Join our investing community

Where to Start

Discussion in 'Introductions' started by kymg1963, 23rd Jun, 2006.

  1. kymg1963

    kymg1963 New Member

    Joined:
    23rd Jun, 2006
    Posts:
    4
    Location:
    Berkeley Vale, NSW
    Hello all, very new at this, so dont mind some silly questions. to cut a long storie short, i have a back injury and need to find a new income. I have been intrested in the stock market for a long time. I have read a few articles and believe that there are stragaties that can be applied to the market to achive an income. Can some one shed more light for me please. :confused: Thanks Kym.:)
     
  2. Giddo

    Giddo Active Member

    Joined:
    9th Jun, 2006
    Posts:
    42
    Location:
    SE Qld
    Welcome Kymg1963.

    Just thought i would say welcome - Hope you find the info and help you want. This forum is very good, from what I have seen so far.

    I am not yet into shares -I am just waiting for my cab driver to tell me when to buy!!:D

    I have been into property for quite a while now.
    Again - welcome:)
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Hi Kym

    Sorry to hear of your injury. If I can make a couple of suggestions:

    1) don't rush into anything - take your time to evaluate the options available to you
    2) figure out where you are at financially at the moment in terms of what you own, what you owe, how much income you have and how much income you need to live and how much you want
    3) get some advice - you don't have to take it, but at least you'll hopefully then make some informed decisions. Talk to a couple of financial planners - the Navra Financial Services team are very good. The Financial Planning Association has a website that may provide some useful info as well.
    4) evaluate the strategies available to you
    5) make sure your goals are realistic. The period from early-mid 2003 to mid may this year has been an exceptional time for great returns in the share market. History would suggestion there should be a reversion to usual returns eventually. Who knows when? ;)
    6) implement your strategies (this can be done gradually - don't be in a hurry to invest your money)
    7) regularly review how your investing is going and whether it is meeting your goals in terms of income and growth.

    Some key questions you'll need to confront are:

    1) how much time do you have to commit to your investing?
    2) are you prepared to read, study and practice your skills to get better at it?
    3) what's your appetite for risk? How much can you afford to lose?
    4) are you more suited to direct share investing or outsourcing management to invest through managed funds. Do you have the "psychology" to be a share trader? There are income funds, such as Navrainvest funds which distribute quarterly income...will that provide sufficiently regular income for you? Do they suit your risk profile?
    5) Are shares the right instrument for you? Are derivatives such as options or contracts for difference a more appropriate instrument?
    6) what about leverage or gearing? I.e. are you prepared to borrow to invest, and if so how will you fund the interest payments?

    Just some preliminary thoughts. Perhaps you can elaborate (so far as you're comfortable doing so) on your experience and financial position so far? That will help others give a more specific opinion/suggestions.

    Cheers
    N.
     
  4. kymg1963

    kymg1963 New Member

    Joined:
    23rd Jun, 2006
    Posts:
    4
    Location:
    Berkeley Vale, NSW
    Thank you for your thoughts and ideas, every little bit helps. I have really just been siting on the fence lately, looking at different web sites and gathering all the information that i can get, and thats a lot of reading.I have been reading about Andrew demitri's stratagies and also jamie macintyres home study program. Has anyone got any thoughts on their stratagies? I have $200.000 to invest and as i said before i really need to generate an income from this money.Maybe 5 to 10% per month would be very nice, Would that be a reasonable amount or am i off with the fairies a bit.:(. One idea i had was if i put $100.000 in to a managed fund and didnt touch it, just let the intrest compound and left it there. And followed a trading diary, like Andrew Demitri,s with the other $100.000 to live on if that was possible. I have lots of time to study and very keen to learn. Any ideas would be very welcome. Thank you Kym
     
  5. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Hi Kym

    Great to set your sights high. But whilst possible, I think your goal of 5-10% per month is Extremely UNREALISTIC!!!!

    Warren Buffett is the world's 2nd richest man and widely regarded as the world's greatest investor. At Berkshire Hathaway he's managed over the last 40 odd years around 22% PER YEAR and he's even had one negative year.

    Please understand that I mean this with the greatest respect and to try to assist you....But gee what makes you think you can beat him??? Especially in the long term...

    Jamie McIntyre keeps popping up on the "wealth creation" scene. Read here what ASIC's view is:

    http://www.asic.gov.au/asic/asic_pub.nsf/byheadline/05-85+ASIC+action+stops+further+promotion+of+wealth+creation+seminars?openDocument

    You can draw your own conclusions.

    Mate I'd be VERY careful about allocating HALF my capital to begin a trading program without experience and a track record of succesful trading behind me. I don't want to stop you from "having a go" and there's certainly no teacher like experience...BUT it seems to me you're in an arguably precarious financial position and PRESERVATION of capital needs to be your number one rule until you are confident in the strategies for you to move forward.

    All the best
    Cheers
    N.
     
  6. kymg1963

    kymg1963 New Member

    Joined:
    23rd Jun, 2006
    Posts:
    4
    Location:
    Berkeley Vale, NSW
    Hello Nigal, thankyou for your advise. I definately wont be jumping into anything just yet. I know i have lots to learn,and a long way to go but all very interesting.Thanks Kym.
     
  7. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    Hi Kym,

    Nigel's right - 5-10% per month is unrealistic. But you have $200 000, what sort of return do you need? Are you eligible for a pension because of your back?

    As for generating income, I know people who buy products at garage sales and re-sell them on Ebay. Another option is to use your spare time to your advantage by making lots of lowball offers on properties (say 100 properties at over 15% less than than their advertised value) with the hope of being offered 10, and selecting 1 of those. Re-sell it and you can make yourself $50 000. I haven't done this before but I know it can be done.
     
  8. kymg1963

    kymg1963 New Member

    Joined:
    23rd Jun, 2006
    Posts:
    4
    Location:
    Berkeley Vale, NSW
    Hi Glebe, Thanks for your opion. I am in the process of going from doctor to doctor, hydrotherapy, doctor to centrelink, one big merry go round, just to get the disabled pension.It would be good to get about 1% to 2% per month on $200.000:cool: . Do you think that is more realistic. I have sold a few things on e-bay, which is good.
    I have been looking at managed funds to see what % i can get from them.I am still studing the stock market as i find it very interesting and like to learn different things, and the potential to make money, if i ever get good enough.
    Thanks again, i am open to any opions and do appreciate them. Thanks Kym.
     
  9. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    "It would be good to get about 1% to 2% per month on $200.000.I have been looking at managed funds to see what % i can get from them.
    I am still studing the stock market as i find it very interesting and like to learn different things, and the potential to make money, if i ever get good enough ".


    Kim,

    It depends where you park your money...
    You may be able to get 17- 20% ( + - ) return per year on your $ 200 000 if you invest in a good Fund. The problem is to find a good Fund - and depends what you are aiming for. You may want income or growth.
    Do not forget that past performance doesn't guarantee future performance. During bull market most players are making money. During a bear market most of them are losing money.
    You can learn how to invest/trade Stock Market but this is a long way from place you are now to be very efficient and to outperform Fund Managers.
    Do not expect big gains in the very short time. Fast and big money exists if you know how to "play" this game.

    Consider below :
    IF you double a dollar 20 times you will have over one million dollars.
    How long it will take you to do it? and we not taking inflation into account.

    $ Dollars $ Doubled
    $1.00 $2.00
    $2.00 $4.00
    $4.00 $8.00
    $8.00 $16.00
    $16.00 $32.00
    $32.00 $64.00
    $64.00 $128.00
    $128.00 $256.00
    $256.00 $512.00
    $512.00 $1,024.00
    $1,024.00 $2,048.00
    $2,048.00 $4,096.00
    $4,096.00 $8,192.00
    $8,192.00 $16,384.00
    $16,384.00 $32,768.00
    $32,768.00 $65,536.00
    $65,536.00 $131,072.00
    $131,072.00 $262,144.00
    $262,144.00 $524,288.00
    $524,288.00 $1,048,576.00

    Good Luck:)