Achieving wealth through shares...how?

[dajackal]

Hi All,

Hoping someone might be able to point me to some materials on achieving wealth through investing in the share market.

Ever since i read Yardney's book back in 2007, I've been hooked on property investing and now have a sizeable property portfolio. His book helped me realise it was possible to generate wealth through property investing.

Now I'd like to learn up on share investing. I spent an hour at Dymocks and only found books like technical analysis vs fundamental analysis. I'm not interesting in any of that, rather, how to generate wealth. I'm wanting to learn how to use ETF's, index funds, etc. with gearing to generate wealth, or similar strategies. Basically a Yardney equivalent for share investing where I'm confident enough to project CG returns and cashflow analysis, for example.

Hope you might be able to help!
-J

 

[Nth Brisbanite]

Hi All,

Hoping someone might be able to point me to some materials on achieving wealth through investing in the share market.

This is the wrong forum to get advice on shares. A good place to go to is aussiestockforums.com.au

 

[Aaron_C]

For shares, even the 'analysts' get it wrong all the time...

 

[redwing]

This is the wrong forum to get advice on shares. A good place to go to is aussiestockforums.com.au

Really, I've seen many a newbie take a hammering on share forums for asking the basics

We're much nicer here

here's an interesting example thread Top 10 Long-Term Buy and Hold Shares

And

Making serious money from property all luck?

How I got from just a PPOR to multi millionaire retiree in 5 years using only OPM.

A good lesson I learnt over the GFC and the subsequent sharemarket dive was that

"The Markets can remain irrational a lot longer than you and I can remain solvent."

 

[Sunfish]

The Markets can remain irrational a lot longer than you and I can remain solvent."

Please give John Maynard Keynes credit where due.

In answer to the OP: This may be a good time to be reading, learning, observing and being patient. I am not convinced a sensible, diversified portfolio will outperform an outrageously lop-sided one in the next few years.

As Redwing seems to be suggesting, you could do yourself a lot of harm following good advice.

 

[Peter_Tersteeg]

The problem with share trading is the trading part. Shares can be a solid investment but people get caught up in the buying and selling via numerous strategies. They also don't give real consideration to their own risk profile and integrate this into their strategy. As a result, they're often doing little more than gambling.

Personally I prefer to apply the same strategy to shares as I do to properties. Buy good quality at a reasonable price with a long term buy and hold outlook.

 

[dajackal]

The problem with share trading is the trading part. Shares can be a solid investment but people get caught up in the buying and selling via numerous strategies. They also don't give real consideration to their own risk profile and integrate this into their strategy. As a result, they're often doing little more than gambling.

Personally I prefer to apply the same strategy to shares as I do to properties. Buy good quality at a reasonable price with a long term buy and hold outlook.

totally agree! that's why I was thinking of getting into exchange traded funds (index funds) with low management fee for diversification and to take the trading part completely out of the picture.

i want to apply the same strategy as property, which is to ramp up my total asset base and let compounding do its magic over the long term...

still trying to find a book/ebook/seminar that'll guide me down that path...

 

[redwing]

Please give John Maynard Keynes credit where due.

In answer to the OP: This may be a good time to be reading, learning, observing and being patient. I am not convinced a sensible, diversified portfolio will outperform an outrageously lop-sided one in the next few years.

As Redwing seems to be suggesting, you could do yourself a lot of harm following good advice.

Done

Thanks Sunfish

 

[evand]

Making money in the stock market? Buy shares at any price and sell them at any price higher, Its that simple.

The biggest mistake - by far - i see people making is thinking they know more than the market. What i mean by this is if the market thinks a share is crap, don't buy it thinking you know better. You don't.

If the share price isnt rising or falling, the market thinks either the particular share is crap, the sector it is in is crap, and/or the overall market is crap at that time. Could be either one, two or all 3. But the signal is 'dont buy'.

We arent Warren Buffett.

I have to disclose that i lost a lot of money with this mistake in my early years. Now - with robust risk management in place - i rarely lose money. And often make some.

 

[Andrew_A]

I would say if you can't prove better risk adjusted returns than an index then treat is as a hobby or index all the way (it is a valid asset class after all) and stick with and build on what is actually generating you money.

 

[Aaron_C]

totally agree! that's why I was thinking of getting into exchange traded funds (index funds) with low management fee for diversification and to take the trading part completely out of the picture.

i want to apply the same strategy as property, which is to ramp up my total asset base and let compounding do its magic over the long term...

still trying to find a book/ebook/seminar that'll guide me down that path...

It seems you already have a fixed idea of what you should be doing to make money on shares (ETFs), and are just looking for people to confirm that. You can't get rich on ETFs, everyone knows that. You have to get lucky on picking a good stock that goes up many, many multiples of your buy-in price. How to find them? Search on websites like Hotcopper and do lots of research.

 

[LukeLang]

Although this is a property forum, most property investors also have some exposure to shares. I had dabbled in he stock market for years with limited success, but found the everyday trader educational trading course very helpful in tightening up my trading perspective. A good broad overview of basic trading rules.

 

[investor2009]

I've never invested in the share market but looked into it multiple times throughout the years. My conclusion: No-one ever seems to make much money from shares and the majority of people I know have lost money. To the extent of a business partner being forced to work through his retirement years losing $400,000 from his assett base through the GFC..

I always come back to what I already have and know. Why? because it serves me well.

 

[willair]

Basically a Yardney equivalent for share investing where I'm confident enough to project CG returns and cashflow analysis, for example.

Hope you might be able to help!
-J

Very hard to project CG returns short or long term,and cash flow analysis sometimes don't stand the test of time,but from my short experience stuff ETF's-Index Funds-very high risk and some smart cash up high end investor groups can turn the table very quickly on some time players..
IMHO,stay right away from the ASX,till the euro based problems are fixed there is going to a very sharp downturn very soon in every sector..

This is book that i always go back to read again and again..
http://nickrenton.com/spd.htm

 

[Nth Brisbanite]

I've never invested in the share market but looked into it multiple times throughout the years. My conclusion: No-one ever seems to make much money from shares and the majority of people I know have lost money.

I know plenty of people who have made money from shares. I use the same principles in share investing as I do in property. Buy good quality shares, don't overgear and hold as long as you can. This has worked out well for me.

 

[dajackal]

I don't believe I can outsmart the market so that's why I don't want to trade.

But I think I can make money by being in the market, just need help coming up with a strategy that minimises risk and has tax advantages.

I've been reading blogs like www.getrichslowly.org and www.iwillteachyoutoberich.com and that's where I got the idea of using index funds. But I'm definitely open to other suggestions aswell.

"I believe that 98 or 99 percent — maybe more than 99 percent — of people who invest should extensively diversify and not trade. That leads them to an index fund with very low costs." -Warren Buffet

 

[Sunfish]

You seem to have all the answers. Why did you ask us and not just go with Warren? You are aware though that he would never, ever invest in funds. Berkshire Hathaway Inc. is so diversified it really is a fund so of course he would like you to invest in "funds".

But I'll stick to my original advice and say that even the best advice can send you broke in this market.

Stick to Au/Ag or the miners if you feel you MUST "invest".

 

[datto]

I agree with nthbrisbanite.

the way i see it, buy ten best stocks on ASX, hold for ten years (collecting dividends along the way) and then sell.

I havnt got the patience to do this. If I did have the patience I would have made a lot of money eg bought oil stocks in 04 for $1.30, now over $6.00. Patience is the key. (with any investing)

I have more patience with property because it is far more difficult and time consuming to sell (list with agent, solicitor, exchange contract, wait for settlement).

With shares you can sell in a split second over the net and you got your money in 4 days.

 

[Sunfish]

I agree with nthbrisbanite.

the way i see it, buy ten best stocks on ASX, hold for ten years (collecting dividends along the way) and then sell.

I havnt got the patience to do this. If I did have the patience I would have made a lot of money eg bought oil stocks in 04 for $1.30, now over $6.00. Patience is the key. (with any investing)

I have more patience with property because it is far more difficult and time consuming to sell (list with agent, solicitor, exchange contract, wait for settlement).

With shares you can sell in a split second over the net and you got your money in 4 days.

Are you sure? None have gone broke and they have paid dividends consistently but would you have become wealthy? Not with the banks, Telstra and AMP you wouldn't.

You can no more become wealthy with safe, unleveraged shares than you can with unmortgaged property. Introduce margin and you are no longer "safe".

 

[datto]

say around 2003/2004 you could have picked up shares really cheap eg BHP for around $12, there's triple your money now, quadruple if you sold before the GFC.

With telstra you would have probally covered your capital loss from the dividends it paid. AMP was under $3 a share around that time. All the bank stocks, except for perhaps NAB, are up from 03/04, and any capital losses would have been made up from dividends paid.

Depends how you define "rich". If you sold before the GFC you certainly would have made a lot more $.