Trading, fund mgrs or managed funds?

Hi everyone.

I have been looking into investing for about the last 3 years (mainly property) but only really had < $50,000 to invest. I am 23.

I am now looking into investing about $280,000 cash.

I want to grow the cash over 10-20 years and avoid property if possible. I would like to make substantial returns but don't know if I am capable of daytrading by myself. I also don't want to lose my hard-earned cash. :o

Any "ideas" would be very much appreciated (no "advice", I know) ;)

Thanks

Why do you want to aviod Property!!

With $280K cash you could positively gear possibly 2 or even 3 properties.

Then youd have capital appreciation on around $900K of realestate from 3-13% (Thats still the % increase in my area last year.)
At 5% thats 45K or 16% return.
10% 32% etc.

OR buy 2 and then trade 1 third.

With $280k cash you have many options and youll have the advisors falling over one another to get their commission.

Peronally Id have a piece of each RIGHT at THIS time.
5 yrs ago it would have been all realestate.

Your about 50K in front of me at that age.

I want to avoid property because I live in Sydney. The whole property thing here is a complete scam IMO. Yes, I have worked in RE - NEVER again!

I want to avoid property because I live in Sydney. The whole property thing here is a complete scam IMO. Yes, I have worked in RE - NEVER again!


Can you explain?

Agencies making up prices out of their heads depending upon who is interested, over-inflated market prices, misrepresentation, etc. I am sure people have heard all the horror stories.

Do you really think that property is the best choice?

What sort of profit could I make from the cash over 10-20 years as opposed to trading?

PS. I really appreciate the help.

Agencies making up prices out of their heads depending upon who is interested, over-inflated market prices, misrepresentation, etc. I am sure people have heard all the horror stories.

Hmmm there is no reason why you need to be caught up in this.
As a savvy investor surley you would have your own valuer and your own building inspector.You dont have to buy the offer.Anyway seems your intimidated by the horror stories and some youve seen.

Do you really think that property is the best choice?
Property is A choice and as you seem to be cashed there could be positive gearing opportunities that could be investigated.If your not up with property investing get yourself a mentor who has a proven track record---surround yourself with qualified people---seems you can afford it.

What sort of profit could I make from the cash over 10-20 years as opposed to trading?
Banks will get around 5% Property again who knows its a guess--there are so many factors.
Trading ---who knows----Id say with zero experience Id leave it alone.

You can afford experts so search them out INTERVIEW THEM to see if they are who you need.
PS. I really appreciate the help.

------

I think the first thing to do is put the cash somewhere that will pay decent interest (online savings account such as ING or a term deposit) and then think about what to invest in. The 5.4%+ interest that you should be able to get is better than nothing whilst you consider your options (remember that there will be tax to pay on this interest). $1260 per month interest is not to be ignored in my opinon.

As for what to invest in, what knowledge do you have now? Specifically, do you have a reasonable understanding of the "big picture" - economic cycles and so on. If you do then trading the share indices (there are various ways to do this) or forex could be for you. Commodities too.

If not, then you either need to acquire such knowledge or learn technical analysis (T/A) and trade that way. T/A seems to be the more common approach to trading although personally I have had more success with (and interest in) the fundamental approach.

Whatever you do, money management is critical. At this stage most of your money should remain in the bank (hence the need for an account that pays decent interest) with only a small portion used in your trading / investing. Only when you are comfortable that you have risk under control and can make a profit should you consider withdrawing more cash from the bank and trading with that too.

You WILL make some mistakes - everyone does so keep the size of your trades fairly small at this stage. That way if something goes wrong it won't hurt too much (but of course small trades aren't going to make much profit, the point being to learn how to do it and THEN increase the size to earn decent $).

One key to learning anything is to always understand both sides of any argument. Whilst you may not agree, it is always helpful to thoroughly understand both sides. For example, even if you think real estate is not a good investment right now (I agree) then you should make sure that you thoroughly understand BOTH sides of the argument. Listen to and understand the arguments of those advocating property. Of course you can continue to disagree, but be sure to understand what they think AND WHY. The "why" is most important since it's a question that too few ask. It's amazing how many potential mistakes you will avoid by asking WHY someone is saying what they are saying. (Don't literally ask them, they may well lie, but do your own research and find out the facts whenever possible.) (The comment about honesty is a general comment and not referring to anyone on this forum :) )

Before you invest in anything, please note this point. With any investment, always decide BEFORE you buy at what point you will sell AT A LOSS because the price has gone the wrong way and you have been proven wrong. The big mistakes usually have something to do with "not wanting to sell at a loss" - if it's going wrong, get out.

Agencies making up prices out of their heads depending upon who is interested, over-inflated market prices, misrepresentation, etc. I am sure people have heard all the horror stories.

Do you really think that property is the best choice?

What sort of profit could I make from the cash over 10-20 years as opposed to trading?

PS. I really appreciate the help.So you will be avoiding one of the best asset classes because of this experience? Property is just a magic asset class in Australia for many different reasons including the publics perception of it and the huge tax advantages.

Put your money somewhere capital safe until you know what YOU want to do, and not what you have been advised to do.

A very smart investor described the property/shares mix it a bit like this. "I like bacon with my eggs" :)

Bankwest are still offering an account with online access at 6%pa I believe. Something to consider until you get the opportunity to consult with a variety of professionals in order to weight up your options.

Thanks for the replies.

I'll check out some online access accounts and see what's doing.

As for avoiding property, I should have mentioned I own a house aswell, but I have been told by family that I should invest cash in the market rather than in property. :o Plus everybody says that a house "is not an investment".

Does this change the advice at all?

Also, I am not risk averse, I just don't trust people (see above).

Thanks for the replies.

I'll check out some online access accounts and see what's doing.

As for avoiding property, I should have mentioned I own a house aswell, but I have been told by family that I should invest cash in the market rather than in property. :o Plus everybody says that a house "is not an investment".

Does this change the advice at all?

Also, I am not risk averse, I just don't trust people (see above).

Yeh I had a family like that.
They still have their houses---their cash---- and I have 9

Those who say a house isnt an investment have never had a house/s as an investment!!

Seriously buy "Dont Sign Anything" by Jenman.

Agencies making up prices out of their heads depending upon who is interested, over-inflated market prices, misrepresentation, etc.

For a minute there I thought you were talking about analysts at stock broking firms.

Why do you want to aviod Property!!

With $280K cash you could positively gear possibly 2 or even 3 properties.

Then youd have capital appreciation on around $900K of realestate from 3-13% (Thats still the % increase in my area last year.)
At 5% thats 45K or 16% return.
10% 32% etc.

OR buy 2 and then trade 1 third.

With $280k cash you have many options and youll have the advisors falling over one another to get their commission.

Peronally Id have a piece of each RIGHT at THIS time.
5 yrs ago it would have been all realestate.

Your about 50K in front of me at that age.

hi tech,
seems like you really know your stuff from reading your previous posts but is real-estate all that? Where do you find positively geared property geared property nowadays?

If interest rates go up this makes it an even more difficult proposition. After all is said and done would it not be a better idea to ride out the storm in a cash mgmt ac while paper trading then go for share trading when there is a better outlook?

I'm in much the same position as juiced and that was my plan but after hearing your valued opinion i'm thinking otherwise.

Is it unreasonable to expect end of day trading to outperform positively geared property if you do your homework and fomulate a sound trading strategy?

I was expecting 50% p/a while putting in 3hrs a day for analysis/further education: is this possible or am i aiming too high?

Loakglen


hi tech,
seems like you really know your stuff from reading your previous posts but is real-estate all that? Where do you find positively geared property geared property nowadays?

Given enough deposit you can positively gear any property----The days of buying with little or no deposit and gaining a positive return are gone for the time being but youll see them again in your lifetime if under 30.

If interest rates go up this makes it an even more difficult proposition. After all is said and done would it not be a better idea to ride out the storm in a cash mgmt ac while paper trading then go for share trading when there is a better outlook?

There are times to be in the market both realestate and shares (More to the point a time to GET INTO these markets) and a time to step aside and wait.
Many do just that---the astute investigate ways to
(1) Use both markets to their advantage NOW (EG,Buy and sub divide --property,Options--trading as a couple of examples).
(2) Do as most do and WAIT---this is fine as long as you can recognise opportunities when they hit you in the face---if anyone missed the last property boom then the ability to recognise opportunity maybe the BIGGEST drawback of all for these people (I know many!)

I'm in much the same position as juiced and that was my plan but after hearing your valued opinion i'm thinking otherwise.

Well if I'm making you think then I've been successful as thats my main aim in being on this site!

Is it unreasonable to expect end of day trading to outperform positively geared property if you do your homework and fomulate a sound trading strategy?

Absolutely in terms of return on $$s invested you certaintly can---Ive done it myself and consistantly over the last 3 yrs---consistancy is the key---anyone can have a 50% winning trade but string this type of return and more over years---Is'nt that easy---infact only around 5% can do this evidently--I believe that!!

But in terms of TOTAL capital return 99.9% of the time Property will win hands down---here is why.
You wont invest anywhere near the amounts of money in trading as you will/can in property---simply banks will loan 100% on property ----try getting 100% or even 80% against your house for share investment!!

Even if you could I'll bet youd take the loan for a house but stop abruptly at shares!


I was expecting 50% p/a while putting in 3hrs a day for analysis/further education: is this possible or am i aiming too high?

Of course its possible if I can do it then anyone can!!!
Techtrader the system I developed for public trading returned/well it still is over 150% PA on initial funds traded on Margin(50% leverage).
But like any business you wont maintain that sort of return without a sound PROVEN trading Methodology.
Oh and 3 hrs will become 20 mins a day if its any good!

thanks heaps for putting that in perspective tech.
keep up the good work on your new thread too: learning heaps!