Stock market knowledge anyone?

LMuz25 on 11/08/2016 - 20:25

Hello Ozbargainers,

My first forum so please be kind and helpful :)

Just wondering if someone can help me out about stock market and shares. How does it work and how to start. I would love to know someone who is already doing this and can teach me a bit to start. I used to do trading back in my home country with my dad when i was like 16. But then i came to Melbourne and now living here and working part time in retail. Im just 22 years old and i`ve seen some threads on OZbargain saying this is the perfect age to invest in shares ? I know about how you buy and sell shares and predict about market fluctuation. Who to consult with in start and how much money will be required?

Thank you in advance :)

Financial

Comments

  • holdenmg on 11/08/2016 - 20:29
    +3

    http://www.asx.com.au/education/first-time-investors.htm

    You can also attend the ASA Meetings as a Guest:
    https://www.australianshareholders.com.au/events?keys=&relat…
    but the upcoming Big Day Out:
    https://www.australianshareholders.com.au/events/melbourne-i… is a Payable Event.

    • Muz25 on 11/08/2016 - 20:37

      Thanks for that :) Already read it. But just looking for someone who`s already doing this and can teach for the start. Just the start. How much will be good enough to invest with and what to invest in ? about Brokers ?

      • holdenmg on 11/08/2016 - 20:48
        +1

        You can buy Shares in ASX Listed Companies via Brokers and be Issuer Sponsored or CHESS Sponsored.

        Min Parcel is about $3000-$5000.

        A common way to go is via an Online Broker like Commsec (Commonwealth Securities) Westpac Broking or ANZ Share Investing (formerly eTrade).

        These Brokers also offer Bundles such as:
        http://www.smh.com.au/news/money/start-on-a-sixpack/2006/05/…

        https://shareinvesting.anz.com/QuotesAndResearch/TradingIdea…

        https://www2.commsec.com.au/Public/Trading/AustralianShares.…

        (I'm pretty sure Westpac have one).

        You can also select Companies like Argo or AFIC.

        But you work in retail, is the company you work for listed?

        • moar bargains on 12/08/2016 - 14:54
          +1

          Min Parcel is about $3000-$5000.

          This might be true when participating in IPOs (initial public offers), but for online broking accounts from the big banks, the minimum is usually $500 (except for ANZ which is $600, so it could be set by the broker?).
          I'm not sure of the rules around this, but this has been my experience.

          These Brokers also offer Bundles such as: ….. (I'm pretty sure Westpac have one).

          I'm not aware of Westpac offering bundles like this, but I could be wrong.

        • Muz25 on 12/08/2016 - 20:08

          Thank you. I will look forward to get more info how does commsec works (so many people recommended me to start from there) and the place where i work is not a listed company.

  • Mumbles on 11/08/2016 - 20:57
    +4

    If you are looking for mentors and stuff try googling for investor clubs.

    There's two schools of share traders. There's Fundamental and there's Technical analysis. Fundamental investors are usually less frantic, research how the business + industry (accounts, competitors, government legislation, global trends, etc). Technical investors are the opposite and don't care about what the company's business is they are playing against other investors and monitoring the buy/sell trades of other people.

    Google "share trading fundamental vs technical".

    If you're new to shares then I highly recommend starting with Fundamental analysis and staying away from Technical. Once you understand what your own appetite is for risk and ability to manage emotions and stress then maybe Technical.

    Each mentor, investor club, financial adviser, book author has their own person preferences and priorities. Don't following someone who thinks counter to you.

    I think investment should be fun and constructive. A fun way to get into share trading, especially Technical analysis is to do virtual trades. Google search for "virtual share trading" apps and games.

  • nickomac on 11/08/2016 - 22:04
    +2

    Have a look at the ASX share trading game, it's just opened up and will let you try your hand at investing before actually putting any money down.

    http://www.asx.com.au/education/sharemarket-games.htm

    • Muz25 on 12/08/2016 - 15:34

      Thanks TA.

  • -.- on 11/08/2016 - 22:16
    +3

    You can't talk about shares without mentioning the (at times) notorious Hot Copper forums (http://hotcopper.com.au/). The one shop stop for all your speculative needs, up and down ramping and amateur charters.

    • moar bargains on 12/08/2016 - 16:24

      Ha! Yes… Not to mention their regular spruiks: "This growing biotech could make you a millionaire" or whatever! Got burned a couple of times myself with them. :S I like to think I'm not so gullible anymore!

      Have you heard they want to do an IPO?

  • chumlee on 11/08/2016 - 22:18
    +1

    Read The Art of Trading first.

  • Musing Outloud on 12/08/2016 - 02:42
    +1

    And Trading for a Living by Alexander Elder

  • altomic on 12/08/2016 - 07:13
    +1

    Blue Horseshoe loves Anacott Steel

  • Euphemistic on 12/08/2016 - 09:26
    +1

    Sounds like you know what to look for in shares. Get an online broking account and go for your life. I've got one via my bank as it was a reasonable cost (only per transaction) at the time. My small occasional trades have been $5k-ish other than selling a bunch of CBA shares to buy a house.

    Disclaimer: I am not a trader.

    • Muz25 on 12/08/2016 - 20:34

      haha i dont really know what to look in shares. thats why looking for someone who is already doing this, doesnt matter succesfully or unsuccesfully. so i can spend a week or two sitting with him looking how it goes and what to look for when you buy or sell :) plus i dont want to spend much in start. like i will probably keep my retail job and work on shares whenever i get chance to. i start work late every day so i can do this in morning.

  • indium on 12/08/2016 - 09:46
    +1

    I can recommend http://www.ruleoneinvesting.com/podcast/

    Also the books 'The Dhandho Investor' and 'The Most Important Thing'.

    Only been learning for a few months but so far so good.

    • Muz25 on 12/08/2016 - 20:05

      Thanks TA. Will surely get onto it. Are you trading ATM or just learning ?

      • indium on 13/08/2016 - 02:12

        Yeh currently investing, trying to put into practice what I learn and make my mistakes now while I'm young and can afford to

  • jhmtaylor on 12/08/2016 - 12:26
    +4

    I have been investing successfully for over 30 years and made quite a few mistakes along the way.

    For a newbie I would recommend investing in Listed Investment Companies like AFI, ARG, MLT, ALF, QVE, WHF. These companies specialise in investing other companies. They tick all the boxes of good investing principles (Expert analysis, diversity, low/no gearing). Learn about franking credits and dividend reinvestment plans

    Subscribe to a good investing newsletter like MarcusToday and read it.

    The hardest lesson to learn, is learn how and when to say NO!
    Unless it is the Government listing a company as an IPO (Eg Medibank), do not participate in IPO's, because the ones you are offered are usually the ones you do not want. (Hint Warren Buffet, arguably the worlds most successful investor, has never participated in an IPO)
    Don't follow hunches, rumours etc
    When everyone is talking about the stock market, sell. When everyone is selling stocks, wait a little while and buy.
    Be wary of advice from advisors who have a conflict of interest.

    • moar bargains on 12/08/2016 - 15:03
      +2

      This is all excellent advice, and I would second it.

    • Muz25 on 12/08/2016 - 20:39

      thank you very much for your concern. Very informative. Plus do you keep shares for long term or you do purchase and sell each day? which is more effective ? and any good broker to start with you recommend who can teach me along ?

      • jhmtaylor on 14/08/2016 - 10:50

        When you invest in LIC's you are investing in long term growth of share price and dividends. The share prices are not as volatile as others and so they are suitable for passive investing. You should only need to look at the price of an LIC once per year. If you invested 5% of your after tax income per year and reinvested the dividends through Dividend Reinvestment Plans, on top of your superannuation you should be able to retire early and have a comfortable retirement.

        Forgot to add. There is an excellent discussion thread about LICs on https://www.propertychat.com.au/community/threads/listed-inv…. There are many highly experienced investors giving top advice freely. Hint read all of the thread before asking questions

    • [Deactivated] on 14/08/2016 - 12:03

      When everyone is talking about the stock market, sell. When everyone is selling stocks, wait a little while and buy.

      This is the best advice. Remember when everyone said QAN is doomed and will never recover from their financial disaster? Everyone sold their stocks and I bought some more at $1.42 per stock. Cheap oil prices have devastated many Australian mining companies, but not me.

  • boomramada on 12/08/2016 - 13:59
    +1

    Get a broker which is easy to use, commsec.com.au would be best, they usually have $600* free brokerage – no brokerage fees on your first.
    Otherwise each trade would be around $30 (with commsec).
    Recommended trade value would be around $5k
    Then you have to decided, quick $$ or long team (with good share dividends).
    If you buy and sell within short team profit, beware of capital gain tax, but you get discount on capital gain tax if you kept for year.

    Before buy, monitor the market, if you are a first time buyer, stick with popular shares.

    There is no perfect time for share market but perfect time would be if you are financially stable.

    • Muz25 on 12/08/2016 - 19:53

      so this all you said is about long term investment ? All i used to do is buy and sell same day looking at the share values and market condition. Sometimes keep on hold but i`m pretty sure you pay some amount to broker to keep a share on hold. Are you also doing this at the moment ? Which broker are you with ? P.S (when i said i used to do means back in my home country)

      • moar bargains on 13/08/2016 - 00:37

        All of the brokerage accounts of the big banks charge per trade, not for holding. So you will pay much more if you buy and sell every day, than if you hold. If you want to trade like that, there are probably better accounts than the big 4, but as I said below, I wouldn't suggest this.

  • moar bargains on 12/08/2016 - 16:20
    +5

    I've only recently started investing myself, so here's some things I've found helpful in starting out.

    One of the most important things to realise, especially when you're just starting out, is that when you invest in shares, is that you are not just buying a three letter code. You are becoming a partial owner of that business. So you need to know what the business does, how it makes money, if it is going to be able to make more money in the future than it does today, and what are the risks preventing that from happening.
    Just buying a code (e.g. XYZ), with the hope of selling it later for a higher price is speculating, and it's much easier to do that at the casino.

    So, I suggest the following:
    1. You are going to make mistakes, so self education has to be first priority. Start reading widely about the economy, share market, etc. Read the business sections of the newspaper. I recommend Livewire. It's free to sign up, and has a great variety of insights from all sorts of people. Their Buy-Hold-Sell videos are also really interesting, as they give a great insight into what fund managers look for when they buy shares.
    2. There are some dodgy publications out there though. DO NOT BUY a (usually small) company which they suggest will "double by next year", or "turn $1000 into $1M" or whatever. They are very tempting, and it's easy to get caught up in the hype (I know - I did it myself a few times and I'm yet to come out ahead on any of them!).
    3. When you're ready to start, open an online investment account with any of the Big 4 banks. I've tried them all over the last 12 months, and Commsec is my recommendation at the moment. Then you can transfer some cash and buy your first shares!
    4. You can start with $500, so in terms of suggestions of shares to buy, look a Listed Investment Company (LIC) to start with. WAM is one that I like (and own), and has an excellent track record, and @jhmtaylor has listed several others above. You could even buy two or 3 of them. I would suggest you don't buy any of the top 10 companies right now, the so called "Blue-chips". With one exception, they are all facing various issues at the moment.
    5. As you save more money to invest, and learn more about what to look for in a company, and which ones are likely to grow and make money in the future, you can start to buy companies that you select for yourself.
    6. The sharemarket game is a useful tool, however it doesn't teach you about a lot of the real-life, practical aspects of share ownership! E.g. opening a brokerage account, Holder Identification Numbers, CHESS Holding statements, transferring money, dividends and franking credits, tax, dividend reinvestment plans, etc, etc, etc. Lots of this you will only learn by doing.

    Later on, as you become more experienced, you may decide you want to start trading, and holding shares for a much shorter time-frame. However, doing this to begin with is fraught with danger! This is where the sharemarket game may be useful.

    Hope that helps. Feel free to reply or message me directly if you have further questions.

    • Muz25 on 12/08/2016 - 19:42

      Hey there,

      Thanks alot for all this information. Just wondering how can i contact you in person ? I don`t know how to message on ozbargain :3

      • moar bargains on 13/08/2016 - 00:34

        If you tap/click on my username, there should be a box pop up, and at the bottom of that, it will say start a conversation. :)

  • mrtin on 13/08/2016 - 11:04
    +1

    Here are a few things to also consider-

    Percentages vary (80-95%) but the majority of traders lose money. Many times just breaking even is considered an achievement. Everyone talks about their wins but it is common for losing trades to hurt the overall return.

    Reports show majority professional fund managers tend to underperform the respective market index.

    I am a big believer of diversification and with a small amount to start, you will find it tough to be able to get a good risk adjusted return.

    Good luck and seek advice i would say

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