New to the stock market: Where do I begin?

[snsdmonkey]

Re: Please help a beginner out!

I think I know the difference investing is long term and trading is short term is that right if I'm wrong I will probably sound really stupid haha so I'm sorry for that

Spot on. Think I underestimated you. I was thrown off by 'some stocks'. You know brokerage is like $15-25 depending on who you use, and I would think with the type of money that you have (assuming you're not getting massive wages or pocket money), that you should only be targeting 1 stock.

 

[Julia]

Re: Please help a beginner out!

Start by absorbing what is going on in the world. Understand why markets move.
viz presently the debacle that is occurring in Europe.

Imo no one should embark on trading or investing without a background appreciation of geopolitics and finances.

Many didn't see the GFC coming.
If they'd been absorbing what was happening in the US and further afield, it would have been absolutely clear that a crisis was developing.

 

[ilyuck]

Re: Please help a beginner out!

Spot on. Think I underestimated you. I was thrown off by 'some stocks'. You know brokerage is like $15-25 depending on who you use, and I would think with the type of money that you have (assuming you're not getting massive wages or pocket money), that you should only be targeting 1 stock.

i do have a job at coles i get paid about 60- 120$ a week not much but im not paying eny tax or board or enything so i get it all. and i thought that was right i just wanst all sure and if i was to invest how much should i invest for how long or does that depend on how the market is going?

 

[snsdmonkey]

Re: Please help a beginner out!

Well the best thing I can recommend is to stick all your money into a term deposit, or high interest savings account (so you can continue to add your pay into it) and during that year or so, learn more about shares. It'll do you a world of good and once you have a better idea of shares you can start investing and you get to see something come out of your money as well

 

[ilyuck]

Re: Please help a beginner out!

you are all awesome thank you for your addvice and i hope you can keep helping me along the way ill try and help people when/if i can as well

 

[notting]

Re: Please help a beginner out!

I'd do the above but tip it all into WBC shares instead of a term deposite.
That way you keep your tax free status, get a better pay out and feel the gain/pain in a pretty safe place.

 

[ilyuck]

Re: Please help a beginner out!

Well the best thing I can recommend is to stick all your money into a term deposit, or high interest savings account (so you can continue to add your pay into it) and during that year or so, learn more about shares. It'll do you a world of good and once you have a better idea of shares you can start investing and you get to see something come out of your money as well

I'm sorry but what is a term deposit and do you have a suggestion as a good high interest savings account? how much would it cost to open one and how manny fees would i have to pay?

 

[Julia]

Re: Please help a beginner out!

I'm sorry but what is a term deposit and do you have a suggestion as a good high interest savings account? how much would it cost to open one and how manny fees would i have to pay?

Have a look at this website:
http://www.infochoice.com.au/

It gives you most of the currently available accounts and their applicable interest rates.

A term deposit is where you deposit a fixed amount of money for a fixed term at a specific interest rate for that term. e.g. $1000 @ 5% for twelve months. The interest will usually be paid at the end of the term. If you break the term, the penalties are very high, so you will need to be very sure you do not need the money before engaging in a term deposit. Usually, the longer the term for which you commit the funds, the higher will be the interest rate.

You can often get an equivalent or even better interest rate in an online cash at call a/c where your money is available whenever you want it but is subject to a change in the interest at the discretion of the institution. Most of them will offer X no of months at a fixed rate.
If you follow the link to "More Info" on the Infochoice link you will find all the details of each of the advertised term deposit, at call and ordinary savings accounts.

Good on you for taking such an interest in your financial future at the age of 14.

 

[ilyuck]

Re: Please help a beginner out!

Have a look at this website:
http://www.infochoice.com.au/

It gives you most of the currently available accounts and their applicable interest rates.

A term deposit is where you deposit a fixed amount of money for a fixed term at a specific interest rate for that term. e.g. $1000 @ 5% for twelve months. The interest will usually be paid at the end of the term. If you break the term, the penalties are very high, so you will need to be very sure you do not need the money before engaging in a term deposit. Usually, the longer the term for which you commit the funds, the higher will be the interest rate.

You can often get an equivalent or even better interest rate in an online cash at call a/c where your money is available whenever you want it but is subject to a change in the interest at the discretion of the institution. Most of them will offer X no of months at a fixed rate.
If you follow the link to "More Info" on the Infochoice link you will find all the details of each of the advertised term deposit, at call and ordinary savings accounts.

Good on you for taking such an interest in your financial future at the age of 14.

thanks for your help. I was wondering if I am to young to be looking into my financial future how old do you think I should be be4 I do start looking into it? I just figured why not start now I find it interesting and I guess the younger you start the better time you are going have understanding it all and I think it would be better learning about it without being worried about not being financially secure when I'm older and have to start thinking about this stuff. do you think this is right?

 

[tothemax6]

Re: Please help a beginner out!

thanks for your help. I was wondering if I am to young to be looking into my financial future how old do you think I should be be4 I do start looking into it? I just figured why not start now I find it interesting and I guess the younger you start the better time you are going have understanding it all and I think it would be better learning about it without being worried about not being financially secure when I'm older and have to start thinking about this stuff. do you think this is right?

Exactly right. If you find it interesting then you can think of it as a good hobby. You will understand what to do with your money when you get older much more than other people.

 

[skc]

Re: Please help a beginner out!

thanks for your help. I was wondering if I am to young to be looking into my financial future how old do you think I should be be4 I do start looking into it? I just figured why not start now I find it interesting and I guess the younger you start the better time you are going have understanding it all and I think it would be better learning about it without being worried about not being financially secure when I'm older and have to start thinking about this stuff. do you think this is right?

You are not too young to be looking into your financial future. But the sharemarket shouldn't be the only direction you look.

At age 14 you should be thinking about education and future career... what interests you, where are your strengths and weaknesses etc etc.

I know plenty of multi-millionaires who knew nothing about finance or shares. They are just well educated, highly motivated professionals who get paid alot. And I bet you there are far more of them than sharemarket gurus starting at the age of 14.

Not to pour cold water on you or anything... just thought you should get your priorities right.

 

[investorpaul]

Re: Please help a beginner out!

I started investing in the stock market when I was 12 (ten years ago now).

It was the BEST and SMARTEST decision I ever made.

Regardless if you lose money starting early will open you up to a hugely interesting and potentially rewarding field. It will force you to learn more, read more and gain a better understanding of what drives the world and individual companies.

I would say that you should only invest what you can afford to lose and don't expect to make a killing in on your first couple of investments.

I started with only $500 (all I had) before slowly saving more money and buyer ever bigger parcels of shares.

Some will say it is not worth the effort because the share price needs to rise by a fair margin just to cover the brokerage, but consider that $500 an investment in your future (not just the individual share).

Don't let others put you off. Go and borrow some books on investing from the library, read as much as you can on the stock market and stick with a "relatively" safe stock to start with.

Good luck

 

[investorpaul]

Re: Please help a beginner out!

Also I don't know how much money you have but sticking it in a term deposit (although safe) is:

A. Not very interesting
B. Not going to force you to research more about the markets or force you to analysis why a share went up or down
C. Earn you what? $50 - $100 each year? (if you have around $1k).

It all depends on your risk tolerance but dont be afraid to give anything a crack.

The first share I bought was BBG I purchased it at $7.30 and it went down to the low $4's. This was the best thing that could have happened because it forced me to do one of two things:

1. Learn more and become a better investor or trade
2. Accept that I was going to lose money without committing time to do the research.

I took the first option

 

[Sir Osisofliver]

Re: Please help a beginner out!

ilyuck - Congratulations on becoming interested now. Here's a little secret for you and some guidance about where to begin...the earlier you start investing for the future the better off you will become - because of the benefits of compounding. Go find out about how compounding works.

In your shoes I would be trying to get some foundation learning happening. Start a budget. Right now it appears that your finances are very simple, you work part-time and pay nothing to anyone else. This will become significantly more complex in the future so get into the habit now of using a budget to a) figure out what your disposable income is b) plan for future expenditure without going into debt.

Debt is very different to a liability. Debt (for example a credit card) is paid from income you have not earned yet. When you purchase an asset using borrowings, you have both a loan and an asset, which can be sold to extinguish the loan. See the difference?

Learn about risk. All the rich people I know have one thing in common - they know how to manage risk. Managing risk will lower the potential return that you can make, but increase the certainty of your return.

Assets fall into three broad categories. Shares/Property/Fixed Interest - It's a mistake to focus your attention on only one of these asset classes - each asset class will have an optimal period of investment.

Cheers

Sir O

 

[Julia]

Re: Please help a beginner out!

You are not too young to be looking into your financial future. But the sharemarket shouldn't be the only direction you look.

At age 14 you should be thinking about education and future career... what interests you, where are your strengths and weaknesses etc etc.

I know plenty of multi-millionaires who knew nothing about finance or shares. They are just well educated, highly motivated professionals who get paid alot. And I bet you there are far more of them than sharemarket gurus starting at the age of 14.

Not to pour cold water on you or anything... just thought you should get your priorities right.

Good advice, but it's my bet that this 14 year old already has determined his plans for a good education and career planning.

 

[ilyuck]

Re: Please help a beginner out!

Thanks all these are somereally wonderfull tips and ideas i will follow ur suggestions so thabk you for your help but i have one question how can i invest in property if im 14 wont it all cost a couple hundred grand to a couple million dollars also do u have eny suggestions as a good book to get me staryed

Thanks

Jake

 

[ilyuck]

Re: Please help a beginner out!

ilyuck - Congratulations on becoming interested now. Here's a little secret for you and some guidance about where to begin...the earlier you start investing for the future the better off you will become - because of the benefits of compounding. Go find out about how compounding works.

In your shoes I would be trying to get some foundation learning happening. Start a budget. Right now it appears that your finances are very simple, you work part-time and pay nothing to anyone else. This will become significantly more complex in the future so get into the habit now of using a budget to a) figure out what your disposable income is b) plan for future expenditure without going into debt.

Debt is very different to a liability. Debt (for example a credit card) is paid from income you have not earned yet. When you purchase an asset using borrowings, you have both a loan and an asset, which can be sold to extinguish the loan. See the difference?

Learn about risk. All the rich people I know have one thing in common - they know how to manage risk. Managing risk will lower the potential return that you can make, but increase the certainty of your return.

Assets fall into three broad categories. Shares/Property/Fixed Interest - It's a mistake to focus your attention on only one of these asset classes - each asset class will have an optimal period of investment.

Cheers

Sir O

Thanks i also wanted to say i have made a bugget here it is 20% of what i make a week i take out as cash to spend on such thing like movies and going out with friends then i split the 80% that is left over into 2 diffrent bank accounts one is for my investments and one is for if i need to buy clothres gifts stuff like that but if the 20% is less than 20$ i scrap that take out 20$ and half the rest into the two diffrebt bank accounts i just talked about is this a good start for a bugget? Im not really sure cause i neva made one be4

Thanks

Jake

 

[Idiode]

Re: Please help a beginner out!

i do have a job at coles i get paid about 60- 120$ a week not much but im not paying eny tax or board or enything so i get it all. and i thought that was right i just wanst all sure and if i was to invest how much should i invest for how long or does that depend on how the market is going?

Hello ilyuck,

You sound so much like my youngest son it's scary.
At age 12 he worked as a Trolley Boy at KMart and like yourself was keen to "get into the stockmarket" with his free cash.
Having been a stockmarket investor myself since age 20 I appreciated the benefits and dangers of this form of investment. But relalising how easily a young man can "blow" his hard earned cash on junk, I felt that he might as well blow it on something that would give him a better understanding of the financial world and possibly earn him a bit better than bank interest.
I took him to my Stockbroker who suggested he buy a small parcel of Pioneer Concrete (about $180 worth at the time which would probably exrapolate to about $1000 in todays money).
He earned a couple of dividends from Pioneer and ended selling the parcel at a nice little profit a couple of years later and reinvested in another stock which also performed well - Caltex I think.
The major benefit of this was that because he had a personal holding, he learned to study a Balance Sheet, learned a lot about the market terminology, and gained some understanding of how the economy and the world of business operates.
I am sure it influenced his thinking and enthusiasm at school and allowed him to relate his studies to the real world. He completed secondary education as one of the top students at his school and then followed with Degrees in Accounting and Business Law.
Some 25 years later neither of us are millionaires but I am sure we are much better off that we would have been without the benefit of the stockmarket.
My advice - Read, Read, Read everything you can lay your hands on. Only invest what you can afford to lose and keep some cash for a rainy day. Buy only (at good value) stocks that regularly pay a good fully franked dividend.
I have mainly looked at investing for the long term. There are a lot of smarter people than me around who seem to do well at Trading (which requires a different technique). There are so many sources of information available today you could go mad trying to unravel them. Every stock has a good reason to Buy or Sell at the moment.
I turn to this site Aussie Stock Forums for a good balanced view of different stocks and investing strategies. I also use many other sites that I will not mention here.
I hope this encourages you have a go within your means.
Good Luck

 

[Julia]

Re: Please help a beginner out!

but i have one question how can i invest in property if im 14 wont it all cost a couple hundred grand to a couple million dollars
Jake

Better start saving then.

Hello ilyuck,

You sound so much like my youngest son it's scary.
At age 12 he worked as a Trolley Boy at KMart and like yourself was keen to "get into the stockmarket" with his free cash.
Having been a stockmarket investor myself since age 20 I appreciated the benefits and dangers of this form of investment.......

And so as a sensible, financially literate parent you instill the same attitude into your son, as he will do with his children.
If only such good sense were more common.

 

[snsdmonkey]

Re: Please help a beginner out!

Thanks all these are somereally wonderfull tips and ideas i will follow ur suggestions so thabk you for your help but i have one question how can i invest in property if im 14 wont it all cost a couple hundred grand to a couple million dollars also do u have eny suggestions as a good book to get me staryed

Thanks

Jake

Start saving and study hard. Scholarships in university go a long way to reward hard work and dedication.