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Discussion in 'Introductions' started by New2Investing, 8th Jun, 2009.

  1. New2Investing

    New2Investing Member

    Joined:
    8th Jun, 2009
    Posts:
    5
    Location:
    VIC
    Hi there everyone,

    I stumbled upon the site when I was searching for products that Ive been advised to invest in. Recently, I've been becoming more interested in knowing what I'm actually investing in, rather than just following what I've been told. Probably a good thing! :p.

    I have always wanted to be smart with my money and invest astutely, but (as I've read) theres a lot of people out there who will happily pretend they know the best way for you to invest, and arent really providing you the BEST option.

    For this reason I wanted to be an educated investor. I'm fine with letting my planner/manager manage the funds (and be paid for good performance/diligence), but I dont want to be suckered into a product that isnt in my best interest.

    With that in mind, I should probably tell you guys/girls a little about myself so you know where I'm coming from financially.

    I'm a 27yo male. earning $70K p.a. in a secure full-time job.
    I've got a $5,000 Macquarie Margin Loan account, which is performing nicely.
    I've got about $15k in a savings account (doing "not much").
    And I have moderate expenses, say $300/week.

    My biggest concern right now is that I dont "truely" know where my next step should be (and why). Which isnt a good thing, seeing as I have a financial advisor. I'm just not getting a "warm & fuzzy" feeling from them.

    I've seen a whole lot of products, namely the latest Macquarie Reflexion - and I've read on here that Macquarie is getting a lot of hate lately - that I've been 'invited' to invest in. As I said earlier, I dont want to be stupid with my money. Infact, at the end of the day, I'd hate to be worse off than a person in my same financial position who doesnt invest anything (through sheer ignorance/dumb luck).

    I know that the markets are down at present, which should provide that buying now is a great position to be in for when they rise... At least thats my take on it.

    So I guess I'm wondering, (and open to any suggestions about what I should even be looking for in a product), what type of thing I should be hearing from my financial advisor in this market.

    I guess you could say this is a bit of a test.
    If it appears that the advice I'm getting from my current advisor is contradictory to what I'm told here (and where it appears that the advice here has my best interest in mind), I may have to reasses my choice in advisors.

    Thanks all.
    J
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi J,

    What are your goals?

    Cheers,

    Dan
     
  3. New2Investing

    New2Investing Member

    Joined:
    8th Jun, 2009
    Posts:
    5
    Location:
    VIC
    Good question Dan. Id really like to become a more aware/intelligent investor and know what was possible to do with my money, know what I actually wanted to do with it, and know some strategies for tax minimization. That said, I'm not trying to become a financial planner/mgr.. I simply want to be informed.

    That said, my current goal is to build a sound investment base. I'd like to 'dabble' a little in future, but ultimately leave it to the experts to continue to build wealth for me.

    That raises a good point though. What are my goals??? Based on the info I presented, I dont even know what I'm aiming for or what could reasonably (dangerous word, I know) be expected to accomplish with that sort of resource. To be honest, I probably should have been told by now.
     
  4. mattybro90

    mattybro90 New Member

    Joined:
    5th Jun, 2009
    Posts:
    3
    Location:
    Gold Coast, QLD
    choose to take my advice or not but coming from an 18 year old who is in the same position as you(minus the 70k job haha) i would say first common sense thing to do is to educate yourself in investing, using trusted sites like this, read all the best sellers (think and grow rich, the science of getting rich, the secret ect) set some realistic attainable goals. have a burning desire to make the money you want and create a basic plan in which you will achieve that money.

    i understand that u might not have the time to do all this straight away since full time work can take up alot of your life but if invest smart and take calculated risks in the next 5-10 years you could definatly see an big improvement in your portfolio with regular income :)

    im in no way a millionaire(not yet) but i have a few *rich mentors* who have helped me out with my stocks and investments and givin me the advice to put me ahead of most other people my age...

    matt out
     
  5. New2Investing

    New2Investing Member

    Joined:
    8th Jun, 2009
    Posts:
    5
    Location:
    VIC
    Thanks Matt.
    Yea, I agree. The biggest challenge I face is not having any time. I work a pretty long week, and dont have the luxury of learning all this stuff - hence I hired a planner, in the hope that I could pay for part of that education, so to speak. I'm not sure if that's what I'm receiving.
     
  6. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    My life philosophy is you can never afford to entirely outsource your finances, education, health or relationships. Most other things you can outsource, but you should never be looking to entirely hand over any of the key elements of your life. So if you don't have time to worry about your financial education, make time. Just my less than humble opinion.

    :p

    That said if I were you I'd be looking into some investment strategies that might look at index funds (relatively simple, safe low fee investments), maybe looking at some exposure to international markets (I like Asia in the long run), I'd also be looking at getting some potential exposure to some major commodity based companies for protection against inflation and in the extreme case potential some gold or silver stocks/ETFs.

    Of course none of this is advice, just areas that I think are definitely worth looking into if you are looking for investments with a 3 year plus time frame. Ultimately you need to work out what is right for you and your situation.

    Of course over the shorter term I think it really is any one's guess - and I think most people could argue a good case for holding any position right now whether it be stocks, bonds, property or commodities, but my gut feeling is from a 3+ year perspective commodities followed by stocks will be the best of the bad bunch.

    That's my two aussie cents. Best of luck.
     
  7. New2Investing

    New2Investing Member

    Joined:
    8th Jun, 2009
    Posts:
    5
    Location:
    VIC
    I completely agree Chris. Its never been my intention to completely outsource it. I just wanted their services in order to start-off in the right direction, while I learnt for myself. During that time (potentially a year or two) my money would already be working for me.

    I understand that all comments provided in this forum are personal opinions only, and in no way represent any form of advice. :)

    On the matter of Macquarie ReFlexion. What are people's attitudes toward that type of product and the 2009 one in particular? I know that in the past there has been some negativity towards this type of product and/or Macquarie, but would the case be different in the current market? Does anyone have any 'opinions' about it that they are willing to share? .. For.. Against...etc. Or even an explanation as to how it operates, so as to 'enlighten' me as to whether its a "real investment" or just smoke and mirrors.
    Cheers.
     
  8. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi J,

    Alot of these "structured" products use dynamic management (Macquarie Reflexion, Perpetual Protected Series and many more). AXA North uses insurance (like car insurance). Both essentially "guarantee" to pay you back your original capital at a certain date in the future.

    Dynamic hedging basically when the market/fund is falling, sells you into cash and buys call options. The main reason is as 70c invested at 6% pa for 6 years will give you back $1 (ok, $0.9929) which is essentially your starting capital. If your capital drops they will sell a small sliver into cash and buy a call option, when it goes back up they will exercise the call option. You can read more about it here http://www.perpetual.com.au/pdf/PPI_capitalprotection.pdf

    AXA North is essentially an insurance contract, just like car insurance you always pay for it and hope never to have to use it. When you do, you just think, thank goodness I've got insurance...Depending on how aggressive your portfolio is the insurance itself could be up to 2.5% pa on top of admin, adviser and investment costs!

    Cheers,

    Dan

    PS This is general information and not investment advice. Speak to your FPA registered Financial Planner before making an investment decision.
     
  9. New2Investing

    New2Investing Member

    Joined:
    8th Jun, 2009
    Posts:
    5
    Location:
    VIC
    Thank you.
    I'm learning stuff already :)
     
  10. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi New2Investing

    I bought a laptop early in 2009 (thanks to Mr Stimulus). I had a computer free decade (got burned by spyware in 99). Instead of programming or hacking(80's) I've discovered social networking. Google found Invested and Bogleheads.

    They say that Knowledge is power, but I say Knowledge is comfort. When I first posted on this site, I was deflated and fearful. Three months on and I'm confident again. I achieved this by reading all the threads that suited my circumstances. Asked lots of questions. Nothing is stupid. Read some good books when I had the time.

    I'd love to have the wage you've got. Invest smart, and you will have a Ferrari and 2 blondes at my age! New2Investing you have plenty of time and lots of opportunity. Make the most of it.



    Cheers, Johny.



    Johny
     
  11. Dolfinwise

    Dolfinwise Well-Known Member

    Joined:
    30th Sep, 2009
    Posts:
    47
    Location:
    Brisbane
    Reflections

    Chris,

    Packaged products such as Macquarie reflections ultimately benefit only a few investors in my experience. The fees involved mean the provider always does well out of it but once you consider all the conditions involved (fixed contract length, potential large exit fees for early redemption, complex option arranges or other protection mechanism's fees, the interest costs etc) more often than not the investor would have got a better return by steadily investing into a traditional solid assets such straight shares, index managed fund etc, or even cash based savings plan.

    My golden rules of investing are: (1) Never invest in anything you don't fully understand. ((2) Anything that promises a high return necessarily has high risk attached to it (you need to find what the risk is an then make an informed decision on whether or not you want to accept that risk). (3) Only buy investments that fit with your longer term goals and (4) always think about liquidity.


    Good luck with it.

    Jason Bragger
    Dolfinwise - Brisbane Financial Planners