Questions from a stock market beginner

[Joe Blow]

I'm quite new to the share market and have heard many people I know rave about such things as the Eureka report and Rivkin report. They basically contend that they do the work for you and all you need to do is read the respective reports and pick a stock to buy. I took a look at them both and am really not sure whether it would be a waste of money subscribing to one as i'm confident that I can do the research myself, however, would they be useful to corroborate my findings? Do they infact relieve you of having to do your own research (i've never personally been a fan of letting others do important thing for me as i find you get better outcomes by doing things yourself)?

If anyone has subscribed to these types of reports or if you have some knowledge of them then your input would be greatly appreciated.

N.T

Hi N.T.

There is a thread in the Trading/Investing Resources forum that discusses various newsletters/reports and people's experiences with them.

It can be found here.

 

[Onceblue]

I'd like to know whether it is possible to opt out of dividend reinvestment after a stock has gone ex-dividend and before dividend is paid?
I've always opted for reinvestment but recently I thought I'd sell one stock but then remembered I'd be left will a couple of stragglers courtesy of dividend.
I assume that record date is the key but can't find that date for my stock when I look at Etrade. Is there a forumla based on ex-dividend date?

 

[newbie trader]

Question: i've been watching a particular stock for a few weeks now and it seems to go down -20/25% one day (or a few times during the day) then back up 20/25% the next and its been doing this consistently. Are people just buying on the -20/25% then selling on the 20/25%? If its as easy as that you could make 60-100% quite easily a week or am i missing something here (which i probably am)?

N.T

 

[nunthewiser]

Question: i've been watching a particular stock for a few weeks now and it seems to go down -20/25% one day (or a few times during the day) then back up 20/25% the next and its been doing this consistently. Are people just buying on the -20/25% then selling on the 20/25%? If its as easy as that you could make 60-100% quite easily a week or am i missing something here (which i probably am)?
N.T

The market depth m8.........as in the queue ........have a look at how long it takes to get filled in the queue on the buy then follow the queue in the sell ........not as easy as it sounds.

 

[stokie]

Hi all,

I'm a soon to be new investor currently researching/building my basic knowledge.

Question regarding stop losses:

When you set a stop loss order, is there any guarantee's that you will actually sell your stock at the price you set? As if the price drops quickly, won't it be possible for no buyers to be available at your stop loss price?

If the price then drops below the stop loss price, does the broker then just sell the stock as soon as possible (regardless of the price)?

Thanks

 

[tech/a]

Hi all,

I'm a soon to be new investor currently researching/building my basic knowledge.

Question regarding stop losses:

When you set a stop loss order, is there any guarantee's that you will actually sell your stock at the price you set? As if the price drops quickly, won't it be possible for no buyers to be available at your stop loss price?

If the price then drops below the stop loss price, does the broker then just sell the stock as soon as possible (regardless of the price)?

Thanks

You can set a stop limit order but you run the risk of price trading straight through your limit and continuing to fall.
I use them and widen the limit dependant on liquidity.
Has saved me a great deal in slippage at both ends Buy and sell.

 

[stokie]

Right, thanks tech/a, that's what I figured. So basically you need to keep an eye on the price, even with stop losses.

Ok, another question:

I've seen a fair few people post up their trading strategies in the form of a code, how exactly do you run these codes? Do online brokers allow you to input a code or something?

(again, excuse the uneducated-ness of me)

 

[Sir Osisofliver]

Right, thanks tech/a, that's what I figured. So basically you need to keep an eye on the price, even with stop losses.

Ok, another question:

I've seen a fair few people post up their trading strategies in the form of a code, how exactly do you run these codes? Do online brokers allow you to input a code or something?

(again, excuse the uneducated-ness of me)

Code? Any chance of an example of what you mean? I can't tell if you are talking about an Amibroker programming code (or some other programming code) or some strategy rules (that might look a bit like code).

Cheers

Sir O

 

[sageintraining]

Fundamentals guy here...

Just wondering, the stock market is so vast and daunting.. Like where do i even start? I just wanna start the grunt work and just employ some little techniques ive picked up. I honestly dont mind slaving over balance sheets and cashflows but the problem is actually locating the information thatll lead me to put pen to paper!

Like I've seemed to have missed out with the recent GFC, the banks would've been a perfect time to jump in at..do i have to wait it out for another catastrophe? Which industries are out of favour atm? REITs? Retail would be weaker? Has media already hit its peak?

yes, annoying little questions but hey, im keen!
kind regards,
futuresage.

 

[GumbyLearner]

Fundamentals guy here...

Just wondering, the stock market is so vast and daunting.. Like where do i even start? I just wanna start the grunt work and just employ some little techniques ive picked up. I honestly dont mind slaving over balance sheets and cashflows but the problem is actually locating the information thatll lead me to put pen to paper!

Like I've seemed to have missed out with the recent GFC, the banks would've been a perfect time to jump in at..do i have to wait it out for another catastrophe? Which industries are out of favour atm? REITs? Retail would be weaker? Has media already hit its peak?

yes, annoying little questions but hey, im keen!
kind regards,
futuresage.

It's quite simple. You want to make money?????? Well use a little deductive logic and you'll decide what's worth investing in.

Want to profit from your decisions???????

Sorry can't tell you. That's for YOU to work out. Welcome to ASF!

Cheers
Gumby

 

[cutz]

Fundamentals guy here...

Hi Funnymentals guy,

How do you explain a stock market beating during the GFC part one with a subsequent 50% bull**** rally, surely the mentals didn't change that much in that period.

Get my drift ?


Throw all that stuff out the window, psychological sentiment drives the market, mainstream media helps it along, derivatives are your best friend.

 

[pixel]

Hi Funnymentals guy,

How do you explain a stock market beating during the GFC part one with a subsequent 50% bull**** rally, surely the mentals didn't change that much in that period.

Get my drift ?


Throw all that stuff out the window, psychological sentiment drives the market, mainstream media helps it along, derivatives are your best friend.

Good point, cutz;

A couple of observations, based on this blogger's years of experience:
http://www.rettmer.com.au/TrinityHome/Trinity/Musings.htm#oninfluences:

How do we let ourselves be influenced into buying or selling a particular share?

* Listening to others - assuming they're greater experts
What if they aren't? What if they merely repeat each other, confirming how much in agreement they are, how great a stock this is? I make this observation with particular frequency in chat rooms, where proponents of one opinion keep applauding each other, while shouting down any conflicting views, until they have the thread all to themselves. Less experienced visitors find it's all unanimous - so the share must have a great future. Right?

* Reading magazines/ blogs/ website opinions
Unless the author is 100% independent, 100% expert and trustworthy, reading and quoting the same source with religious regularity carries the same danger as being influenced by the loudest spruikers in a chat room. Sure: It's easy to trust the same opinion, especially if it's repeated daily. Bloggers and magazine "columnists" rarely change their view, and practically nobody will allow facts and contradicting evidence to get in the way of a good story.

* Interpreting company reports/ announcements
When I read these, I always do so in the context and with the thoughts -
- "How will the Market react to this?"
- "Why would this item be published at this particular time?"

ALso check the next article on critical thinking.

 

[Julia]

Many companies make their financial details (balance sheet etc) available on their websites.

If you join Etrade (which you can do at no cost and you do not have to immediately put funds in an a/c) there is a reasonable amount of fundamental info available for all listed companies. Etrade - and I'd suppose other online brokers - also have e.g. filters which let you sort companies by sector, market cap etc.

They also have an Education section which you'd probably find useful including an introduction to TA. The ASX website also has education modules.

 

[newbie trader]

I've been reading through threads but cannot seem to ascertain an answer to this question:

If im holding stocks for less than 1yr but not making over the 6000p/a do I have to pay any kind of tax?

NT

 

[mr.g]

Real newbie - any advice is appreciated

Hey everyone,

So as it stands i havnt been involved in the stock market at all. I started researching everything i could possibly find out about the stock market around about a week ago. Ive just started reading, 'trading for a living'.

This topic has probably been covered in the past, so im sorry for doubling up

Im just after some advice and information on the stock market...
What platforms do you use to buy stocks?
I read a lot about doing your own research... what exactly does this mean? Do i look up individual companies, is there one spot i can find this information... and what information is it i need to look for when it comes to researching (sorry for the dumb questions, but i have very little idea)

Im only looking to invest a small amount to begin with... $500 - $1000... any advice on what would be some good investments.


Thanks guys

 

[brent012]

A few questions.

Ok first question is what is the minimum age for trading on the stock market in Australia? I presume it was 18 but haven't found anything which says you cannot do it if you are under 18. If it is 18 i can get around it by giving my money to my parents and getting them to do it right - or will this lead to tax problems?

I am not currently earning any money but when i was younger I delivered junk mail for awhile and earned a bit over 10 grand after around 5 or so years. I started putting it in as long term deposit 2 or 3 years ago and it was good when the interest rate was about 8% but i think it was only 3.25% last time so when it matures i think i will try investing it elsewhere. I am genuinely interested in business, the stock market and foreign exchanges and am not just doing it to attempt to make quick money.

If I make smart choices and not take dangerous risks with all of the money at once i will probably be able to earn more then what i would with interest right? Lastly, are there any reccomendations for resources offline? Like are there any good financial newspapers, software or brokerages which provide helpful information?

 

[newbie trader]

Re: Real newbie - any advice is appreciated

Hey everyone,

So as it stands i havnt been involved in the stock market at all. I started researching everything i could possibly find out about the stock market around about a week ago. Ive just started reading, 'trading for a living'.

This topic has probably been covered in the past, so im sorry for doubling up

Im just after some advice and information on the stock market...
What platforms do you use to buy stocks?
I read a lot about doing your own research... what exactly does this mean? Do i look up individual companies, is there one spot i can find this information... and what information is it i need to look for when it comes to researching (sorry for the dumb questions, but i have very little idea)

Im only looking to invest a small amount to begin with... $500 - $1000... any advice on what would be some good investments.


Thanks guys

If by platforms you mean broker you should really look around and see what suits your individual trading needs. I for instance trade 'every now and again' and use Commsec's online brokerage service which suits my current needs.

Doing your own research in the context of online forums means that you should never act or rely on what people post as they are only expressing their opinion.

In relation to the plain meaning of 'do your own research' (researching companies etc), I dont think as a newbie I am qualified to answer this so I shall leave it up to someone else. However there are magazines that you can subsribe to that provide you with information on companys and their reccomendations. Theres some information on the online brokerage services websites (once you've created an account you can view this) and there are also subscription services within the brokerage services which allow you to see more detailed reports/information. The information in these magazines/broker websites should only be the foundation of your research into a specific company. So if you see a stock reccommended dont go out and buy it straight away, look into the company in more depth and then make an educated decision.

Unless youre only looking for experience, I don't think it would be beneficial for you to invest anything below 4000/4500. Remember you have to take into account brokerage which on Commsec for example is $40 in and out (therefore if you invested $500 you would need to make 8% to break even). I began investing after about 3yrs of reading and paper/demo trading a bit over 2 months ago with 4500 (therefore, 0.89% to break even).

If you only began looking at the stock market a few weeks ago I would suggest firstly reading some books as well as the posts on this forum as some are very helpful. Once youve read a bit you could maybe try paper/demo trading. Then maybe move into a real trade, but in the end its up to you to choose we all learn differently.

Hope this provides you with some help, although I am quite useless.

 

[mr.g]

Thanks newbie trader, that has helped me a lot so far.

much appreciated.... i have a long way to go lol

 

[pixel]

Re: Real newbie - any advice is appreciated

If you only began looking at the stock market a few weeks ago I would suggest firstly reading some books as well as the posts on this forum as some are very helpful. Once youve read a bit you could maybe try paper/demo trading. Then maybe move into a real trade, but in the end its up to you to choose we all learn differently.

Hope this provides you with some help, although I am quite useless.

Hi NT;
Seems to me, you just graduated from newbie to sound advisor

If I may add a few minor details for Mr.G:
You can start at the ASX website: http://www.asx.com.au/, where you'll find an excellent (and certainly authoritative) Education section.

As for research, click on "Prices, Research & Announcements". If you want to know the fundamentals of a company, that's where you find the bare facts, untarnished by somebody's opinion, analyst's assessment, or - Heaven forbid! - "ulterior motives".

If, like many of us, you intend to get a feel for the odds of a share's new direction, try and get hold of some websites (or seminars - but I'm reluctant to recommend any in particular) that explain the basics in easily understood terms. On http://rettmer.com.au/TrinityHome/Links I have compiled a few websites that I have found offer some solid, neutral advice. (By "neutral" I mean they're not trying to flog you their particular piece of software or advisory letter; they won't mind if you end up buying some lessons from them or their sponsors, but even IncredibleCharts give you a totally free package where you can experiment with indicators to your heart's content.)

As regards your timing: Please let me remind you that Trading is a business and profession like any other. You wouldn't want to design and build your own house before you've done a few years' apprenticeship and studies. Don't believe for one second that you'll become a successful Trader or Investor by simple Deed Poll or declaring "I'll be a Trader starting Noon next Monday."

 

[johenmo]

Re: Real newbie - any advice is appreciated

Im only looking to invest a small amount to begin with... $500 - $1000... any advice on what would be some good investments.
Thanks guys

Take sometime and plot differing amounts of a trade (say $500 increments) against commissions (e.g. CS $20 each way, Etrade $15 each way, Interactive Brokers $6 min each way (0.8%). I did this then channelled more funds to go with IB (still have CS). $12 versus $40 is a lot of % at low parcel size. On $100 buy it's 1.2% vs 4%. I prefer to add teh 3% to my pockets than the broker.

Use the time saving to learn/read/think & decide what you will do - yr tading plan. Lotsa books in the library.

Good luck.