have a very crappy car and I rent a crappy room in the suburbs. I have around 45000 in saving and 10000 in super. Compared with my friends and people around my age group I am poor. Out of sheer desperation to keep a pace I rushed into the stock market in august with all my seed money =’( lol I was an idiot and currently I am net -4000 in the whole stock market venture. Should I just quit and put money in a bank and admit that I am bad at wealth creation? Or any enlightened soul can offer me some advice on what should I do?

Currently I own AGK stocks. I entered at 15.7, 14 and 13.

Hi moneyslave, i am 23 and in your same situation.
I found that the more you research a stock and the more you get a feel for the price of the stock the better your trades are going to be. Dont rush into a buy because someone has told you to buy it. You have to feel comfortable with each and every trade, if your losing sleep at night over a stock i say cut it off. I just realised a big loss the other day and it made me feel a bit sick but do your research and more than likely you'll find a few gems. Ultimately dont rush into things and dont put all your eggs in one basket unless you've done adequate research and feel comfortable.
If your bullish about a stock and in a loss position it shouldnt bother you (because you know it will recover in the near future). Cheers

 

[son of baglimit]

some good responses here moneyslave - especially the last one.

have patience, and absorb as much as you can.
pick an industry, or an ore type - maybe something you are personally familiar with through your job, or studies.....something where the info you try to absorb is not too foreign to you. make sure the learning is enjoyable, not a chore.
pick one or two companies to concentrate on initially, maybe by researching what you see on this forum.
above all be patient before you jump headlong into anything...........
we are possibly at the top of the market right now - plenty of folk promoting more good times ahead, and plenty forecasting doom & gloom.
when everyone is forecasting doom & gloom is often the best time to begin, cos its all uphill from there.
also try to understand the tax implications of whatever you do - sometimes a loss isnt so bad, if you can use it to reduce capital gains tax in the future.

personally, i started with tabcorp - why ? - cos i worked there, and i loved a punt - so the terminology was easy to absorb - i had an idea of how good/bad the developments were gonna be.

youve got plenty of time to be stinking rich - leave the BMW leasing crowd to do their thing, and (fingers crossed) feel good knowing by 40 youll be passing them.

 

[YELNATS]

Ultimately dont rush into things and dont put all your eggs in one basket unless you've done adequate research and feel comfortable.

Agree with your good advice, however, I would say "don't put all your eggs in one basket" no matter how much research you've done nor how comfortable you feel.

 

[son of baglimit]

Agree with your good advice, however, I would say "don't put all your eggs in one basket" no matter how much research you've done nor how comfortable you feel.

Very true, but as they are just starting out, its good just to get a feel for shares, rather than waste your limited cash pool on brokerage.

 

[brilliantmichael]

For a float of $45,000, $4000 is not a huge loss. In fact it isn't a loss at all as long as you retain your AGK holdings. I'm not familiar at all with AGL, but I know it's a blue-chip energy company that is pretty safe long term as long as the time you bought in wasn't overpriced.

Depending on your personal situation:
Either,
1. Learn your lesson, and decide whether you really want to seriously devote enough time to picking out your stocks with due diligence and care before devoting the majority of your funds to one stock. Read, learn... It takes years to master the market... and master yourself.
2. If you really want to commit yourself to wealth-creation, you can't tackle it half-heartedly.
3. If you feel you just want to do it for 'fun', and you don't really want to make it a part-time occupation, then try Index Funds (such as Vanguard), and obtain market returns without much fees, and with the figure quoted to you each night on the evening news.
4. Decide how much funds you want to risk. You're still young, so if you're serious about building your portfolio, then have a long hard think about how much you want to devote to your wealth-building endeavours.
5. You won't be young forever, so now's probably a good time!

Good luck!

 

[It's Snake Pliskin]

I am 27 years old I have an "ok" job. I have a very crappy car and I rent a crappy room in the suburbs. I have around 45000 in saving and 10000 in super. Compared with my friends and people around my age group I am poor. Out of sheer desperation to keep a pace I rushed into the stock market in august with all my seed money =’( lol I was an idiot and currently I am net -4000 in the whole stock market venture. Should I just quit and put money in a bank and admit that I am bad at wealth creation? Or any enlightened soul can offer me some advice on what should I do?

Currently I own AGK stocks. I entered at 15.7, 14 and 13.

Hi,

I like your name - somewhat relevant for the society we live in.

A gap in price will happen to anyone. Feel annoyed but not destraught. What you do from here on though is key. I don't give advice as I am not allowed to, nor are any who have not a hint of a lisence.

Buying stocks without knowing what you are doing is dangerous.

Cheers...

 

[nizar]

I found that the more you research a stock and the more you get a feel for the price of the stock the better your trades are going to be.

Well I beg to differ.
If there's any correlation between amount of research and the outcome of the trade, then my work has told me that If anything the correlation is negative and it makes you hold dogs for longer than you should.

You are less likely to be a "believer" if you looked at a chart for 30s or ran a scan of the market for candidates.

Dont rush into a buy because someone has told you to buy it. You have to feel comfortable with each and every trade, if your losing sleep at night over a stock i say cut it off.

I agree not to buy off tips.
Losing sleep at night has to do with your psychology and nothing to do with your profitability.

But I like the way you chop those dogs.

If your bullish about a stock and in a loss position it shouldnt bother you (because you know it will recover in the near future). Cheers

Well i can't see how you can "know" this.

But there has to be a time where you figure you've got it wrong, take the loss, and move on.

The key to being successful in the stockmarket is cutting your losses short and letting your winners run.

The exit is key.
And money management also (how you divide up your capital).

And have a plan. Know what criteria to look for to BUY, when to sell, and how many to buy or sell. When to add to positions, etc. There's many factors to consider.

If you want to invest through fundamental research in picking candidates know that you are prone to becoming a believer, but still its okay. BUT you still need a stop loss. And you need to know how to divide your capital.

And rememebr that being profitable is more important to being right.

But some people just want to be right. And sometimes you cant have both.
Reminds me of what Ed Seykota said: "Everybody gets what they want out of the market."

 

[Smurf1976]

Been there, done that.

I would put the money in the bank earning interest (BankWest, ING, Commonwealth and others have online accounts paying 6 - 7%) and learn all you can about trading and/or investing.

Bank interest isn't great but it's better than losing. Without the pressure of watching your $ go down the drain you've got a much better chance of making some sensible decisions about trading versus long term investing etc without being in a panic to buy/sell something NOW to stop the losses.

If you're going for long term investment then leave the money in the bank until you know WHAT type of companies you want to invest in (eg mining, oil, consumer staples, banking etc - list is for example only not a recommendation) and have identified at least some specific stocks to buy.

If you're going for short term trading then first learn HOW to trade profitably. You'll need to start using real money at some point but I certainly wouldn't be putting the whole lot in at this stage. Too much stress with the risk of a massive loss will cloud your thinking. If the most you can lose is, say, 20% (since the other 80% is in the bank) then you won't have that pressure.

THEN once you know what you're going to do with the money, take it out of the bank and put it in the brokerage account. And stick to whatever your plan is - don't change just because it's now real money or odds are you'll lose.

Me? Started small and made an outright fortune in a matter of weeks short term trading and speculating on "hot" stocks many years ago. Decided I was really clever, added some leverage and lost not only my profits but most of my capital as well. In hindsight that massive gain was luck not skill and I didn't have a clue what I was doing - it looked impressive for a while though.

After that I spent a few years learning all I could about trading and investing. Ulitmately decided on long term investing in industries I understand and have a firm grasp of the underlying fundamentals. Nothing wrong with active trading though, just don't combine inexperience and borrowed money (or even too much of your own money).

As for HOW to trade or invest, ASF is a good place to find that out...

 

[It's Snake Pliskin]

Nizar,

Well I beg to differ.
If there's any correlation between amount of research and the outcome of the trade, then my work has told me that If anything the correlation is negative and it makes you hold dogs for longer than you should.

You are less likely to be a "believer" if you looked at a chart for 30s or ran a scan of the market for candidates.

Flying blind is a good analogy.
I think he used the word "trading".

Well i can't see how you can "know" this.

It isn't about knowing. It is somewhat a paradox of sorts though.

The key to being successful in the stockmarket is cutting your losses short and letting your winners run.

Regurgitation.

The exit is key.

Can you justify this?

And money management also (how you divide up your capital).

And have a plan. Know what criteria to look for to BUY, when to sell, and how many to buy or sell. When to add to positions, etc. There are many factors to consider.

So is what we buy more important than the exit? Or is just the exit important even though it may be a dog? (maybe above will answer that)

If you want to invest through fundamental research in picking candidates know that you are prone to becoming a believer, but still its okay. BUT you still need a stop loss. And you need to know how to divide your capital.

Opinion and general comment can be dangerous.

 

[IFocus]

Hi Moneyslave

Congratulations on two counts one for taking responsibility for your investments ie investing yourself and not just handing it to some dogey broker to lose.
Two not being ashamed to ask for help.

Its always hard I find to give good advice to some one starting out as there are so many variable's around investing / trading.

My advice is very generic and I hope for the long term not just a stock pick.

Before you take a position in the market, thats to enter, exit or sit on cash always ask yourself is this what a successful professional investor or trader would do?

If you don't know the answer to that question then you mission is to find out.

If you act without finding the answer at the very least you will have no concept of the risk that you are taking on.

The market will always be there, always has always will and an opportunity of a life time comes around every hour / day /week / month/ year etc once you have the knowledge.

One last thing if you do proceed further make the commitment that you will never ever, ever give up.

Hope this helps
Focus

 

[It's Snake Pliskin]

don't combine inexperience and borrowed money (or even too much of your own money).

Many may want to read this, sadly a lot do the opposite.