Investing in share ... help !!!

Hi,

I'm thinking about starting my investment journey in share, what is the best approach ? Is it better to buy every 2-4 weeks, e.g. around 4K each time ? Is 4K too low ?

The share market seems to be so high now !!!

Thanks

Kelly

 

I cannot give you any advice as I'm not licensed to do so. Others may be more adventurous in that regard.

All I can suggest is you sit back and think. Decide whether it's direct shares, Listed Investment Companies, Exchange Traded Funds you wish to hold, if you want to trade, how will you feel if the share price goes down after you've bought, how long you want to hold the shares. Basically know who you are.

Once you have settled on that stop internally flapping about and just do it.

 

4k is not to low. It is a good amount, under 3k the brokerage% gets a little more than I like but if the shares dip you can easily make it up You could put in a low ball order for a small amount if it doesn't fill increase it when you have more funds. It does seem a little high but one of the biggest traps is "anchoring" . Just start now with a small position so you can have a win if it goes up. and have plenty to invest latter so you can have a win if it goes down. If you invest in sound well run buisineses preferably founder lead with growing revenue it doesn't matter what 300 other companies do.

 

share market you can be patient so probably more education is better at this point in time
things can turn very fast in the market, up 5% - 10% can be taken away with a few bad weeks.

it is not the same as properties and required a different mind set but what mind set you tag to is based on your background, knowledge and how long you been exposed to it.

here are some good books you can read

https://www.amazon.com/Common-Stocks-Uncommon-Profits-Writings/dp/0471445509

https://www.amazon.com/Business-Adv...assic-Street/&qid=1554264140&s=gateway&sr=8-1

https://www.amazon.com/One-Up-Wall-...n+wall+street&qid=1554264172&s=gateway&sr=8-1

https://www.amazon.com/Intelligent-...y&sprefix=intelligent+investor,aps,406&sr=8-1

(Just chapter 8 - Mr Market and Chapter 20 - Margin of safety) the rest are boring stuff and I found it irrelevant)

and if you want more I can give more

 

My advice is to learn as much as you can. When you say invest in share you probably mean shares (plural) ie more than one share unless you're thinking of those Hathaway shares which are worth around 300K each.

Well, look, on the other hand, you could buy a single share in a small coy for, say, 5 cents but you'll probably need several lifetimes to make some decent money out of it.

 

10 year charts looking great now

 

Thank you every one for the reply. Yes, I'm thinking about buying shares in LIC companies, e.g. AFI and index e.g. VAS. I also like bank shares e.g. CBA.

I can spend ~4K every 2-4 weeks, just need to decide on how to start. I had already invested in property... just need to kick start the share portfolio.

 

Why VAS, 300 companies, 270 of them not exactly great companies (with a Global View) or companies that I would want to be invested in . Why not NDQ and get 100 of the best companies ran by the best people in the world, It has out performed VAS. I prefer Macquarie bank to CBA better earnings growth and some international exposure You will already be overweight with banks and financials with VAS I don't think you need CBA if you have VAS,. A more specific ETF such as HACK which is predominantly about 30 companies in Global Cybersecurity if one is disrupted it will probably be by one of the other held companies, and it shouldn't be affected by recession like VAS, cybersecurity It is a growing necessity.

 

Hi, you're doing well if you can invest 4K every 2 weeks. It's a fantastic way to start.

This is what I'd do. And it is NOT advice cos like most people, I'm not qualified to give advice.

1) Choose a growth stock. My money is all in 2 shares at the moment. the choice one is currently at about 12x P.E. It is expected to achieve 200M in earnings. this means that at the same P.E. ratio, the price can double. Again. In the 10 years that I held this share, the price doubled in 6 months, then it went bonkers and increased to 100x. Then it dipped and then it stayed at about the same price for 3 years. And in the last 2 years, it went bananas. the current price is a staggering 1000x what I paid in 2012.

the problem is we don't know which company will deliver that kind of result.

2) The "safer" method is to go for a well-run company like QBE. the current price is higher than what I'd like to pay but it is not too high. Steady accumulation allows me to take profit when I think the price is high enough. And steady accumulation every month means that the average price will be in line with what the share is worth.

3) Choose a stock that has some history. The one that I'd go for is AMP. It's very very close to historical lows. I'd throw the kitchen sink at it. Unless the company goes into liquidation, I would be VERY confident that at some point, it'd come good.

But I'm a very high risk investor. I can have some spectacular losses! with AMP, my attitude is this: if I lose money, I'd be in some august company!!

Sometimes the 'risky' way is the safe way. My preference would be 1) and 3)

Good luck,

KY

 

Amazing post @kum yin lau . I have never seen such a flamboyant approach on this forum.

I wish you all the best with it!

Greg

 

A question...I assume you would invest say up to $100K or more with your approach 1 and 3? BUT, would you follow same approach if you say had $1M or more to invest?
Just curious whether share market investors follow same strategy with little or large some of money regardless?
Can anyone else enlighten me or would like to share?

 

Got $100K (not $500K as advertised)? Then perhaps the following will do the job. Once initial $100K invested then set up periodic auto BPay (as little as $1K) to dollar cost average into fund. No broker required. Removes the temptation to time the market / fiddle and minimises other behavioural weaknesses. That is, it protects you from the main reason most fail being YOURSELF.

https://api.vanguard.com/rs/gre/gls/1.3.0/documents/8469/au

Don’t have $100k then the listed version of the above will do the job. Select a low cost online broker. To minimise the tendency of trying to be smart whenever you have around $4K invest it straight away. Rinse and repeat:

https://api.vanguard.com/rs/gre/gls/1.3.0/documents/11894/au

As close to set & forget as you can get so you can focus on what really matters. That is, earning the best income possible, budgeting, saving as much as you can and living your life. All asset classes are covered both locally and globally. Great risk management. Nothing to do but this will outperform the vast majority of professional investors.

 

I strongly agree with KY on point 1, revenue growth over 30% makes what look expensive, cheap very quickly I strongly disagree with with KY on point 2, I avoid insurance companies and would give QBE a wide berth. I think AMP is a dog I held it for 30 years share price fell for most of that time, I thought it was OK thinking I get more shares with the DRP when the price fell , now it is half the price effectively halving the dividends, compounding in reverse, and 100's of thousands lost in opportunity cost. If you want to invest in financials I think CGF would be better, and what I suggested in early Jan would be better again which is up 19% since then NWL.

 

And there you go.

Within a few short posts you've had recommendations ranging from investing in the whole market, to somehow picking the 30 good stocks, to taking a massive punt on AMP.

This is why research is good.

 

Buy FMG

In January this year you would be up around 90%

 

Perhaps a combination. The overall markets as a major core. Although not necessary if one wants to try their luck then add some direct bets as satellites. Known as core and satellite approach. If your own bets are crap then at least the majority of the portfolio gives you the market return.

However be real and understand who you’re competing against if thinking of trying to analyse and select direct shares.

 

I would tend to agree with @Nodrog, my partner is invested with the managed fund wholesale and please dont underestimate the value of actually enjoying and living your life instead of logging onto commsec to see if a buy order has been met or how the squiggly line is going, is the stock in the red or green today!

As well as maintaining her hobbies and health and fitness goals (gym) reading, as well as career aspirations instead of worrying about MER % of .29 v .27. How about a 15k work bonus for achieving KPI's and scholarship and subsidy to go back to uni for doctors degree or MBA!!!

She bascially doesn't want to worry about this and she has a couple lics too but uses the bpay option to dca every month, may not be the perfect plan, but as they say the enemy of a good plan is the dream of a perfect plan!

Lics sidestepped some real shockers in the 2000's while the etfs had to hold them but as @Nodrog always mentions they are self cleaning and in with the new and out with the old stocks!

It would be interesting to see an asx top 50 from 30 years ago till now tho as this little melon head is thinking out aloud!

 

Of course I’m still a fan of LICs but then new investors sees this strange thing called NTA and get themselves tied up in knots about discounts / premiums and when they should buy. It never seems like the right time relative to the market given the way LICs behave.

Add to that the threat to franking credit refunds then they’ll likely worry when they stumble upon something in the media suggesting LICs will be more adversely impacted than other types of funds. More confusion and worry for the new investor. It all starts to seem too worrisome and difficult.

Hence why I suggested buying the overall market as in a globally diversified index fund. Everything is covered in this “flow through” investing structure without the legislative risk of a company structure.

Success in investing especially in avoiding behavioural pitfalls is about choosing the path of least regret. The options I mentioned earlier in so so so many ways has a better chance of achieving that objective.

 

Hi Kelly, enough opinions here to sink your teeth into!!

I believe we must invest according to our own character. That's why I'll never go the LIC way. It simply doesn't work for me.

Time in the market is important enough so what you do at 4K per fortnight will give you the time you need. Me, I try to also time my entry. CBA and NAB are fantastic if you bought them in 09, not quite as fantastic at today's prices.

when I see a one off event such as BHP at $15, I get really excited. I actually spent 135K when it started falling from $18

That's why I'll put money on AMP at today's prices. Give it another 24 months and we'll see if it goes back to $3. Note that that's close to 50%

And to answer the question, with a million bucks, I'd diversify, probably around 10 stocks.

And if you choose to buy shares directly, once every 4 weeks will save you a small amount in transaction costs - $10 for $1K, $19.95 for $10K

KY