Is it worthwhile investing 5K in shares?

[dwv]

I have a measley 5K to play with and I want to try shares again. I say again becuase I have tried it before (same amount) and GFC ate it all up. I just tried my luck but I unfortunately it wasn't there at that time.

Anyway, if this is all the money I can put into shares, is it still worthwhile doing it? I don't want to go into speccies anymore since that's where I got caught. What would you do?

 

[random]

I only trade and I'd still say hell yes . But I know there are some serious hold investors around here that could , if they were inclined , give you a very good & well worthwhile use to put that 5k to.
Holdings not my thing so I won't say Jack but , if you were to pick a good penny stock company , 5k can make you a wealthy man.

Forget the BHP's , your only gonna triple in 20yrs woopy doo but be patient and you never know , you could get some interesting replies.

Cheers.

 

[Aaron Sice]

if you consider trading as gambling and you're "giving it a shot", i'd say steer clear of leveraged positions.

 

[Mr. Fabulous]

I suggest you use some of that 5 grand and get yourself some edumacation first. If you are interested in buy and hold, reading Peter Lynch's books is a good start. If you are into trading, I can't help you there, because I'm not a speculator.

 

[hobo-jo]

Agree with random, find a penny (low market cap) stock or don't bother with $5k is my opinion.

I'd look for something in the resource sector.
A company that has assets specific to 1 or 2 materials (e.g. avoid a company spread over too many materials) that are trending up (e.g. Gold, Copper, Nickel, Tin).
A company that has a reasonable cash position and won't have to dilute in the near future.
A company that already has a JORC/measured resource or is expecting to release one soon is preferable.
A company with quality management (e.g. have kept dilution low/minimized cash burn, have experience in the industry, perhaps have taken other similar companies to success).
A company which is not too infested with short term traders (low liquidity).

Goodluck if you give it a shot.

 

[Ridin-High]

I have a measley 5K to play with and I want to try shares again. I say again becuase I have tried it before (same amount) and GFC ate it all up. I just tried my luck but I unfortunately it wasn't there at that time.

Anyway, if this is all the money I can put into shares, is it still worthwhile doing it? I don't want to go into speccies anymore since that's where I got caught. What would you do?

The biggest return that you will get from that $5,000 (you won't realize it now, but you will in the future). Spend about $50 and buy urself some books educating yourself about investing. Place the other amount ($4950) for the time being in a bank deposit and earn some interest on it or in an offset account attached to your house.

don't listen to tips from online randoms about spec resource company's

 

[jaycee]

don't listen to tips from online randoms about spec resource company's


lol

Didn't you, another online random, just give advice that you suggest they take ?

 

[Mr. Fabulous]

Didn't you, another online random, just give advice that you suggest they take ?

Maybe some other post was deleted, but I didn't see anything in Ridin' High's post about him giving advice regarding spec resource companies? Also, I completely agree about ignoring advice given on forums/the street/in taxi cabs/from your family/from your friends about ANY stock tip.

There is no substitute for some education and research.

 

[Ridin-High]

don't listen to tips from online randoms about spec resource company's


lol

Didn't you, another online random, just give advice that you suggest they take ?

please quote my advice about spec resource companys

 

[Sunfish]

Agree with random, find a penny (low market cap) stock or don't bother with $5k is my opinion.

I'd look for something in the resource sector.
A company that has assets specific to 1 or 2 materials (e.g. avoid a company spread over too many materials) that are trending up (e.g. Gold, Copper, Nickel, Tin).
A company that has a reasonable cash position and won't have to dilute in the near future.
A company that already has a JORC/measured resource or is expecting to release one soon is preferable.
A company with quality management (e.g. have kept dilution low/minimized cash burn, have experience in the industry, perhaps have taken other similar companies to success).
A company which is not too infested with short term traders (low liquidity).

Goodluck if you give it a shot.

Jo isn't putting "impossible" criteria on your selection.

I'm not, personally, rapt in "edumacation" in any formal sense. You will end up with some *******ized version of the Graham/Buffett philosophy which won't work with 5K. 5K does however give you entry to "feel" the market and experience it's highs and lows and the books can't replicate that.

There is an ad on the Austar biz channel for CMC Markets (I think) where they advise getting up to speed on world events, then backing yourself. Now I don't advise using CFDs or CMC Markets but I like the attitude.

Don't be passive, be active and start your journey. The longest journey starts with a single step.

 

[Sheryn]

I have a measley 5K to play with and I want to try shares again. I say again because I have tried it before (same amount) and GFC ate it all up. I just tried my luck but I unfortunately it wasn't there at that time.

Anyway, if this is all the money I can put into shares, is it still worthwhile doing it? I don't want to go into speccies anymore since that's where I got caught. What would you do?

IMHO No

Your are undercapitalised to go into shares (there are some people who could do a great deal with 5K with their experience and/or contacts).

With 5K you cannot diversify enough and cost of buying and selling will eat you up.

Would you start a business with 5K? Is 5K enough to fall back on?

Speccies is speculating! Company can go bust.

Suggestion...
Borrow from local library - share books to read & learn about money management = risk control.
Pretend - buy 20 shares in parcels of 5K = 100K and monitor by recording prices at the end of the day for 3 months.

On the other hand you could invest in 2 companies and see how you go.

My daughter works for a ASX listed company and some years they offer her an interest free loan and the dividend pays off the loan over a long period of time OR she can salary sacrifice 1K to buy so shares, so she does this as it is a slow drip method of buying accumulating a defensive ASX listed company.

No one knows what will happen tomorrow!


Cheers
Sheryn

 

[Edmond Dantes]

Paper trading is ok but its never the same, so I say do it. I had similar spare cash as you, but I bought solid companies in the usa, like apple, microsoft, google, visa, etc, putting 1k on each. Haven't sold any and it's given me experience and exposure, and a few hundreds in unrealised profits. But I won't go broke if I lose my money. No margin for me thx, still lots to learn and study.
Even though unknown companes can give u massive gains, the opposite can haPpen too, and I don't have the skill required yet.

In the meantime, I keep studying

Good luck

 

[random]

don't listen to tips from online randoms about spec resource company's


lol

Didn't you, another online random, just give advice that you suggest they take ?

I'm still not clear on whether I'm random , I need a coffee !

Um , cheers

 

[Ridin-High]

Paper trading is ok but its never the same, so I say do it. I had similar spare cash as you, but I bought solid companies in the usa, like apple, microsoft, google, visa, etc, putting 1k on each. Haven't sold any and it's given me experience and exposure, and a few hundreds in unrealised profits. But I won't go broke if I lose my money. No margin for me thx, still lots to learn and study.
Even though unknown companes can give u massive gains, the opposite can haPpen too, and I don't have the skill required yet.

In the meantime, I keep studying

Good luck

Some good advice their

If you want exposure to a certain sector/market you can think about index funds and listed investment companys

 

[csc2]

NMS, cash positive, quiet achiever in the market...

Go to the Nautilus website for a rundown and make your own decisions.

$5 grand is not a great deal of money BUT its YOUR money so even with $5k, diversify,,,ie: dont throw all your eggs in the one basket.

Keep Tax in the forefront of your mind and trade with your head not your heart....

Ensure you have stop losses in place or dont ever trade.

Share trading is risky even buying into blue chips.

Generally prices go up quickly but retreat twice as fast especially on profit taking or a bad announcement so to trade pennies you must watch the market.

Trading thought: To trade you must be prepared to accept a 100% loss and be able to handle it financially or do not trade..

I have lost a fortune in trading but also made a bigger fortune as well in the nineties trading pennies: CAT, PIL, WSG, SLX, AYO and others that long term punters will know well....

My biggest winners were PIL and AYO, made an absolute killing on those by buying very low, holding for several mths then trading them constantly for over 12 mths..some days making 20 plus trades on these two alone.

You must be able to sleep well with your loses and to trade effectively in penny stocks you definitely need live software in real time and have a quality broker on the side that you can share market knowledge with.

Penny stocks trade on momentum...watch accumulation and volumes, its a dead cert that area especially before major announcements.

The market frowns upon insider trading but in reality the market wouldnt be able to function without some knowledge, tips or guess work, what ever you want to call it.

Now days I dont trade much, mainly blue chip long termers but watch NMS, buy at the right time and price and you may do ok.....

Best of luck, do your own research before buying any ticker.

 

[Edmond Dantes]

Mind you - before I put my hard earned money, I had read heaps of books about share investing, specially Peter Lynch's books, which I highly recommend.

 

[csc2]

IMHO No

Your are undercapitalised to go into shares (there are some people who could do a great deal with 5K with their experience and/or contacts).

With 5K you cannot diversify enough and cost of buying and selling will eat you up.

I disagree totally...........

Give you an example personally...Im not skiting at all, just merely pointing out its reasonably common to make money on a small investment outlay

I purchased UCLOA years ago,there are many others for $0.013 cents each, I bought one million options but a mate also wanted in so he bought 200000 and we both sat on them until they expolded.........I never saw it coming but there were many rumours around about it for months after we purchased..i just bought it cause it looked good for a bounce on the charts....then an announcement came out and all hell broke loose..

From memory I bailed at .18 cents, he rode it past .20 from memory...

There are many pennies around over the years that have made people a fortune....call it luck, call it very lucky but thats what the market can do sometimes..........

The trick is to know when you have made enough money and when to bail and leave some for the buyer to make it look a good deal for him/her....Almost impossible to pick a top on the day for pennies when they run.... so much easier to sell with a tidy profit into a rising market than to try and unload when its sliding.

I say good on the poster who has the $5k, you can definitely make it grow but trade smart...

 

[Amadio]

It depends on your goals, and what kind of risks you want to take, how short/long term you are looking at, and what you know about the stock market etc, and no one on this forum but you knows that.

You have had one of the most valuable experiences of your life already - that of knowing what a crash can do to a portfolio, and only lost $5K. A lot of young guns who thought they knew everything and relied on the ever upward climbing graphs to frenetically invest more and more, lost their entire portfolio.

I wouldn't dream to tell someone I don't know how to invest, but I have a couple of suggestions as starting points to find out some more.

Firstly, look into what stop losses are and how to use them.

Secondly, I agree with advice already given: look into index funds.

Thirdly, another agreement to look into what LIC's are - listed investment companies. They are quite different from speccies and aren't very exciting, but many long term holders have done very well with them.

My son, who has looked at his parents peering into a computer screen for hours on end since he was a little, as we were trading, finds it absolutely unappealing. He is very conservative and decided to invest in only one company, a LIC, last year. He intends to hold onto it for decades, building up his holding with rights issues and taking the franking credits with the dividends.

Good luck with the journey - there are so many roads you can take.

 

[Indifference]

I have a measley 5K to play with and I want to try shares again. I say again becuase I have tried it before (same amount) and GFC ate it all up. I just tried my luck but I unfortunately it wasn't there at that time.

Anyway, if this is all the money I can put into shares, is it still worthwhile doing it? I don't want to go into speccies anymore since that's where I got caught. What would you do?

It is all relative DMV... just because a lot of people here think $5k is very little does not matter. It is a start and you are seemingly trying to make an attempt here. I would definitely do it BUT firstly, I agree with the comments about education.

Read, read, read, ask questions and read some more. Come up with a share investment plan (ie. trading, buy/hold, dollar averaging etc...) and go for it. That $5k, well invested, with any dividends reinvested and a regular monthly contribution will grow and grow. One day you will laugh at the people who scoffed at the thought of investing a mere $5k.

Stay motivated! Remember, $100k is only 20 chunks of a 'measly $5k'... so it is not so measly

 

[Intrinsic_Value]

I have a measley 5K to play with and I want to try shares again. I say again becuase I have tried it before (same amount) and GFC ate it all up. I just tried my luck but I unfortunately it wasn't there at that time.

Anyway, if this is all the money I can put into shares, is it still worthwhile doing it? I don't want to go into speccies anymore since that's where I got caught. What would you do?

Me i would put that $5k in the bank and concentrate on your day job and get more savings.

I would however have an 'imaginary' $5k, and i would determine what type of person i would be a speculator or an investor. I would then learn about the type of person i wish to be, read books from people who have done well from a particular school of thought. I would then use my imaginary $5k to invest/speculate according to what i have learnt. I would document the reasons i invested/speculated and i would then track the performance and see if my documented logic was correct over time.

Depending on the correcctness of my 'imaginary work' and the level of savings i had achieved greater than $5k i might consider doing what i imagine.


There will be plenty of people that just say use the $5k, but $5k is $5k of savings.

Plan B: as above, but use $2 a week to buy a scratchie or a tatts ticket, maybe more exciting and you still have your capital intact.

The additional benefit of Plan B, you might actually hit the jackpot. You can then lord it over the rest of the speculative eliment in Somersoft comparing your returns to them.