Learning About Shares

[<KS>]

Not sure if I have posted this in the right spot but here goes.

My story:

I up until recently got gutted by my ex and now own 1 property instead of 3.

On the upside with the cash portion of the split I have invested wisely and will soon be making some seriously good returns.

Now I consider myself of medium competency in most investing area...except shares. Now I cant help but feel I am missing out on enabling the true diversification of my future, re-energised, portfolio.

My question is this: Where can I learn about shares without getting conned and without spending several thousands of dollars on gimmiky computer software packages and guru seminars that promise to make you a shares wizz in 3 hours?

I live in Perth, WA - willing to travel anywhere within 1 days drive, or surf whatever web pages are suggested

<KS>

 

[willair]

https://www.sanford.com.au/sanford/Public/Home/Start.asp
http://www.asx.com.au/index.htm
Both these sites can help you,just read as much as you can before you
spend one cent, BTW you were very lucky to end up with one house
most i know end up with nothing..willair..

 

[Ol School Skata]

I did a lot of my learning initially on the asx website. they have a heap of info, free online courses you can do. Not exactly in basic/entry level language but i think you will pick it up.

OSS

 

[Andrew_A]

Start by not spending any money!

You can do some digging for good reading lists then order online from the library, also there are free traders/share meetings groups you can attend.

You will still be exposed to toxic information this way but you won't find yourself wondering later why you spent thousands of dollars on that weekend course.

 

[alexlee]

I would have thought the FIRST thing is to realise that it's harder than you think. Start with the basic books about buy and hold. There is NO system that will train you to become a successful trader in 300 hours, much less 3. Professionals stuff it up all the time.

Like property, I suggest a long term view.
Alex

 

[keithj]

Hi <KS>,

A few random points -

• most people don't need to know much about shares, just buy the index fund (STW) or even better a quality LIC (with v. low fees) eg AFI or ARG or MLT. Use the excellent ASX site to look up those stock codes.
• 95% of people who talk/write loudly about stocks have a vested interest - eg sell newspapers or software or shares or funds or IPOs or tip sheets or rampers or ....
• many of the remaining 5% are either perma-bulls or perma-bears - you'll even spot a few of each here at SS - you'll recognise them by the sources they quote & the tone of their posts . It's fine to read them provided you're aware of their biases.
• unbiased sources of info are hard to find - I look at the big picture & read dumbed down economic reports eg Westpac, AMP, ANZ.
• Useful (free) research resources include commsec, sanford, (free trial)huntleys and others.
• Picking individual shares is hard - 'experts' get it wrong 50% of the time. Why do you think you'll be better at it than them ?
• Read a few (free) tip sheets - you'll soon see that 'experts' have completely opposing views of a company. Who do you believe ?
• Even when 'experts' agree they are often at odds with the market. As an example many brokers agree that Brambles(BXB) is rated as a buy, but it's share price has plummeted 30% in 3 months.
• In the short/medium term, individual shares could go up or down, in the long term the ASX as a whole goes up. Draw your own conclusions.

Good luck, Keith

 

[meat_tray]

I agree with Alex that it’s important to treat share investing as a long term investment. But I disagree that it’s ‘harder than you think’. I think it’s much easier than most people think. Only a very small fraction of the institutions/investment professionals can actually outperform the basic market. To me, this means that the best strategy is just to buy a diversified selection of solid companies and hold for the long term, without too much regard for ratios, forecasts etc. Just buy and hold. I would definitely avoid 'share trading'.

Of the easily available info (newspapers, TV, investment magazines), I divide the information into 2 types. There’s the factual info that is very useful and reliable. However, the judgement info that people put out into the media (eg BHP is a BUY below $36, or sub-prime mortgage problems will have no effect on Aus market) is rarely of much value. Nobody really knows the answer to these issues, certainly not journalists struggling to fill to a 500-word article each week.

I’ve taken free trial subscriptions to “The Intelligent Investor” and Huntley’s Newsletter, and they’ve been very interesting. In fact, I’ve just taken out a heavily-discounted subscription to the Huntley newsletter – not so much because I plan to follow his buy/sell recommendations, but more as a learning exercise.

I’ve only read a small number of investment books, but I think “A Random Walk Down Wall Street” and “The Four Pillars of Investing: Lessons for Building a Winning Portfolio” are well-balanced and trustworthy.

I think the best way to start is to open a commsec account, and buy small amounts of 2-3 top 50 shares, and then use these shares as a platform to start learning about how the market works.

 

[Lucyinthesky]

Hi KS,

I thought that share investing was hopelessly complicated until I decided to do something about it. I am with Commsec and it was completely easy to set up. Just download an application form, complete, sign and send. You will then be sent registration details. As soon as you can login, you can start to buy. I started by purchasing share magazine, financial review, looking at forums such as Aussie Stock and Hotcopper (although hotcopper is more hot air and ramping than informative info). I have found it to be extremely profitable and easy to do. If you look up the ASX they have training courses as well. I think the one in Perth is about $700 for 2 days (can't be sure). Good place to start. Good luck.

Lucy

 

[Property WA]

Two sites I really found to be useful when I was doing the same -

intelligentinvestor.com.au : used their free trial subscription (registered my name and ma's so got quite a few freebies). Not sure if I'd pay for it only as I'm a scrouge when it comes to the possibility of getting stuff free.

eureka report: published by Alan Kohler. Goes into alot of general investing but that, combined with the direct share info is great. Trial subscription.

 

[Andrew_A]

Like property I think the best recipe for most people most of the time is the Jan Somers approach.

Buy when you can afford, use tax advantages and increased CG to improve your situation and keep on buying.. Substitute a fund that you can pretty much guarantee won't vanish (and free of human stuff ups) such as a little block of land and residential house won't vanish and you have a pretty good formula.

 

[<KS>]

WOW

Thanks peeps

Nice array of suggestions and tips there - thank you very much.

I think I am now heading towards my initial strategy:

Dont spend anything and read like mad - same as I did for property over about a 3 year period before I started buying beyond my PPOR.

I have created a list of these suggested sources of information and shall begin the slog through it all.

Once again, thank you very much.

<KS>

 

[kingchevy]

WOW

Thanks peeps

Nice array of suggestions and tips there - thank you very much.

I think I am now heading towards my initial strategy:

Dont spend anything and read like mad - same as I did for property over about a 3 year period before I started buying beyond my PPOR.

I have created a list of these suggested sources of information and shall begin the slog through it all.

Once again, thank you very much.

<KS>

Don't forget sometimes getting involved is the best way to learn maybe hit some blue-chip safe bet shares then see how they perform?

 

[redwing]

I too sometimes think jumping into the market (testing the waters) can be a good strategy..from memory my first shares were BHP, GIO (when they listed) Fosters and..

Here a great thread from AussieStockForums

Aussie Stock Forums

These are suggestions on how a person can learn how to trade.

1. Read information from the ASX (www.asx.com.au) – heaps of excellent information plus company information, data etc etc. Attend any free seminars that are available.

2. Join forums like this one and read, read, read.

3. Use the SEARCH function on the forum. The question you have has probably been covered already.

4. Get a few books on trading (Bedford, Tate, Guppy et al) (again search the forums for other peoples opinions on the best books). Buy them or check out your local library.

5. Take notes to help clarify information you have gathered.

6. Search the net for abundant information (you nearly don’t have to buy any books). Nearly every site will give you a new snippet of information, which adds to your education (even the commercial ones).

7. Sign up for free reports, stock tips, articles, news – DON’T buy or sign up for anything yet.

8. Join a local trading group/club if available. Talk to people and discuss what you have learnt and what they know (of course you still need to assess the information).

9. Start developing your own system – how to be profitable (expectancy), how to select the trade, how to determine the amount to be invested, how much to risk, how to enter the trade, how to manage the trade, how to manage the risk, how to exit the trade and how to spend your profits (think positive!)

10. Look at derivatives (options, warrants, indexes etc) to broaden your education.

11. Do this for at least 6 to 12 months (don’t be impatient to start trading – all the good opportunities will still be there).

12. Paper trade if you think you will benefit from it. Opinion is split as to the benefits of paper trading but I think it is up to each individual to decide.

An alternative to paper trading:

This requires an amount of at least $1000 - $2000.

THE NAME OF THE GAME IS TO STAY IN THE GAME (PROTECT YOUR CAPITAL!!!).

a) Invest in “Blue-chip” stocks less than $10 using the skills you have learnt in the last 12 months.

b) Invest $100.00 or so at a time (10 x $10, 12 x $8, 16 x $6, 20 x $5, 25 x $4
50 x $2).

c) Brokerage will kill you - $20 in and $20 out (total cost of buying and selling a share $40) but you will get in up to 20 trades.

d) This is the cost of your education and is cheaper than buying a system black box or attending a $4000 course.

e) You will feel the pain of losing real money but you will have gained some great knowledge about real trading.

f) Analyse where you went wrong or why you succeeded.

g) Ask for help if you don’t understand where you went wrong.


Good trading!

 

[Kenster]

Here a great thread from AussieStockForums

Redwing, That's a great list.

KS,

One more: Find a mentor.

Whatever you do, wherever you go on your trading/investment journey, do it with the intent to find a mentor. And look for the best.

A good mentor will save you a few years of learning (and not losing money). But a great mentor will shorten many, many years of learning, and enable you making heaps of money along the way.

Interestingly, the more successful a mentor is, the less likely he'll accept a green field pupil (because he's too busy doing what he's best). Only the most persistent ones, with the right attitude and the right conditions have the chance.

Some principles I set up for myself:

- Have a win-win attitude

No one will do something free for another for an indefinite time. Find some way to pay back

- Take responsibility for own actions

The mentor provides guidance, but the bucks stop with the pupil: If he wins, he gets it. If he loses, learn from it and move on. Take full responsibility.

- Take it easy and enjoy the journey

As all humans, mentor does make mistakes sometimes. But what makes him standing out from the rest of the crowd is, he makes less mistakes than the rest, and those mistakes are likely not fatal. Most importantly, he's likely making a better, consistent return than the rest. Learn to laugh when things in pear shape.

 

[Sailesh Channan]

Try these guys www.wealthwithin.com.au they have a successful track record with many satisfied clients.

 

[anrke]

Try the sharemarket game they have once a year through the ASX