30k to invest - investment timing/strategy

[hotbmw]

Hey guys
I only recently found this great site so a hello to you all.
I was hoping to get some opinions on the below. I know you cant recommend but i was hoping to get some discussions going.

I have been sitting in cash for about a year now. I have 30k ($30,000) to invest.

I dont want to day trade, i want to invest for the long term, no end date to be honest but im obviously going to keep an eye on my stocks and make changes as needed.

I dont see the market going anywhere fast, it may be like this for months, maybe others can share there views on this. Only movement in the months to come must be down.

Therefore i was thinking of dollar cost averaging in 3 parts, 10k at a time and moving in again each time once a valued opportunity arised.

I was thinking of starting to buy any day now at:

3k into BHP - if drops another 10% from lows today of $24.93
2k into Woodside - if drops another 10% from lows today of $35.87

2k into Westfield - if drops another 10% from lows today of $14.04
1k into Stockland - if drops another 10% from lows today of $3.75

2k into Lion Nathan - if drops another 10% from lows today of $8.65

I know the prices above are quite low but we really dont know how low the market could go.
If i purchased the above and if prices were breached again by another 5% i would buy more and same again if they fell a further 5%. If that was to happen it would mean i averaged in about 15% off current lows.

Do you think with a long term view and if the above was achieved do u think it could be right or fair to assume that my 30k could be worth 40 to 50k in a few years? In a few years things should have settled and a normality would be back. I would have possibly 50k in a few years and returning me dividends of 5% or so?

What are your thoughts?

Also do you feel i am missing a sector or not diversified enough?

I know some will say that the timing of entry is not so important if i have a long term view or cant be timed at the bottom but as i see there is no rush and there is no good news about and i dont expect it any time soon so i really think these prices can be realised.

Other stocks im watching are:

The banks but i have an aggressive view on them, lower future earnings, capital may need to be raised for some and some additional suprises are in stall so i would buy at around a 25% discount from now.

Telstra

Caltex

Newcrest

Wesfarmer

Sonic Health

Oz Minerals

What are your thoughts guys? Should 1 of the above be added to my portfolio?

What are your ideas or entry strategies?

Its just sharing ideas. I wont act on 1 persons ideas, i just want to hear opinions. Maybe hear other peoples strategies etc.

Thanks guys
Rob
:)

[chops_a_must]

If you are not interested in following individual stocks day to day, you may be better off looking at index funds, or sector ETF's that you have a specific view on.

You aren't as likely to lose your shirt, as say if a company gets into real strife. There is not much chance of your investment going to zero, and you don't have to worry about it day to day if you are truly in for the long term.

[hotbmw]

Sorry when i said im not interested in day trading i just mean i dont plan to buy and sell daily. i will follow and manage the shares and move in and out over the long term as required.
sorry for the confusion.

i hope to hear your thoughts soon.

Thanks
Rob

[Judd]

Sorry, mate, but I just don't see where you are coming from.

Are you a long-term investor, ie place the dosh and hold forever?

Are you looking for core holdings and then trading the margins?

Are you placing your hard earned into some specific stocks and then trading on their price movements?

Just clarify the main ingredient: YOU.

Cheers

[chops_a_must]

Sorry when i said im not interested in day trading i just mean i dont plan to buy and sell daily. i will follow and manage the shares and move in and out over the long term as required.
sorry for the confusion.

i hope to hear your thoughts soon.

Thanks
Rob
That's not what I mean.

The problem is, in this market, a week can go by and you may lose half of your capital if you aren't taking note of what is happening. When I said day to day, I meant that you don't want to be obliged to do this. You can go away for a few weeks and know nothing catastrophic has happened.

Picking winners atm over the long term is pure folly, unless you are prepared to really really do some homework. And even then you would still have to be prepared to keep a close eye on things if they are changing.

[Agentm]

i am kinda surprised this thread is open..

your asking for investment advice, which i dont believe is the right thing to be doing on ASF..

good luck..

[jackson8]

if i had 30k to invest i would be putting it straight into a high interest bearing account
guaranteed not to lose a cent
compounding interest month after month
interest rates may not be high but lot less risk than buying shares
need to look at your risk reward ratio

[hotbmw]

agentm , i specifically said in the post that its food for thought, that i want to hear what other people are doing. this is what i will do without a doubt. im interested to hear what others will do. what they think of what i will do.
i dont see the problem in this post. sorry that u do...

jackson8, thanks for your reply, im in my early 30's so my investment time frame is quite large so im happy to ride the waves and get out when i feel its time too like i did 1 year ago.

judd, i would hold until im happy with the return, could be 3 years but could be 10. i would also be looking at trading on price movements. i dont need to be in them for years but im happy to park my funds with these quality blue chip companies as opposed to a safe 4% cash return....

[nunthewiser]

just so happens its your lucky day!

i am currently looking for investors in a deal i have going in nigeria

please send money order to a.nun.on a.mouse

po box 1234 geraldton wa

cheers , will post receipt and deal details once money cashed

[hotbmw]

haha

[chops_a_must]

just so happens its your lucky day!

i am currently looking for investors in a deal i have going in nigeria

please send money order to a.nun.on a.mouse

po box 1234 geraldton wa

cheers , will post receipt and deal details once money cashed

Get back in that Greed is Good PTY LTD, Gordon Gekko thread! :D:D:D

[Agentm]

"agentm , i specifically said in the post that its food for thought, that i want to hear what other people are doing. this is what i will do without a doubt. im interested to hear what others will do. what they think of what i will do.
i dont see the problem in this post. sorry that u do..."


just dont like seeing people asking for advice, it obvious you saying your not.. so ok then, good luck, but if its really advice (oops comment) your seeking, then i will give you mine, which is totally useless in any case..

save your cash and wait till the sectors have settled down some what research the crap out of them and when your sure about things, then invest cautiously.. .. a very good friend of mine wanted to invest 5 times your amount a few months ago after selling some real estate... i told her to keep it in savings, and to absolutely not go into the share market under any circumstances, this clown of a broker was trying to pressure her into buying in the same fashion your suggesting, using points like, its going to come back, and you buy gradually.. so far her 150k is doing far better now in savings than it would have if she went into blue chips as suggested.. and you know what, until she studies the stock market and understands the sectors or the shares she would buy, its going to be a far better place to saving the capital ratehr than investing on a guess, or some brokers guess.

right now, today, this moment, if your not 100% sure of what you have invested in, what the business is about and where its headed.. and what the exit strategy is.. then your really throwing huge amounts of capital at very high risk if you make one misjudged decision..


you know you may do better investing in a po box in geralton WA..

all imho and dyor..

[sutti]

If you're still quite new to the stock market, which I'm guessing you are, I would encourage you to learn and learn and read and read. Develop your own style as everyone has their own. Yours could work just fine. Chops and Judd say you should invest in an index fund, piss that off. You can make more money on your own if you educate yourself, be patient, disciplined and understand how risky the stock market is.

I wouldn't be investing now, wait and have patience. The market will be here for ever. No one really knows what the hell is happening at the moment, we know the causes but no one knows how it will really play out and finish.

Read, research and find a few stocks that you like according to your criteria. If it's for the long term, make sure they've got strong balance sheets, good roe and a good competitive advantage.

Long term investing, read the Intelligent Investor. It might be a tough read for you but if you can't read it, you probably shouldn't be investing. Good luck!

[hotbmw]

Thanks Sutti. Good advice!

[seasprite]

Hey guys

2k into Woodside - if drops another 10% from lows today of $35.87



Just out of interest , what is the minimum holding for WPL , surely it's more than 60 shares if you plan on buying 2k worth @ $32.28 (if it drops 10%) + brokerage for buying & then future selling costs taken into account . I think you may have do quite a bit more investigation before jumping in because it sounds like you have done none really.

[nunthewiser]

Just out of interest , what is the minimum holding for WPL , surely it's more than 60 shares if you plan on buying 2k worth @ $32.28 (if it drops 10%) + brokerage for buying & then future selling costs taken into account . I think you may have do quite a bit more investigation before jumping in because it sounds like you have done none really.

$500

i think maybe it is you that needs to look into things

www.asx.com.au

[shaunQ]

In my view, as a fairly recent new commer myself, is that you can not "invest" in the market in its current state. You can gamble on it, or if you are highly capitalised and skilled, you can trade it. But its not an investment.

From what I can see, most online banks are still offering high 6-7+% interest rates. (commsec for 1), which is extremely good against a 10%+ loss or a complete wipeout.

[hotbmw]

seasprite, its news to me that i cant invest 2k into a stock. also its 2k net, ill allow for the trading fee.

shaunQ, 6% gross returns after taxation makes it under a 4% return.

investing in shares with franking credits and capital gains is what i want & will return more obviously in the long run from here.

as i said im not rushing into it, i said ill wait to see if it falls another 10% but i may wait a bit longer, we will see.

[Julia]

shaunQ, 6% gross returns after taxation makes it under a 4% return.
Then you need to allow for inflation which is presently 5%.



investing in shares with franking credits and capital gains is what i want & will return more obviously in the long run from here.
Perhaps not wise to count on the dividends given further falls in company profits almost certain to come. There have been cuts in dividends already and today even James Hardie have cut their dividend. So anyone thinking the dividend income and franking credits will balance out any likely fall in capital might need to reconsider.

[hotbmw]

Hi Julia
Yes i saw that with James Hardie also.
But i mean over the long term, if not over the next year or 2.

Good point about inflation.

[Shrewd Crude]

hey hotbmw,
Now might be the time to invest, but one thing is for sure...
there will always be great opportunities on the sharemarket... so why not wait when market risk is lower? I think we will get a double bottom (On the DOW) or a slight overshoot to perhaps 7,000-7,500...
Sutti said exactly what Ise about to say... forget about index funds...
do it yourself... in this game you can only trust one person...
and thats you... learn it, and get hands on experience...
...
I really think you are looking at the wrong sorts of stocks mate...
Large stocks are not really ideal and they have proven to me this year why that is the case... We have seen large stocks fall as much as small stocks...
eg STO down 50% in 3 weeks... BHP off massively... etc etc..... when times are good small stocks (to medium stocks) outperform large stocks hands down...
so much better risk return... also smaller stocks give you leverage that big stocks dont give you...
I wont go into what sort of small stocks you should look at...

You give very vague details in your first post...before you even go into that, think about your risk profile... and good luck... let us know how you get on...
questions are welcome...
peace...
:cool:
.^sc

[shaunQ]

shaunQ, 6% gross returns after taxation makes it under a 4% return.


Yes true, profits are taxed whilst losses are not.


Then you need to allow for inflation which is presently 5%.

Yes, but the point was in comparison to losing 10+% of your capital in the market. The market also needs to compete inflation.

[aleckara]

The real problem here is that as a previous post stated if you aren't willing to learn to trade (and not everyone wants to be a trader) this is a market for gamblers. I wouldn't invest in high dividend stocks if the capital loss will exceed the dividend. Your losing money.

The market is on a downcycle at the moment IMO. Why put your money into that? Government has stuffed things up with low interest rates, and short selling bans as well so they are really trying to encourage you to lose your money.

[The Edge]

Monday 17 November 2008

To the original poster:

Sit on your money.

If you want to invest in something, spend
$25 or $30 an buy:

"How to Make Money in Stocks: A Winning
System in Good Times or Bad, 3rd Edition
by William O'Neil"

You will see how to take responsibility for
your own buy/sell decisions without having
to rely upon someone else. No one has a
more vested interest in your success than
you.

There are plenty of books out there, but
this one is an excellent primer for the beginner,
and not so beginner, alike.

Cheers!

FWIW:

Dollar cost averaging is a fool's errand.

[brty]

Hi,

Add to your winners (shares going up), get rid of your losers, (shares going down).

That is age old market wisdom, it is repeated all over this site, virtually everyone agrees with the concept.

Then people constantly come up with the plan to buy more because they are cheaper (average down). All this does to a portfolio is guarantee that you have most of your money in shares that have lost the most of their value.

In the long run you will be a trader, ie buying now, selling at some point in the future, whether that be 2,5,10,20 or 50 years time. In the long run most stocks go to $0, (this includes bluechips).

Buy something now (only a little bit), get a few books and start getting educated. The reason to buy something is that you then have skin in the game. Be prepared to lose a little bit on what you buy, then sell it for a small loss, you can always buy it back later if it meets your criteria after a bit of research.

brty

[hotbmw]

thanks brty. will do that.

wow so many differing opinions. i was always told by so many that dollar cost averaging was a good thing....

i just downloaded the book now "How to Make Money in Stocks: A Winning System in Good Times or Bad"

Thanks.
Rob

[BearCuban12]

thanks brty. will do that.

i just downloaded the book now "How to Make Money in Stocks: A Winning System in Good Times or Bad"


Hi Rob - Where do you download the book from?

[vkdirector]

Where do you download the book from?

I found the book here http://knowfree.net/2008/07/17/how-to-make-money-in-stocks-a-winning-system-in-good-times-or-bad.kf

I think the direct link is here http://rapidshare.com/files/129078435/HowMakeMStocks.rar

Hope that helps out

[hotbmw]

hi bearcuban
sorry i didnt see ur question.
if u dont have the book yet let me know.

pretty much any book is online, u just need to know how to get it

[hotbmw]

after reading more, learning more, convincing myself the 3300 support levels will be broken, i hope i didnt miss the bottom :(
todays lows were about the prices my initial post stated....

fingers crossed

[shaunQ]

Either way, even if it was the absolute final bottom, it will most likely retrace to similar lows again in the near future.

[kam75]

Sorry when i said im not interested in day trading i just mean i dont plan to buy and sell daily. i will follow and manage the shares and move in and out over the long term as required.
sorry for the confusion.

i hope to hear your thoughts soon.

Thanks
Rob

Hi Rob

I'd wait for the market to turn around first as its still very early stages. With 30k I would invest into 4-5 companies that have recently had a large change in volume, are rising in OBV and price, outperforming the rest of this stale market. Hint - look at some of the small to medium caps in the resource sector. These will be the new leaders once the rest of the market begins rising. Use a tight protective stoploss and trail up as their trend unfolds.
best of luck

[joeyr46]

after reading more, learning more, convincing myself the 3300 support levels will be broken, i hope i didnt miss the bottom :(
todays lows were about the prices my initial post stated....

fingers crossed

The bottom isn't in yet it will come after everybody stops trying to pick it and stocks worth buying wil have already bottomed and showing signs of being accumulated. It's never quick most bottoms take time to develop and most people miss them because we're impatient. Also if your in for the long haul the bottom or a bit above when the pattern has developed isn't going to matter

[Tukker]

I did a nice technical analysis course in Perth over the holidays. It taught me how to design and trade within a trading system that i was comfortable with. The system tells you what shares to buy, how many to buy, when to buy them, at what price etc, without all the, "hey mate, what do you think i should buy?" stuff. They explained about risk, the psychology of loosing/winning, the traps people fall into and how to avoid them.

Once you finish the course, you are assigned a trainer who will help you design your own system and he/she will assist you every time you want to add a new one or modify the original.

The beauty of system trading is that it takes about 20 mins a day to manage your investment so you can get on with your day to day.

It seemed a bit pricey at first, but i made that money back trading my system very quickly (luck, skill? i don't know). The company is called Hometrader, not a sales pitch, just an experience i had. Ive been using their education for the last 3 years and doing very well during this meltdown shorting CFDs (when they were available).

Happy trading.

[Trembling Hand]

I did a nice technical analysis course in Perth over the holidays. It taught me how to design and trade within a trading system that i was comfortable with. The system tells you what shares to buy, how many to buy, when to buy them, at what price etc, without all the, "hey mate, what do you think i should buy?" stuff. They explained about risk, the psychology of loosing/winning, the traps people fall into and how to avoid them.

Once you finish the course, you are assigned a trainer who will help you design your own system and he/she will assist you every time you want to add a new one or modify the original.

The beauty of system trading is that it takes about 20 mins a day to manage your investment so you can get on with your day to day.

It seemed a bit pricey at first, but i made that money back trading my system very quickly (luck, skill? i don't know). The company is called Hometrader, not a sales pitch, just an experience i had. Ive been using their education for the last 3 years and doing very well during this meltdown shorting CFDs (when they were available).

Happy trading.

Whats the % risk capital per trade?

What has price got to do with it:confused:

What gem did they offer about "psychology of loosing/winning"??