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New to investments, but keen to learn.

Discussion in 'Introductions' started by TopsideSoul, 25th Oct, 2007.

  1. TopsideSoul

    TopsideSoul New Member

    Joined:
    25th Oct, 2007
    Posts:
    4
    Location:
    Melbourne
    Hi everyone. Thought I'd go ahead and write my first post to this very friendly and helpful forum. As the thread title says, I'm new to investments and have spent the past month or so reading and absorbing what information I can. I am in my mid 20's and have been working full time for about a year and half. I'd like to invest the savings I have accumulated thus far but just like any beginner I am hesitant because of the vast range of choices out there.

    My plan at the moment is to spread some of my savings around in a few investments. One is to open up a share trading account, probably CommSec, and buy some blue chip shares (probably BHP, RIO and the 4 big banks). I'm in it for the long term so for now I will be buying and holding.

    I've read a few good things about index funds and have been looking into the Vanguard range (Australian Shares and Property Securities). Is an actively managed fund a better way to go?

    Does this sound like a reasonable way to get started in investing? I have also been contemplating whether it would be worthwhile to see a financial adviser at this point? My investment will probably range from 15K-20K. Is it it better to learn myself at first and start seeing an adviser when my portfolio has grown? What approach have other beginners taken?
     
  2. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    I think what you are doing is more than reasonable. I might add that you should try to avoid looking at the performance every day, esp if you are starting a long term portfolio.

    Why pay an advisor when you have us!
     
  3. samaka

    samaka Well-Known Member

    Joined:
    30th Sep, 2007
    Posts:
    308
    Location:
    Sydney
    Exactly - why pay one person for 1 opinion, when you can get multiple opinions for free!
     
  4. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    I definitely think you're on the right track!

    One thing I would do - if you're going to buy BHP, RIO and the banks, you might also want to buy 'STW' which is a listed fund that buys the entire ASX200 index.
     
  5. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    I agree with Glebe, consider that
    BHP 12% of ASX200
    RIO 2% CBA 6% NAB 5% ANZ 4% WBC 4%
    Total 35%

    You might be better starting with an ETF over the ASX200, I know Glebe likes the Spiders, STW etc. Good idea. You'll also save yourself a bit in brokerage!

    Since you are starting out, it makes sense to follow common practice and base your portfolio in the index. It's what most fund managers do!
    Then, as you learn more, you can start to bias your portfolio to your own preferences.

    Most people here will have a story to tell, about how they started out, maybe with a 'hot tip' from a friend (my uncle in my case!), and in hindsight they wished they had just bought the index from day one.

    Do you plan to reinvest the dividends or take them as cash? This might affect your decision, since not all companies allow div reinvestment (eg BHP). But the STW fund does, I'm pretty sure.

    Investing is a learning experience, and you've made a great start, simply by asking a question while still in your twenties! The companies you mentioned are staples of an Australian share portfolio, all going to be around for many years to come, and if you choose to, just go with them.

    Nobody will be able to say you made a poor decision with those companies (I certainly won't, since I own them all, and they make up 45% of my ASX portfolio!)

    By the way, we're a picky lot, us Aussies. ANZ profit up 13% near $4 billion, but share price savaged, down >3% today. La la la.

    Welcome to the forum.