What to invest in?

hobo-jo said:
Invest, my stock portfolio is down over $8000 today, if you are looking for somewhere to place your funds I accept donations ;)
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thats the change in market price, but what is the change in intrinsic_value.
From yesterday to today, unless there is some information that relates specifically to a stock, the change in intrinsic value should hardly have moved.
 
Simon said:
The last few years have not been wonderful in the stockmarket. Some funds are doing well now - I got a report from Platinum today - one fund returned over 40% this last quarter - off the top of my head I don't recall which. But a volatile sector like that would show lower returns too.
,
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Hey Simon. I remember that you hold platinum funds. We've discussed this before. I just looked up my portfolio I have with them. I have 4 funds. The 2 longest held ones have way more than doubled. That's since 2003.

The best news is that they are all now well above the Nov 2007 sharemarket highs. I make it about 7% or 8% above the top back then. This is one great funds management company. I don't think I realised they were back above the 2007 peak?

Good on you Kerr and platinum.


See ya's.




This is not advice. Anyone who takes free advice about funds from a farmer on a property forum deserves to lose all their money.
 
Originally Posted by hobo-jo
Invest, my stock portfolio is down over $8000 today, if you are looking for somewhere to place your funds I accept donations
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Intrinsic_Value said:
thats the change in market price, but what is the change in intrinsic_value.
From yesterday to today, unless there is some information that relates specifically to a stock, the change in intrinsic value should hardly have moved.
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BHP's tax obligations will rise from 42% to 57% ie their take home pay will drop from 58c in the dollar to 43 cents or by >25%. I think a profit drop of this magnitude is a material change in intrinsic value. Don't you?

South Aus can wave goodbye to Olympic Dam. That's a massively expensive project and I can't see them doing it just for the Gov's benefit.
 
Sunfish said:
BHP's tax obligations will rise from 42% to 57% ie their take home pay will drop from 58c in the dollar to 43 cents or by >25%. I think a profit drop of this magnitude is a material change in intrinsic value. Don't you?

South Aus can wave goodbye to Olympic Dam. That's a massively expensive project and I can't see them doing it just for the Gov's benefit.
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Yes completely agree with you, if the super tax gets passed into legislation, intrinsic value declines.
Intrinsic value is not set in stone, it also fluctuates, but not day to day with changes in market prices.
 
I'm with BlueCard on paying down debt. Mortgages are, what, 7-8% right now, and there are very few assets that will appreciate at a faster rate than that.

Plus if $8000 is a lot of money to you, then it's something that you probably can't afford to lose.

As for investments, I like index tracker funds. The cheaper the better. :)

It's very hard for an investor to consistently beat the broader stock market in terms of growth over the long term. Very few people do, and that includes professional fund managers who have access to a whole lot more information, research and resources than an individual does.

(And, yes, I am aware that everyone will now post that their shares have gone up far more than the ASX. :D)
 
Intrinsic_Value said:
A good idea for new investors is to document WHY they have bought an investment asset (whether its shares/funds managment/index funds/property/other).
Why was it bought? make money
What is the objective? make money
What is the goal? as above
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On a serious note,

for new investors (and indeed almost every adult on the planet); the chances are that you will have some personal (and non-deductible) debt.

So, unless you suddenly become an overnight guru at shares and can turn $8k into $16k in one day, or hour;

I'd be plowing all the $8k into the personal debt and clear it (or some of it).
 
Educate yourself first.

Invest said:
Hi all,

Just wanted some guidance.

I have one PPOR and planning to buy a first IP within the next 12 months.

I also have around $8000 in an index fund that I kicked off in 2007. So far its been losing money although Ive been told to wait until 10-15 years into it to see how it grows.

Ive been playing with an idea to pull the money out of the index fund and inject into an IP deposit... but I am unsure if this is a good idea or not.

Property has been performing so well, while Australian share market has been under performing...

Advice?
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Hi Invest

It really depends on your long term financial goals, and what investment you have more knowledge on. The managed funds market is good for those who wish to surrender significant control over their investments, or have no interest in managing their own money.

Investing in Shares requires a different set of skills and understanding from property investing. I am currently in a similar position as yourself, with two properties under our belt and not purchasing until 2011.

I started learning about Shares from several months back with an aim of improving my cashflow during my lull periods in-between buying properties. Lets just say unless you are actively prepared to spend months to learn more about the fundamentals of shares, it is better to put your money into your offset / redraw account. At least you are guaranteed tax-free interest.

Regards

Daniel Lee :)
 
leave the money in the index fund, and continue to contribute each week.

this way you average down your holding purchase price.

no point in selling now, as property has run hard over the last 12 months, and would suggest will not do as well during the next 12 months, especially with interest rate running up and up.

when investing in shares, its a 5 years plus holding, so you still have a couple years to go.
 
Blue Card! said:
....or continue to plough money into a losing position....
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even better, sell out of the 'losing position' and invest in a fully priced property along with the rest of the herd.

be careful not to get trampled though when property has a tough run after 12 months of rocket growth. Certainly you don't expect property to continue with double digit growth back to back now don't you?

share market is a long term investment.. and should be viewed as such. not sell out when some numbers change on your screen in a weeks time.
 
Reality Cheque said:
Exactly.

The more you lose the more you put in. The more you make the more you pull out. Do it the other way around and you're setting yourself up for disaster IMO.


RC
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Are you serious? And here I am with the stupid idea that you cut your losses and let your winners run.

But what do I know.
 
[/QUOTE]
Reality Cheque said:
Exactly.

The more you lose the more you put in. The more you make the more you pull out.
Doing it the other way around is a recipe for disaster IMO.


RC
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Yes this makes sense from an investment point of view, PROVIDED:
(a) you dont use excessive leverage. Leverage can force your hand, in other words, you cant let time take care of the natural cycle in things.
(b) the investment can come out of the other side, dollar cost averaging into zero is still zero.
 
Both Sunfish and Reality Cheque are correct so long as they are doing it in accordance with the correct investment principles.

But the receipe for distaster is when you try to blend the two.

Thats why again, advice cannot be given to the original poster without knowing whether the original $8000 allocation to an index fund was made as a trading or investment decision.
 
I'm much less formal than you IV and for me there is only one rule: There are no ABSOLUTE rules. I know I'm not a day trader but nor am I an investor by your definition.

I was watching a recently acquired share tank once and I am not very patient with new stuff so I decided to get out. Using a new trading platform I forgot to change the default "buy" to "sell" and doubled my stake. In dismay I took a deep breath while deciding what to do. Turns out I had bought at the bottom and the price got back up far enough put my position in the black.

Another time I forgot that a share had done a consolidation and bought much more than I intended. Sold out a week later at a handsome profit. :D There is an old saying: Gold is where you find it.
 
Sunfish said:
Are you serious? And here I am with the stupid idea that you cut your losses and let your winners run.

But what do I know.
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You probably know what works for you within your own strategy.

As far as my strategy is concerned, I'm dead serious. In fact it's the very basis of how I make money(and avoid losing money) on the sharemarket.

I should clarify though that I don't pick individual shares but invest in "the market" through geared share funds. I've got better things to do than analyse shares all day so I pay fund managers.

All I have to do is pour money in when everyone is panicing and pulling it out, and start pulling money out when everyone has been madly pouring it in.

The volatile fluctuations of the geared funds allow you to take greater advantage of both the booms and the busts. Provided you stick to your strategy that is.

Buy in gloom and sell in boom I think they call it.

Please, nobody try this strategy. It's success depends on the majority of people secumbing to the herd mentality. I don't want to be promoting level headed share market investing in any way, shape or form.

GFC's dont come around often enough.


RC
 
Intrinsic_Value said:
Yes this makes sense from an investment point of view, PROVIDED:
(a) you dont use excessive leverage. Leverage can force your hand, in other words, you cant let time take care of the natural cycle in things.
(b) the investment can come out of the other side, dollar cost averaging into zero is still zero.
Click to expand...


Correct.

In regards to your points-

a) Thats why I use geared share funds. It's not my hand being forced.
b) I'm yet to experience a geared share fund that hasn't come out the other side. More to the point, I haven't experienced one that didn't perform exceedingly well after coming out the other side.


RC
 
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