ASX Investment help

[brocky05]

HI Everyone

I realise this probably isnt the best forum for a question like this as its not property related however im sure plenty of people would be able to help me out with my questions.

I'm thinking of starting a share portfolio as a long term investment. I currently own one IP and will be building my PPOR soon.

I currently own 550 Telstra shares I bought when I was around 20yrs old didnt have much money then and its all I could afford. Im now thinking of investing either $10000 or $20000 on shares. Most probably will dive in with $10000 and see how I go. Im looking for long term growth with a fairly ok dividend I guess just wondering would I be better of picking one company and spending the whole $10000 or spreading it across maybe 3 companies?

I was thinking of starting up a commonwealth bank mywealth account you can apparently trade shares for $20? I have also heard of people that trade daily to make money on the ASX. Im guessing if you did this your tax return would be very very messy as apparently you have to pay 50% Capital gains tax if you dont keep the shares for a full year? Does anyone know someone that does trade daily on the sharemarket apart from a stockbroker? I would be interested to see how it all works out for them.

Also would I be better using $10,000 I have already sitting in a bank account or taking out a personal loan to buy shares as I have heard you can claim the interest back at tax time as its an investment? Just wondering what tax implications I might create by buying shares? I have $10,000K sitting around but would I be better leaving it against my ppor and just taking out a personal loan?

 

[superAndrew]

If you have all these questions then I would not recommend doing short-term/daily trading. I't won't end up well.

Try a demo account with fake money and see how you go. If you can consistently make returns and your overall gain is higher than your overall loss for at least 3 months then go for it with real money. This is in regards to doing daily trading.

Cheers
Andrew

 

[brocky05]

I dont think I would really be up for daily trading its a more long term goal for me. Just interested in seeing if daily trading actually works for people...when the capital gains tax is 50% I dont think it would really be worth all the trouble.

 

[datto]

CGT is calculated on your marginal tax rate. If you hold the shares for more than 12 months you get a 50% discount on the capital gain.

I've been share trading for years and have been making mostly small profits. The last year has been my best yet, and only on TLS. Ive done some day trading but its difficult with a day job. Some days you go great..$300 in an hour and them you get "stuck". Do sell at a loss or hold till the sp recovers? Tough decisions need to be made esp when you invest a years wages.

 

[brocky05]

CGT is calculated on your marginal tax rate. If you hold the shares for more than 12 months you get a 50% discount on the capital gain.

I've been share trading for years and have been making mostly small profits. The last year has been my best yet, and only on TLS. Ive done some day trading but its difficult with a day job. Some days you go great..$300 in an hour and them you get "stuck". Do sell at a loss or hold till the sp recovers? Tough decisions need to be made esp when you invest a years wages.

Nice work yes I could see it would get in the way of my day job just not enough free time.... Does anybody know a site where you can virtually invest with fake funds so I can get a feel for it.

 

[rowena]

Search around for brokers there are cheaper then cba. I'm with bell direct only because racq had a offer with them at the time. $15 a trade I believe. Atm min $500 trade. Easy to set up an account.

 

[redwing]

HI Everyone

I realise this probably isnt the best forum for a question like this as its not property related however im sure plenty of people would be able to help me out with my questions.

I'm thinking of starting a share portfolio as a long term investment. I currently own one IP and will be building my PPOR soon.

I currently own 550 Telstra shares I bought when I was around 20yrs old didnt have much money then and its all I could afford. Im now thinking of investing either $10000 or $20000 on shares. Most probably will dive in with $10000 and see how I go. Im looking for long term growth with a fairly ok dividend I guess just wondering would I be better of picking one company and spending the whole $10000 or spreading it across maybe 3 companies?

I was thinking of starting up a commonwealth bank mywealth account you can apparently trade shares for $20? I have also heard of people that trade daily to make money on the ASX. Im guessing if you did this your tax return would be very very messy as apparently you have to pay 50% Capital gains tax if you dont keep the shares for a full year? Does anyone know someone that does trade daily on the sharemarket apart from a stockbroker? I would be interested to see how it all works out for them.

Also would I be better using $10,000 I have already sitting in a bank account or taking out a personal loan to buy shares as I have heard you can claim the interest back at tax time as its an investment? Just wondering what tax implications I might create by buying shares? I have $10,000K sitting around but would I be better leaving it against my ppor and just taking out a personal loan?

Wow Brocky

You went from investing for the long term, to day trading, to adding leverage to that, all in one post

 

[seismic]

Im now thinking of investing either $10000 or $20000 on shares. Most probably will dive in with $10000 and see how I go. Im looking for long term growth with a fairly ok dividend I guess just wondering would I be better of picking one company and spending the whole $10000 or spreading it across maybe 3 companies?

Diversification is always safer. Minimum investment is $500, so you can buy 1 or 3 or 20 shares for your portfolio. Obviously the more number of shares you own, it needs better management, while the risk is reduced.

You can pick from top 10 which will be safer compared to mining stocks or small cap stocks.

You can try ETF or LIC's (AFI, ARG, MLT). With ETF's you can even invest in overseas markets.

Time frame: Generally it is more difficult to make money consistently by going short term trading.

Also would I be better using $10,000 I have already sitting in a bank account or taking out a personal loan to buy shares as I have heard you can claim the interest back at tax time as its an investment?

You can claim interest paid + other costs involved.
However losses will be magnified if you are borrowing.

Essentially it is like property investment. However you are buying a small portion of a large business.

 

[datto]

Do a bit of research. Check out a fella named Buffett. Apparently he made a small fortune from shares lol.

 

[willair]

Essentially it is like property investment. However you are buying a small portion of a large business.

There is a difference,property once listed for sale can just sit there for months depending on the real estate selling experience ect,where as one makes the phone call at 9 in the morning and by the afternoon and once everyone from the ATO down is paided the money is back in the trading account within 48 hours one market is liquid,the other depends on the previous weeks newspapers..

 

[hugh72]

Get on a brokers emaill list and study the market for a while. Work out your tolerance to risk and seeing rises and falls in your target stocks first. Then jump in with small amounts with some diversity across sectors and stocks. No such thing as a safe stock as others have recommended AFI or ARG might provide some initial Diversification.

 

[Jess Peletier]

With just 10k to invest day trading is very expensive - if you're paying $40 to buy and sell, it's costing you 0.4% just to play.

Just say on average a stock moves 2% in a day, and you catch half the move (this is realistic, you'll never catch the whole thing) the most you'll make is 0.6%.

However, if you lose, and cap your loss @ 0.3% you'll lose 0.7%. (Most people have a lot of trouble capping their losses so this is being optimistic). You'll need to win significantly more than you lose, and most trading systems are lucky to have a 50/50 win rate. Most of trend following systems win about 30/40%.

Food for thought

Also, unless you particularly love sitting in front of your computer all day and don't particularly like people, do something else. Speaking from experience it will suck your soul dry.

 

[seismic]

Beware

I dont think I would really be up for daily trading its a more long term goal for me. Just interested in seeing if daily trading actually works for people...when the capital gains tax is 50% I dont think it would really be worth all the trouble.

I agree with you.

I never made any money from day trading - in fact I lost some.

http://en.wikipedia.org/wiki/Dan_Zanger

This guy from US made a lot of money during tech boom but apparently lost eveything after tech boom.
Now he is running a website and making money from that.

 

[redwing]

Dan Zanger holds the world record for one-year stock market portfolio appreciation, gaining over 29,000%. In around two years, he turned $11,000 into $42 million

..........wow

 

[china]

Having been playing with stocks for about two decades, my experience is that it has been fun and enjoyable rather than really profitable. There have been many wins and many losses and I would say that overall it is a break even situation for me in terms of overall capital value for me. Losses sustained after GFC have been made up afterwards. Currently my main short term portfolio is down about 6% on paper but I am hoping it to come good. Dividends on the side are good but not life changing.

I have tried short (day / days), medium (weeks/months) and long term trades (years). All have had success and failures. So I don't think any particular time frame is particularly good. I am in the process of converting portfolio to ETF such as VAS and see how that goes.

 

[seismic]

Dan Zanger world record trader full interview
https://www.youtube.com/watch?v=twJv_Ovx5ec

 

[redwing]

Risk

Life without it is longer...but boring

 

[mgs4]

A related query to the OP's question on borrowing to buy shares, has anyone found a margin lender who has an offset account in the way you can get an offset account for variable rate home loans?