Questions for Investing in shares

[barney]

I'm certainly in no position to give anyone advice, but I thought the inference that Realist's advice was incorrect was a bit harsh. Whether right or wrong, large numbers of advisors will tell you that diversification is critical to having a balanced position. Obviously its up to the individual to reseach and check the stocks he invests in. I thought in the context of a general forum Realists advice was very sound.
My only advice to Harro is read as much info as you can on everything from charting to day trading (and everything in between) and formulate a plan/system in your own mind that you are comfortable with and stick to it. Keep reassessing and improving your system, and never put yourself in a position where you are pressured to make a financial decision which is outside your comfort zone. The old saying "scared money never wins" is so true....... I speak from experience regarding that. What I write at the bottom of my posts about losing half my life savings is correct....by becoming too casual,not treating the market with respect (people are in there trying to win your money) and over trading outside my financial means I paid a high price. Trade smart and trade careful. Make sure there is a sound reason for every trade you make. Amen (If only I had listened to my own advice) All the best

 

[tech/a]

I thought in the context of a general forum Realists advice was very sound.

Hmm.
Diversifying $12000 over 12 trades as a risk preventative measure is frankly rediculous.
Brokerage kills it to begin with.
Investing $1000 in anything is a slow boat to the next shore.

Personally I would save the $15k needed to trade Margin and take advantage of the leverage.
Mind you Ive been doing this 12 yrs.

But using other peoples money is THE SECRET.
Staying in the game is also a major requirement,but you dont need to spread yourself that thinly that you lose interest.

 

[Realist]

Hmm.
Diversifying $12000 over 12 trades as a risk preventative measure is frankly rediculous.
Brokerage kills it to begin with.
Investing $1000 in anything is a slow boat to the next shore.

I do not disagree, howver you can buy shares for $20 or less.

12*20 = $120, after tax, it is tax deductable, $120 for $12,000 worth of shares. Woop-de-do. It is the constant buying and selling that kills you with brokerage, not buying and holding.

As for being a slowboat...
Now if someone only has $12,000 then investing it in 12 shares aint gonna make them rich quick. If you wanna get rich overnight with $12,000 buy lotto tickets and hope.

 

[RodC]

12*20 = $120, after tax, it is tax deductable,

Only if you're a trader.

If you're an investor the brokerage gets added to the cost base for CGT purposes.

 

[stink]

Hmm.
Diversifying $12000 over 12 trades as a risk preventative measure is frankly rediculous.
Brokerage kills it to begin with.
Investing $1000 in anything is a slow boat to the next shore.

Personally I would save the $15k needed to trade Margin and take advantage of the leverage.
Mind you Ive been doing this 12 yrs.

But using other peoples money is THE SECRET.
Staying in the game is also a major requirement,but you dont need to spread yourself that thinly that you lose interest.

Hi Tech,

From reading alot of your other posts, i know you could expand on your statement a bit

The comment you make about trading margin. Are you saying this is a good idea for someone starting out (lets assume their money management practices are sound) or only a good idea for someone of your experience?

I am interested in using margin to my advantage and am aware of the risks but i am trying to work out if it can be done without the risk of being wiped out? I mean if i have 10k i can get god knows how much on margin and obviously if i traded the max amount on margin its financial suicide and i have read statements you have made that are similar to this.

But lets say i am not a cowboy or a total fool am careful with my money and dont want to expose myself to any situation that could potentially ruin me, can trading margin be done sensibly as a way to increase capitol? If so could you give a brief example of how you would structure this type of approach, please keep in mind i have not decieded i will be doing this i just want to find otu what options i have.

Regards Stink!

 

[Harro]

Snake Pliskin

Above you mention trading first, then investing. Which is it and why? answering that question may involve some reading.

The answer is Investing , why? Because im looking at it long term and plan on buying into a buisness/'s that I believe has growth potential over then next ten years. I mentioned trade becasue buying and selling is essentially just that.

Also thanks again every one that posted

I wont be putting all my egg's into one basket but at the same time I wont be spreading my investment too thin, keeping it simple, but I really do want some real life information on online brockerage.

For example Ive looked at comsec, eTrade and westpac
comsec look's competitive but just dont feel right to me.
eTrade is most expensive but the online package looks the best to me.
Westpac well I bank with them so am bias toward as far as locality and simplicity goes but is also quite expensive.

Price isnt the only thing im looking for. Ease to navigate the online system and the total package is important too.

What are some of the experiences when operating with an(non-advisory) online brocker?
Is application easy, are there hidden costs, is the navigation of the site simple to navigate but not too complex (for a beginner) but also has all the nessisary functions for an intimmediate user?

 

[tech/a]

Hi Tech,

From reading alot of your other posts, i know you could expand on your statement a bit

The comment you make about trading margin. Are you saying this is a good idea for someone starting out (lets assume their money management practices are sound) or only a good idea for someone of your experience?

I am interested in using margin to my advantage and am aware of the risks but i am trying to work out if it can be done without the risk of being wiped out? I mean if i have 10k i can get god knows how much on margin and obviously if i traded the max amount on margin its financial suicide and i have read statements you have made that are similar to this.

But lets say i am not a cowboy or a total fool am careful with my money and dont want to expose myself to any situation that could potentially ruin me, can trading margin be done sensibly as a way to increase capitol? If so could you give a brief example of how you would structure this type of approach, please keep in mind i have not decieded i will be doing this i just want to find otu what options i have.

Regards Stink!

Stink I wrote a thread on Margin trading,have a look.
Personally the correct use of leverage wether it be in Share trading,stocks,futures,options or Property,or Business is an absolute MUST in my veiw if you are ever going to perform above mediocrity.

Have a read and I'll get back to this important topic when I have enough time to devote to it.

Im happy to run a chat one night on it if you or others are interested.

 

[Realist]

Personally the correct use of leverage wether it be in Share trading,stocks,futures,options or Property,or Business is an absolute MUST in my veiw if you are ever going to perform above mediocrity.

Again I do not disagree, but I would not recommend a newbie go any where near a margin loan. Especially now when the ASX is double what it was a few years back.

 

[Realist]

comsec look's competitive but just dont feel right to me.

Commsec is excellent in my opinion.

and at $19.95 per trade it is good value.

 

[Julia]

Snake Pliskin



The answer is Investing , why? Because im looking at it long term and plan on buying into a buisness/'s that I believe has growth potential over then next ten years. I mentioned trade becasue buying and selling is essentially just that.

Also thanks again every one that posted

I wont be putting all my egg's into one basket but at the same time I wont be spreading my investment too thin, keeping it simple, but I really do want some real life information on online brockerage.

For example Ive looked at comsec, eTrade and westpac
comsec look's competitive but just dont feel right to me.
eTrade is most expensive but the online package looks the best to me.
Westpac well I bank with them so am bias toward as far as locality and simplicity goes but is also quite expensive.

Price isnt the only thing im looking for. Ease to navigate the online system and the total package is important too.

What are some of the experiences when operating with an(non-advisory) online brocker?
Is application easy, are there hidden costs, is the navigation of the site simple to navigate but not too complex (for a beginner) but also has all the nessisary functions for an intimmediate user?

Hello Harrow,

Re choosing an online broker, I came to the same conclusion you have and have subsequently been very happy with E-trade. Certainly they are a little more expensive but if you are not planning to do frequent trades, I think the extra is well worth it for the level of research and general info you have access to, including quite a lot of education (e.g. technical analysis etc) which can be helpful for a beginner.

Although Realist's suggestion of dividing share parcels into $1000 amounts seems fairly unrealistic to me (I'd go for a minimum of around $5000), nonetheless the general principle of diversification for a balanced investor makes good sense imo. As Bob has pointed out, however, this should be carefully thought out and not done for its own sake.

Tech has espoused the value of using margin loans. He has an excellent point.
However, my suggestion would be that you stay away from that until you have something approaching his level of experience.

Good luck.

Julia

 

[tech/a]

Again I do not disagree, but I would not recommend a newbie go any where near a margin loan. Especially now when the ASX is double what it was a few years back.

This is where we differ.

I'm not suggesting ANY trader rush out and trade Margin.
Infact most that trade margin today do so "half" blindfolded.
IE they dont have enough information about their trading methodology to be in the position to mitigate risk "Leveraged" by the use of margin.

But trust me you dont have to have a degree in Finance to be able to safely use leverage.

 

[Ageo]

But trust me you dont have to have a degree in Finance to be able to safely use leverage.

Finally some sense being spoken

 

[stink]

This is where we differ.

I'm not suggesting ANY trader rush out and trade Margin.
Infact most that trade margin today do so "half" blindfolded.
IE they dont have enough information about their trading methodology to be in the position to mitigate risk "Leveraged" by the use of margin.

But trust me you dont have to have a degree in Finance to be able to safely use leverage.

This is what i am digging around trying to find, it annoys me when people post answers that only contribute a negative point of view without providing any reasoning behind the statement.

Not saying that you guys do that, i have found a couple of posts on similar topics and there is nothing constructive in them.

I think alot of people bag something because they dont understand it.

Anyway my goal is to learn what the mitigation strategies are when trading margin and then make the decision as to whether its for me.

Regards Stink

 

[ice]

Actually Buffett does get things wrong as he conceded himself (more or less) over his forex trade. Just that he doesn't get a lot wrong.


ice

 

[Realist]

Actually Buffett does get things wrong as he conceded himself (more or less) over his forex trade. Just that he doesn't get a lot wrong.


ice

Well no-one is perfect, he is as close as you can get to the perfect investor though.

 

[Harro]

Thank you Julia and Realist on your advise on eTrade and Comsec retrospecively.

Realist you basicaly told me what I already know, yes its cheeper than eTrade, and I realise if you use one you may not know the other to be able to make comparisons so thats cool, im glad Comsec works for you and gives me comfidence as well. Same with Julia.

Any way I'll have a look at both of them again and make my descision, im not in too much of a hurry I still have alot to learn and research in the actual initial share I wish to purchase.

Some of you are still debating on the smaller 1k investment packets , you may have missed my post saying I would wait and invest with 5k/6k amounts as I earn/save. So ill only be doing very few trades in a year.

Question
1. Does any one else have imput on these or other online stockbrocker's?
2.a) When setting up with an online brocker, do you need to open a new bank account with that particular brocker?
2.b)If no, is it wise do so anyway? (I know with wespac I dont have to, but to get the cheeper (advertised) brockerage rates I need to open a specific bank account with them just for trading)

 

[michael_selway]

Actually Buffett does get things wrong as he conceded himself (more or less) over his forex trade. Just that he doesn't get a lot wrong.


ice

Yeah he made big losses betting that the US dollar will plunge, well it hasnt as yet

Also he sold out of his big Silver holdings a bit too early

thx

MS

 

[nizar]

Thank you Julia and Realist on your advise on eTrade and Comsec retrospecively.

Realist you basicaly told me what I already know, yes its cheeper than eTrade, and I realise if you use one you may not know the other to be able to make comparisons so thats cool, im glad Comsec works for you and gives me comfidence as well. Same with Julia.

Any way I'll have a look at both of them again and make my descision, im not in too much of a hurry I still have alot to learn and research in the actual initial share I wish to purchase.

Some of you are still debating on the smaller 1k investment packets , you may have missed my post saying I would wait and invest with 5k/6k amounts as I earn/save. So ill only be doing very few trades in a year.

Question
1. Does any one else have imput on these or other online stockbrocker's?
2.a) When setting up with an online brocker, do you need to open a new bank account with that particular brocker?
2.b)If no, is it wise do so anyway? (I know with wespac I dont have to, but to get the cheeper (advertised) brockerage rates I need to open a specific bank account with them just for trading)

Harro,

1) im with westpac and im about to switch very soon to POWER etrade coz i need the extra features it offers. But even for buying/selling only, iv found Westpac to be very slow and i wouldnt recommend it

2) no, u can nominate any bank account (in Aust.) u want, just show them a recent statement when u apply to confirm

2b) There are no cheaper advertised rates; for me i thought it was $24.95 but then after 1 month they lifted rates to $29.95 which is just like Commsec (ordinary one, though if u open a cash management acct with $5,00 initial deposit u can get $19.95 brokerage for life even if u spend the 5Gs). But i dont know maybe they have a special advertised at the moment. Still i wouldnt recommend it coz its just soooo slow. By the time the "place an order" page uploads the market depth has already changed so much i dont even know why i still bother... but this week the etrade switch will be made...

Also - if u go to www.infochoice.com.au
You can choose which criteria u want in an online broker and they will give u range of the different brokers that fits the criteria u have specified

All the best

 

[nizar]

Yeah he made big losses betting that the US dollar will plunge, well it hasnt as yet

Surely its only a matter of time before USD collapses

Most analysts have now said he wasnt wrong - just early

 

[bvbfan]

Also he sold out of his big Silver holdings a bit too early


MS

I have heard theories he was selling shorting silver and got caught and insteead of buying back he simple chose to deliver