How to develop an investing strategy for equities?

luce.rocks

luce.rocks

Hi folks.

Can anyone point me in the direction of a good resource for developing an investment strategy for shares, bonds, etc?

I think this year I'd like to invest in something other than property.

My main goals are:

Try to get get a better return than a term deposit
Give myself something to do when Harriet goes to daycare

Ideally I'd like to invest in some things that I don't have to check every day, and other things that I can monitor, buy, sell, from day to day.

Thanks, Luce
 
luce.rocks said:
Hi folks.

Can anyone point me in the direction of a good resource for developing an investment strategy for shares, bonds, etc?

I think this year I'd like to invest in something other than property.

My main goals are:

Try to get get a better return than a term deposit
Give myself something to do when Harriet goes to daycare

Ideally I'd like to invest in some things that I don't have to check every day, and other things that I can monitor, buy, sell, from day to day.

Thanks, Luce
Click to expand...

If it were me starting out I would do this :)

In my opinion most funds struggle to beat the index using professional traders, it is even harder to achieve that yourself, so put most of your cash into an index following fund, if you read the other SS shares thread there are funds mentioned in there.

You could then keep some trading money, maybe 10% at first, for speccies, cheap stuff that may hit gold, oil or a medical breakthrough etc These are the stocks that are very heavily manipulated and ramped on forums all over the world so you need to be Really, really, careful.

You do need to study up, it is hard work as you are taking on the experts that are dealing all around the world. Your main advantage is that a private investor is nimble and can get in and out quickly but if something goes wrong be prepared to lose the lot on speccies.

A flooded mine, a dry well, a failed test study, one piece of bad news can kill a speccy stone dead or good news can make it triple in 2 seconds.

Sometimes red or black sound better risks :)

One of the more sensible stock forums is this one http://www.aussiestockforums.com/forums/?

Above all, do your own research on the risks involved and be prepared for the heart flutters as you price your investment every day, it is a very different feeling to RE investments.
 
I'm still very newb but learning a lot about share markets through reading.

So far I've really enjoyed authors such as Peter Lynch, John Bogle and and edited book of Warren Buffett essays (excerpts from his yearly letters to shareholders, can't remember the exact author of the book). These guys are big fans of the long-term term approach, particularly Bogle since he is the founder of Vanguard!

Can't help much around trading as it's not for me and I haven't done much research into it. I've read suggestions around allocating a very small proportion of your capital (say 5-10%) to "try" trading: some suggest that this is speculating rather than investing :)
 
I can't help much with bonds but as far as equities go, there's heaps of ways to make/lose money.

Similar to property, its probably best to start with what you want to get out of it. What suits you?

- time frame
- yield vs CG
- active/passive
- risk tolerance


There's heaps of ways to make money and there's even more ways to lose money.

There's generally 2 camps. 'Investors' and 'Traders'. I've never seen a clear definition and I think they're are the same, but the time frame is different.

Those 2 camps can probably be split again into 'fundamental' and 'technical' or perhaps a combination of both.

Think about what you think would suit you and go from there. Personally, I don't understand fundamentals but that doesn't mean it's not a valid way to go.
 
I have just signed up with private Banker.

have known him for few years..followed his advise and have done reasonably well.

I guess that works for me! others may want to do DIY investing but i prefer to have trusted professional do the work.(at least until i know ins and out of such investment class)
 
luce.rocks said:
Hi folks.

Can anyone point me in the direction of a good resource for developing an investment strategy for shares, bonds, etc?
Click to expand...

There have been a few threads in similar vein recently. Have a look at MTR's High Yielding Shares thread.
A lot of different discussion on different ways and products.

Blacky
 
Thanks guys. I started on a few of the other threads and realised when I had to google simple things like 'drip feed' that maybe I needed to start with an even more basic resource. The other day I had to ask my husband what the 'equity market' was - that's how basic we're talking.

I'll go back through the threads and google my way through them.
 
xanh said:
- time frame A year, then review
- yield vs CG both, so long as it adds up to 5% or more
- active/passive Mostly passive, but possibly a small % active to give me a hobby
- risk tolerance Low-ish
Click to expand...

With that in mind, what sort of products do you think I should start learning about first? That is, what sort of products are usually medium to low risk and medium to low yield? :)
 
If I were new to equities/shares I wish Roger Montgomery's book Value.able was about. Very sensible approach. Can throw all other reading out the window as far as I'm concerned.
 
Luce, suggest pick up below as a starting point for self education, it will be worth the money;

A random walk down Wall Street
Beat the street
Motivated money (Peter thornhill)
Common sense on mutual funds
Buffet, the making of an American capitalist.

These books will give you different view points on the market and from this you will find your way of investing. The main thing is to have conviction in whatever you do, so you stay the course when things get tough.
 
Luce.Rocks

Firstly - From reading other threads I believe that you are a non-resident? Have you sought specific taxation advice in regards the best way to invest in shares? If not I recommend you do, as it can make a big difference to your net returns.

Secondly - Im not far behind you in my knowledge. I have dabbled in shares previously, and understand some of the risks - but don't really have much practical experience, or knowledge in managing these risks.

I started off lightly with some low cost funds. The one which I chose is a "total market" fund which basically tracks the total market. I don't have the time, knowledge, or inclination to attempt to beat the market as a whole - and I have a long term outlook on it.

I purchased un-hedged US$ fund, as it suits me and my tax situation - which sounds similar to yours (non-resident Australian).

Blacky
 
Luce, do all the study on equities that you can ie books, seminars, gurus etc etc. When you think that you understand everything do the following, paste a newspaper clipping of the ASX top 200 companies on a wall. Grab a dart and from 10 paces throw it at the listing on the wall. Whatever company the dart hits you invest in lol.....
 
Lol, datto.

Yup Blacky, I'm pretty sure I'm a non resident. I'll have to start researching tax law for non residents too. But I don't really want to invest locally (Spain) with my AUD because we'll use local money for that. Hubby is Spanish and has assets here, so we think it's better to keep Oz money in Oz and vice versa.

Property is hard to manage from so far away, I'd prefer to hold something that I can manage online. Hence the interest in equities. We'll be living in Spain for 5-10 years, so I have time to get my head around all this stuff. I'll have a good amount to invest (well, a good amount for me anyway) and I'd like to make $1000-$2000 per month to supplement our lifestyle, reinvest, etc.

Mostly I like the idea of having something that's easy to sell, or has a short term maturity date, if I need a bit of cash for something else.
 
Well, firstly I would establish if you are or are not resident (its important to get this right).

If you are not resident, you may be better off with international purchases (ie the USA or EU) - instead of Australia.
You may be taxed at 15% rather than, 30+%. Remembering that non-residents miss out on the CGT discount, don't get any tax free threashold, and generally get placed over a barrel at every turn.

Speak to a good international accountant before putting money anywhere.

Blacky
 
Hi Lucy,

My 2c.

Shares would be the easiest to manage over the net (you can set up easily on Belldirect, E-trade, Commsec ETC ETC - so many online platforms! But I use Belldirect bc trades are only $15). Please check re: tax stuff though as you're a non-res.

Start off with 'education' page http://www.asx.com.au/index.htm. There'll be enough stuff to start off with, esp if you're completely new to this. Know the basics, know the terms.

Then the books people have suggested.

If you do start go with shares first (probably not a good idea to start with options and warrants and all those without having basics in shares). You can consider starting with big names, companies you already know (banks, resources etc.)

Else you could consider ETF (SPDR, Vanguard etc) or mfunds.
http://spdrs.com.au/
http://www.asx.com.au/mfund/

Just a few things for you to do and read over while you're preparing that coffee for the Spaniards. ;)
 
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