Investing for beginners!

hahaboy on 03/12/2013 - 15:10
Last edited 05/12/2013 - 20:17

Hi All,

I'm looking to invest as a 22 year old, who is working full-time. Currently considering diving into investing and would like your advice for beginners.

1) What is the best way to invest? Brokers? using managed funds? financial advisers?

2) What is the best and cheapest service to invest with? (eg- commsec, NAB, e*trade etc).

3) Advise on how to diversify a portfolio?

4) Why don't more people invest in Debentures and notes? They seem like a relatively safe investment as compared to volatile shares? I can't seem to find them - where do I buy them (online)?!?

5) Other basic advice?

Thanks :)

Edit: Thanks for all the replies! Some great responses. Still would like clarity on a good stock broking site with cheap rates and a variety of investments you can dea with?

Financial

Comments

    • mskeggs on 03/12/2013 - 21:10
      +15

      Nonsense. Only a financial adviser can offer advice on the poster's personal circumstances, but there is no restriction on giving general information for educational purposes, like the answer to these general questions.

      • one man clan on 04/12/2013 - 08:59
        +2

        In fact, it's probably the opposite - if a financial adviser gave advice here, and he relied on it, they could be liable.

        • [Deactivated] on 04/12/2013 - 12:39
          +1

          In addition to that, there are advisors who are approached by large companies to push their financial products, for which they are offered an incentive. This can also be in conflict of interest. Many stories of such sort can be easily found. They have a network, and they want everyone to be in one.

        • Shwayne on 04/12/2013 - 19:51
          +1

          Which is why you should just visit a few financial advisors for the first free meeting to see what kind of bullshit they might come up with.

        • rustynail on 06/12/2013 - 09:37

          I agree. Most financial advisors are going to flog products/services that they've been "incentivized" to promote, and for which they receive a retainer/referral fee/commission - whatever you choose to call it.

          Personally, I would go see a financial advisor, just to see what kind of options they are promoting. However, nothing beats personal reserach into investing.

          I'm older than you but in the same position. It takes a few months of reading to figure out what mode of investments are suitable for one's personal circumstances. For e.g. managed funds are the lazy way to ivnest. You generally take out a loan to acquire a stake in the managed fund portfolio and make monthly contributions to pay off the loan. The managed fund then pays you a return on any profits it makes each year.

          In the grand scheme of things, investing is always a good idea but it takes a bit of effort and time to find one that is suitable for each persons circumstances and expectations in life.

          Cheers,
          rusty

        • jacharya on 06/12/2013 - 10:18
          +1

          Kaushik,
          This is no longer the case. After FOFA changes last year, trail commissions have been taken off the table (existing arrangements still valid though).

    • Diji1 on 05/12/2013 - 21:46
      -3

      Jesus H. Christ you can find some crap on the interbuttz …

  • BlazinPast on 03/12/2013 - 15:35

    A lot of people invest do invest in notes/bonds. It's very safe, but you make extremely small percentage returns. It's really not worth investing unless you have a lot of money which is why Governments (China) tend to invest more in bonds.

    There are Australian investing forums (http://www.aussiestockforums.com/). They even have competitions of the best performing stock of the month so you can get some ideas of what some good stocks are.

  • ilostnemo on 03/12/2013 - 16:31
    +1

    My advice is to paper trade for 6 months. ie Don't use your money and see how you go.
    You can lose a lot of money in the stockmarket.

    • Shwayne on 04/12/2013 - 19:52
      +1

      Your performance in 6 months has very little to do with how you've invested your money, and a lot to do with how the market moves.

      It would be a different story if he were day trading of course.

    • Yarkin on 06/12/2013 - 15:42

      Did you lose Nemo on the stock market?

  • nowlan on 03/12/2013 - 18:06

    Suggest managed funds. They spread the risk among more companies.
    You can also choose which particular industry (finance, mining, etc)
    https://www.moneysmart.gov.au/investing/managed-funds

    • alwayslooking on 04/12/2013 - 15:53
      +2

      I tired managed funds when I was your age. Waste of time. You just pay the "managers" a fee and they send you a piece of paper at the end of the year.

      Do one thing mate, open up an account on the ASX website, play the game for a month. Do the same on the Bloomberg website and play around with the US markets.

      Do some more reading after that on currencies, options, hedging etc. You may take to one of these, or you may not.

      Either way you go, start small, make some, loose some. ALWAYS LOOK AT THE BIGGER PICTURE, ALWAYS LOOK AT THE TREND. RESEARCH RESEARCH AND MORE RESEARCH.

      Oh, and do what cloudy suggests, Warren B is a good place to start.

    • hahaboy on 05/12/2013 - 20:04

      Read this already. Thanks :)

  • cloudy on 03/12/2013 - 18:57
    +3

    I suggest you google Warren buffet, watch all the YouTube videos you can find of him and his partner. After that, you will have a better education than most IB out there.

  • jesho on 03/12/2013 - 19:24

    1) Online Broker.
    2) Belldirect are good.
    3) Difficult to optimise if you don't have a large sum to invest, otherwise index funds.
    4) Shares offer higher returns over the long run.
    5) Starting is always the hardest part. Trade according to your objectives (risk preference etc). Paper trade.

  • subywagon on 03/12/2013 - 21:10
    -1

    I'd invest in real estate while the interest rates are so low…

    • plmko on 03/12/2013 - 21:50
      +2

      For a 22 year old with at most 20-50k in savings?

      • subywagon on 04/12/2013 - 14:47

        I wish I could have had the insight to purchase my first house at that age…

    • cloudy on 03/12/2013 - 22:24
      +1

      I wonder how many properties you have? I personally, such a broad sweeping statement like low rates = properties is pretty poor advice. Low rates aid every single asset class. Stocks, bonds you name it.

      • subywagon on 04/12/2013 - 14:45
        +1

        I guess with financial advice it really has to be completely tailored per person. I have had two properties in the past couple of years. I own one currently and am getting ready to purchase another. I used a 10k deposit plus 1st home owner boost to get my first one, spent 20k on reno made 70k profit on sale after costs, took 1 year to complete reno. Second one did reno, property bubble burst but still managed to raise the value by 50k, took 1 year to complete reno (was living in both properties at the time). I'm keeping this one as a rental and property values are slowly climbing in that area again.

        Best initial 30k I could have invested….

        Can you make similar returns with shares/manageded funds, bonds etc with a a similar investment in those kind of time frames? I have no idea about shares etc personally…

        • Baghern on 04/12/2013 - 15:59
          +2

          its called risk and reward.

        • Scrooge McDuck on 05/12/2013 - 16:11
          +2

          Similar returns? How much labour did you put into renovating over those years?

        • uradox on 05/12/2013 - 17:49
          -2

          The property bubble did not burst in Australia, are you referring to property investments overseas?

    • Devils Advocate on 03/12/2013 - 23:05
      +3

      Real estate is ONLY a good investment in very specific circumstances. Shares/managed funds are a better option 99/100 times for the following reasons:
      - Can invest any amount from $500+ basically
      - Can make ongoing contributions to the investment
      - No maintenance
      - Shares/managed funds are liquid
      - Tax benefits of franking credits (negatively geared property has a similar benefit)
      - On average higher returns in the long run

      OP I recommend you talk to a financial adviser for financial advice. Internet forums are not where to get advice on investing

      • MementoMori on 04/12/2013 - 17:11
        +1

        I would argue more people achieve real financial freedom through property investing than shares. The common sense approach would be to have a diversified portfolio containing both.

        20-50k will easily get you a deposit on a new build investment property AND a small basket of shares.

      • mskeggs on 10/12/2013 - 13:10
        -2

        Nonsense.
        Real estate has some issues, but rarely suffers the kind of short term catastrophic losses the share market suffers from time to time.
        Plus you can gear it right up to 95% if you wish.
        On average, returns are pretty much on par.
        Remember, if you bought ASX shares in 2007 you are still down.
        I personally believe there is room for both, and if you have an investment in property there is no reason not to put future investments in shares, but saying any investment class is superior to any other 99/100 times is silly.
        Couldn't agree more with your last line, though I would suggest educating oneself a bit first so you aren't led down the garden path.
        Lots of financially naive people I know basically get tipped into leveraged, negatively geared property and a raft of managed funds when they go see an advisor, because that high risk profile is the only path to the returns they want for their lifestyle (early retirement etc.).
        What they really need is an advisor to tell them their aspirations are too high and the need to be more realistic.

    • Shwayne on 04/12/2013 - 19:52
      +3

      The interest rates are low but property is through the roof.

      • Davros on 05/12/2013 - 17:58
        +1

        Depends where and what you are buying.
        Under $200k spend and 8% yield is pretty easy if you know what and where to look.

  • SpaceNinja on 03/12/2013 - 22:50
    -5

    I am no expert,
    but how can one say that shares are currently a good investment,
    when every day we hear share market is going down ?

    • Devils Advocate on 03/12/2013 - 23:12
      +2

      Because negative media sells. The Australian stock market has actually performed incredibly well in the past 12 months. Most Australian Share managed funds have had returns of ~30% in the past 12 months. The ASX200 has had a return of 15%

    • mskeggs on 03/12/2013 - 23:31
      +2

      Which is why you probably need an advisor, because you have no idea whats going on.

    • SpaceNinja on 03/12/2013 - 23:51
      -1

      Thanks a lot for your reply guys.
      Here is the asx index for last month.
      http://goo.gl/xkW0dS
      As you can see its gone down for the entire month.
      you don't need an adviser to read this and also this is not
      something being made up by media.

      • mskeggs on 04/12/2013 - 00:08

        And here is 6 months: https://www.google.com/finance?chdnp=0&chdd=0&chds=0&chdv=1&…

        A much bigger move.
        And here is 5 years, a big move up https://www.google.com/finance?chdnp=0&chdd=0&chds=0&chdv=1&…

        But, of course, 10 years shows the GFC: https://www.google.com/finance?chdnp=0&chdd=0&chds=0&chdv=1&…

        Your point?
        Are you suggesting a 22yro poster should never invest in the sharemarket? Surely, 90%+ of their investments will occur in the future decades, so whether now the market is high or low matters little.
        Right?

      • Devils Advocate on 04/12/2013 - 00:16
        +4

        Haha ok so it has fallen 2.9% in the past month after two straight years of 15% pa returns. I should have opened by saying that shares are a long term investment (you don't hold them for 1 month then get out because the market went down 3%!). The market fluctuates constantly, but over time it always rises.

        Over a 5 year time frame it is extremely rare to have a negative return in Australian shares (GFC only time it's happened since the depression). Even still, over the past 10 years the market has almost doubled in value (without even taking into account dividends which are generally ~4% pa on top)

        Also don't forget the number one rule of investing. "Buy low, sell high". I know a lot of people who bought up big in the stock market during the GFC when the prices were low and have seen 100% returns in the last 5 years. They aren't selling though, because they have the (correct) mindset that shares are a long term investment that you accrue over time.

        • zerocritical on 04/12/2013 - 11:47
          +1

          Totally agree with devil's advocate. And if someone is looking at one month returns, it's called "trading" rather than "investments".

          In trading, it doesn't matter if the market is going up or down. You can always make money, given you speculate correctly. If you speculate the market will go down, 'short' the shares and buy it when low.

        • garetz on 06/12/2013 - 04:27

          Actually not true at all, if you look at the last 100 years of the share market, you will see that all the companies that have gone bankrupt are no longer listed on the exchange. That is cause the losses incurred by people investing in those companies are not considered negative asx numbers. If you included all of these stats, the asx would be in negative numbers.

          Problem is there hasnt been a bad recession since the late 80s, most people will not even remember that let alone a depression.

          With a house at least you can live with it, with shares you can wipe your ass with the paper when they go bankrupt.

        • May4th on 06/12/2013 - 09:28
          +1

          that's why you buy blue-chip shares with good dividends and buy-back schemes if you are looking for a safe, diversified investment portfolio. it's very unlikely for anything like you said to happen. remember houses will cost you maintenance, council fees and insurance not to mention interest payments which could balloon depending on where you are in the cycle

    • Shwayne on 04/12/2013 - 19:53

      By the same logic he should just buy Bitcoins right?

  • Waldo000000 on 04/12/2013 - 07:56
    +4

    Consider your risk profile. You can earn 4% p.a. by putting your money in a bank account. If anyone tells you there are opportunities to earn more than that, you must be conscious of the fact that by taking such opportunities you would be accepting a higher degree of risk.

    IF you accept the risk, many investors like you would open a Commsec account, then buy shares in an index fund. Index funds are less volatile than the shares of individual companies because they are effectively shares in the entire stock market.

    I saw a financial advisor and he suggested I put my money in a bank account to continue to save for a house deposit. Not very exciting, but very low risk. I sleep well at night. :-)

    • isidore12 on 05/12/2013 - 00:24
      -1

      I couldn't agree more. Make yourself a favour and invest either in super saving bank account. Alternatively, I would invest in Australian corporate bonds said "high grade". In both cases your capital is guaranteed. Anything else is like to go to the casino. Real-estate could be quite good if you have 600k and some time to look after it.

      • Scrooge McDuck on 05/12/2013 - 16:15

        No, "to go to the casino" is to gamble — the expected value is less than 1.

        Proper investments have an expected value of more than 1 for any time period.

        • Waldo000000 on 05/12/2013 - 18:36
          -1

          Proper investments have an expected value of more than 1 for any time period.

          Actually no they don't, at least not in the mathematical sense. This is in contrast to gambling, which you quite rightly point out has a negative expected return.

        • mskeggs on 10/12/2013 - 13:13

          You are ignoring transaction costs, which are very high for real estate. You should not expect to make any money if you are forced to sell in the first few years.

    • garetz on 07/12/2013 - 07:00
      -2

      Even keeping your money in the bank with a low interest rate is a risk, when there is a downturn, you dont know which companies are going Bank-rupt, there is a reason its called bankrupt, cause the first companies to go are the banks. The money you keep in your account is an unsecured loan, so if they do go bankrupt, you will lose that money, and even if it insured, the next companies to go bankrupt are the insurers. It is literally a house of cards. Luckily for them they were bailed out, but thats just a short term solution that makes the problem worse in the medium to long term.

  • one man clan on 04/12/2013 - 09:04

    A good starting point for shares are high yield, dividend reinvest options. Banks, Telstra (you're probably too late to get a good % return though), big miners generally fit the bill. Over time your portfolio will increase as you re-invest the dividends. You can purchase as you gain more savings, or expand.

    IANAFA

  • goms on 04/12/2013 - 09:23
    +2

    Only invest in what you know or familiar, otherwise it is akin to gambling. Talk to like minded people, eg: if you are interested in stocks, talk to friends that have invested in stocks or join investment meet ups or buy books. If you are interested in property, go to real estate agents, go to auctions, meet other real estate investors.

    While you are still young, invest in your education. Get yourself familiar with different asset classes. I think this is far better than going to a financial adviser, unless of course you can get a free (quality) finance adviser (ozbargain style) but that you have to be cautious that they are not just trying to sell their products. If you have a lot of savings that don't want to spend too much time learning about investment, then sure go to financial adviser and get them to invest the money for you.

    Good luck!

  • Euphemistic on 04/12/2013 - 10:52
    +1

    You need to know how much you want to invest as well. The following is my opinion and should be treated as such.
    Smaller amounts in managed funds can often get eaten up by the management fees, larger amounts less so.
    Super at a young age isn't the best option as, although it is safe and good returns, you can't get at it for a loooonngg time.
    Property can be good, but right now prices are a bit silly as buyers are ruling the market and you need a big amount to join the market.
    Shares are risky for short term, but you can start with a small amount and build up easily. They are flexible if you need your money back at short notice BUT they are also volatile in he he short term.
    Term deposits offer safety and decent returns but lock you money away for the term unless you pay to get it back.
    Bank accounts are not an investment too, but a good savings account will let you throw money into it and if you don't take any out will offer some bonus interest.
    Financial advisers will often try to sell you insurance products, and not be much help unless you have a large amount to invest.

    When I was in my 20s I invested in toys, bikes, cars etc. pretty poor returns there, but plenty of pleasure. I didn't spend every penny though and managed to save a house deposit using a bonus based savings account and purchased at about 26yo. My wife had an astute investor father and had several different shares and managed funds that have performed well (on average, some poor, some great) between the two of us we have a good asset base now at 40ish yo.

  • [Deactivated] on 04/12/2013 - 12:14
    +1

    I strongly recommend starting with the basics. These books are good for that:

    http://www.bookworld.com.au/book/the-australian-stockmarket-…

    http://www.booktopia.com.au/the-australian-residential-prope…

    These are designed to help you understand the concepts, structures, rules etc. They aren't get rich quick books. If you already know a little there will be parts that are a little too basic, but it's all important.

  • eurofoti on 04/12/2013 - 12:19

    I was thinking of setting up a fixed term deposit, but when I go the the Ubank website, it offers a rate of 4.00% pa if I have my money locked up for 12 months. However, currently I am getting 4.26% by just simply having a savings account (includes the bonus rate) which seems higher than the 4.00% offered by the term deposit. Am i missing something obvious?

  • Hocings on 04/12/2013 - 13:43

    Some on-line savings accounts offer 4.3% to 4.4% for the first 4 months and then revert to 2.9% to 3.25% after that. RadoDirect offers 4.4% for the first 4 months and then 3.25% compare with UBank's offer of 4.26% and then 3.56%. Are the Suncorp's flexiRates accounts fixed term deposits (FTD)? UBank currently offers 4.1% for its 12 months FTD, whereas, Rabo offers 5.00% for its 60 months FTD.

    • Waldo000000 on 04/12/2013 - 14:07

      The flexiRates are great. They are sort of fixed term deposits but not really, because:
      1. YOU select the duration you want, minimum 1 month (it will then display the offered rate. e.g. 4 months is currently 3.95%)
      2. You can withdraw early - but they will pay you less interest as a result. This has never been a problem for me because of 1.
      3. You can have up to 15 flexiRates at any time, and creating/terminating then is free and instant via internet banking

      The catch: $5 per month account fee. Not a big deal if you have a decent amount of savings.

    • one man clan on 04/12/2013 - 15:42

      60 months!? 5 years at 5% is a terrible investment idea.

      • Hocings on 05/12/2013 - 10:29

        Depends on your appetite for risk taking. A guaranteed risk-free yearly return of 5% for five years is in my book a sound investment strategy, especially as there are no additional costs involved. What have your super returns been like for the past 5 years? Are they anywhere near 5% after you have deducted the admin & other hidden fees?

  • rozifus on 04/12/2013 - 13:44
    +1

    If you'd be interested in something high risk, high return, have a look at the crypto-currencies (aka. bitcoin and friends).

    I'm mostly interested in the smaller ones myself because I think many of them are undervalued, but I should point out that people have very mixed opinions about investing in smaller cryptos, (as well as cryptos in general I guess).

    Anyway, here's some links if you're curious.

    https://www.coinjar.com/
    https://www.cryptsy.com/
    http://coinmarketcap.com/
    http://www.cryptofolio.info/
    https://bitcointalk.org/index.php?board=67.0

    Edit: I should add that I see cryptos as being a great new technology but I think that the current prices are a bubble and I wouldn't recommend any crypto-currency as a long term investment. I am however holding some in the short term and will hopefully get out in a month or two. Just my opinion though.

    • Cheap Steve on 04/12/2013 - 17:39
      +2

      or you could remember Warren Buffett's wise words "the first rule of investing is not to lose any money and the second rule is not to forget the first rule".

    • Shwayne on 04/12/2013 - 19:54

      Most of the smaller ones, and especially Litecoin are overvalued in my opinion.

    • May4th on 04/12/2013 - 20:45

      your money is probably better spent betting on horses. it's likely you'll know more about racing than crypto-currency. and it won't be as volatile

    • frinik on 04/12/2013 - 21:58

      Also if you want to get into it you don't have to buy a whole coin.
      If you want to get started quickly you can download https://multibit.org/
      and go to either getbitcoin.com or bitxoin.com to purchase with cash over counter deposit. You'll be waiting a week or so for coinjar and can only wire $500 at a time for the first week.
      However this information is only useful for you if you're interested in high risk high return strategy.
      I like riding the rollercoaster, but you'll have to do your own research on it.

      • May4th on 04/12/2013 - 23:09

        i think you are confusing investing with speculating. they are certainly not the same, google ben graham

        • frinik on 05/12/2013 - 15:35

          oh yes…its highly speculative :)

    • KiLLUMiN4Ti on 05/12/2013 - 18:42

      what about tulips?? ;)

    • hahaboy on 05/12/2013 - 20:12

      I have actually considered them. They seem like a bubble though….but having said that, i would be happy to still take a risk on them and TRY cash out before it bursts.

    • mskeggs on 10/12/2013 - 13:25

      How is this "investment" working out for you?
      Volatility seems…high:
      http://bitcoin.clarkmoody.com/

  • Hocings on 04/12/2013 - 13:51
    +1

    A decent, honest financial planner/adviser once told me - If I'm so damn good at making my clients rich, would I still be working? My advice is that the person having your best interest at heart is yourself. The good book says - A fool and his money are soon parted!

    • Baghern on 04/12/2013 - 14:38
      -1

      There's confusion with what a Financial Adviser does/pretend to do and what people think they do

      A financial adviser can not comfortably tell you which shares to buy, otherwise as stated above, they'd be making a fortune doing it for themselves.

      All they do is help you to edge your bets, of which they take a small portion for immediate advice or a long term commission. Which is why many tell you to invest in blue chip stocks or managed funds. By doing this, after the initial advice you really don't talk to them anymore, yet they continue to earn a tiny % off you/managed fund they referred you to.

      Advise $100million worth of client funds and take a 0.1% "trail commission", there's $100grand or in more greedy cases 0.5% 500k for doing nothing every year.

      • Devils Advocate on 04/12/2013 - 16:15

        That's a massive generalisation about financial planners. You are talking about commission advisers, which make up about 50% of the financial planning industry (this number is falling due to FOFA).

        Fee-only financial planners take an initial fee to give advice and implement it, and potentially a flat ongoing fee if you decide that you would like to see them yearly or how ever often. This ensures that you know that they have your best interests at heart and aren't telling you to invest in something because they will receive a higher commission

      • Cheap Steve on 04/12/2013 - 17:42

        Sounds like you have had a bad experience with financial planners. There are the good, bad and ugly in every profession. Shop around until you find a good one.

    • Cheap Steve on 04/12/2013 - 17:37

      Doesn't sound like such a decent/honest financial planner to me if he/she is "trying to make client's rich".

      He/she should be understanding the client's long term financial goals and then setting out plans for the clients to achieve those goals eg budgeting, insurance, tax, estate planning and investments.

    • KiLLUMiN4Ti on 06/12/2013 - 01:58

      "A foole and his money is soone parted" is not found in the Bible, rather in John Bridges' work 'Defence of the Government of the Church of England' -1587 ;)

  • hugh on 04/12/2013 - 15:28
    +26

    There is only one true answer for a young person on the road to adulthood.
    Invest in yourself.
    Spend your valuable time and scarce resources to better your skill set. Whether it be formal education or on the job training, learn all you can from the people around you and move on. At your age, new and varied experience will add to your personal capital which you can use to drawdown in the future.
    Follow your true passions and never give up.
    Don't chase money, better to let it seek you.

    • MrLeE on 04/12/2013 - 17:13

      This is so true. Thanks mate.

    • oringal on 04/12/2013 - 22:19
      +2

      your dp so matches with what you just said lol.

    • MrLeE on 05/12/2013 - 09:29

      Posted this on FB and credited you. Got 24 likes and counting.

  • t_c on 04/12/2013 - 18:16

    OP needs some NZT-48

  • twodollah on 04/12/2013 - 18:55
    +1

    Four words: exchange traded index funds.

  • misu p on 04/12/2013 - 21:35

    There is no good answer.

    Putting money into a bank MIGHT not be a good idea. People who tell you that put your money in that account and you get 5% pa usually do not know what they are talking about. That 5% means actually nothing if the inflation rate is 6%. You are loosing money that way, after 1 year you will be able to buy less then 1 year before. You ALWAYS have to take into consideration the other factors, 1 rate alone means nothing.

    Also you have to take into consideration other currencies too. At 1 point AUD was I believe 66% of the USD. Imagine if you bought then AUD then, sold it when it was 1.06 USD, bought USD and then sold it again now. The earnings would be extraordinary (hindsight is a wonderful thing right?).

    Regarding the Australian house prices. This was one of the few countries in the world that did not have a decrease in the house prices. This is extraordinary to be honest. Everybody else lost money except the Australians. Now you can look at it as the bubble did not pop, yet. Is it a bubble now? Maybe it is maybe it is not. Will the bubble pop at 1 point, well everybody else's did. From what I know Australia is suppose to have 30 million people in around 20 years, maybe the bubble will never pop if the demand increases.

    My honest opinion is, you are still young, take that money and get an MBA, like somebody else said, invest in yourself. With an MBA you will get more money probably at your job. Then you will be able to answer yourself the question you are asking for now.

    • Waldo000000 on 05/12/2013 - 10:39
      +1

      That 5% means actually nothing if the inflation rate is 6%.

      5% does not mean nothing, it means 5%. True, it's less than 6%, but it's more than 0%. If you think you can get more than the cash rate elsewhere, great - but you will be taking a larger risk. You do not strictly need to take into account the inflation rate when choosing between investments - just the degree of risk you're willing to bear and expected rate of return.

    • Hocings on 05/12/2013 - 10:49
      +1

      There is no guarantee in life. An MBA may and may not be useful. I graduated from the RMIT's MBA program in 1999. Some of my course mates have done well career-wise & others not so. Having an MBA was once a prerequisite to move into a management position. Not so today.

  • Cheapo333 on 05/12/2013 - 08:31

    If you are working full-time, you are likely already a diversified astute investor through your superannuation.

    Rather than picking individual share or bonds, you apportion your asset allocation depending on your risk tolerance, goal and investment horizon in three classes:
    equities (shares, property)
    fixed income
    cash
    Within these classes, there are funds with differing risks.

    Investment through superannuation is also tax efficient as it is taxed at 15% rather than your individual tax rate.

    Yes, a boring post and tip, especially when superannuation is so far away at your age, but hey, it's your money.

    • mskeggs on 10/12/2013 - 13:30

      Unless you earn a low income and super is taxed higher or the same as your marginal rate, in which case it is a very stupid investment given the opportunity costs of locking away scarce capital until you are 67.

  • Caped Baldy on 05/12/2013 - 11:55
    +10

    This year, I invested in pumpkins. They've been going up the whole month of October and I got a feeling they're going to peak right around January. Then, bang! That's when I'll cash in.

  • dbadcock on 05/12/2013 - 16:36
    +1

    If you are looking to invest in property one thing I can say is a good idea is a FHSA, or First Home Savings account.

    It is insured by the government, and they pay out 17% p/a up to $6000 invested per year.

    The downside is that you must use this money to buy a house or renovate. Otherwise it will go into your superannuation.

    https://www.moneysmart.gov.au/managing-your-money/banking/sa…

    • hahaboy on 05/12/2013 - 20:14

      Looked into it already ;)

  • abc on 05/12/2013 - 16:51

    If you are interested in shares I find it is good to invest with companies you deal directly with.

    Eg.
    You buy food from Woolworths - buy WOW
    You bank with Commonwealth - buy CBA
    Your telecoms are with Telstra - buy TLS
    etc.

    This way you won't feel (so) bad about handing your money over to them, as you become an owner of the business and have a vested interest in them having increased revenue (in the form of increased dividends and/or capital gains).

    Yes prices are high at the moment and it wouldn't be a bad idea to wait but once you are in the market reinvest the dividends continually and you are set.

    As a beginner if you have little experience or not much knowledge I wouldn't look into anything too complex or hard to manage. The only way to learn is via first hand experience. Yes you may lose money but that is the whole part of the learning experience. These learning experiences might save you from making poor investment decisions when you are older (and can't afford to lose money).

    Have you considered something like a Comsec Share Pack which is a great starting point with low brokerage.

    • May4th on 05/12/2013 - 17:59
      +3

      although the quoted companies are relatively safe investments, the reasoning is flawed. emotion should play no part in investment, and buying shares of a company you buy from personally makes no difference whatsoever.

    • hahaboy on 05/12/2013 - 20:26

      Tried that pre-gfc unfortunately. The pack contained ABC learning too =='
      Hence why i am cautious of investing again.

  • rdchristy2 on 06/12/2013 - 07:02

    I'm a stay at home mum and I learnt ALOT about the share market (and property investment and superannuation..all handy, even though shares was my main focus) on AUSTAR / Foxtel Channel 602- The Business Channel). I found it so informative and helpful when I started share trading…I was addicted to watching it to be honest..I loved their chat sessions and talk back shows.

    I know they had vested interests in many of their recommendations on the show, however, I would take their advice, and check it out myself using information on websites…value, growth, capital, risk ratings…broker recommendations predictions, company profiles, asserts, debts, forecast growth, dividend history, etc…and cross reference at least 3 different sites information. From memory, some I used were Investor Daily, Investsmart (sorry, can't remember the rest).

    And I would also look at the information that Westpac gave on the companies (that's who I traded with). Once you open your account, you have access to their own financial research as a trader, I found this very helpful also (when they gave me full access that is…)

    Anyhow, that's what I did, it worked out very well for me. The only reason I don't do it anymore is that I used the money I made to buy a house :-) (I got a bit addicted to it..and l sleep easier at night now..a couple of downfalls from playing the game)

    • May4th on 06/12/2013 - 09:31

      the problem with hot stocks is everyone else has the same access to the same easy information so the element of speculation is introduced. if you are trading and not investing, you might come out on top for a while but most people will sooner or later get burnt. so make sure you restrict yourself to use only a small portion of your assets to speculative trading

  • ilostnemo on 06/12/2013 - 10:31

    The ASX is so heavily manipulated, it's not funny.

    I wonder what goes on, when a company is about to release some good news, ie struck oil, made billions, found gold. Do they keep it hush, till they announce it to the market. Ummm No

    And those who say Blue Chips is the way to go, yes blue chips are the way to go, but shares if they don't perform go to Blue Chip, Is Telstra and Qantas blue chip?

    I would be looking at investing in property, for the next 60 years you will require a roof over your head.

    I bought ABC learning centres, everything looked so good, buyers recommendations, announcements were grear, proven model etc then so quickly 0.

    • one man clan on 06/12/2013 - 12:00

      This is why you need a stockbroker you trust who can analyse the data, rather than doing the research yourself. Lots of people were looking at ABC's underlyings and recommending against it, but certain vested interests were pushing it, which left the small people in the lurch.

      It sucks, but it happens.

      Diversity and yield are the best angles for beginners.

      • ilostnemo on 06/12/2013 - 12:34
        +1

        The banks were heavily invested in this one as well, all the doomsayers came on board when the trading halts were announced not much you can do, anyway share a thought for these guys

        http://www.ubs.com/au/en.html

        They bought 110,731,409 shares in Qantas 2 days ago.

        And for the record can you please put me on to an honest stockbroker, mine are all duds.

    • [Deactivated] on 06/12/2013 - 12:42
      +2

      Passenger airlines are NEVER blue chip. Ever.

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