I have recently decided to start actively investing in the share market. I figure after the GFC hit in 08/09 now is a good time to get into the market to realize the maximum gains in the hopefully prosperous years to come. I have been passively invested in the share market since getting a bundle of 1475 shares in NHC in December 06 which my dad's broker recommended. I have seen these shares grow from being $1.30 when I got them, reaching a peak of about $5.80 before the 77c dividend hit last year and settling down to its current value of $4.48 (75% capital growth p/a without reinvesting dividends). The dividends alone have almost equaled the $2000 I spent initially and the capital gains are straight profit! This experience left a good taste in my mouth so I want to start trading more actively.
Here's the lowdown - I'm 23 years old - almost 24. I live in Sydney, work in the CBD and rent in Lane Cove. I have no debt. Obviously being so young I am free to take on a higher than average level of risk, as I don't have any debts/liabilities/dependents and have plenty of working years ahead of me.
I have read a book called 'Building Wealth in the Stock Market' by Colin Nicholson. This book was suggested by a user on this forum and is a great book. I am currently reading the book 'Online Investing on the Australian Share Market' by Roger Kinsky, which is also quite a good book which will hopefully give me more of a general overview of the Australian share market.
Everything I have read has said that it's important to create an investment plan before putting any money into the market. I have made one which I devised loosely based on the one provided by Colin Nicholson in his book. As I am still learning, and don't really know a lot about TA I am keeping it fairly simple at the moment and sticking with stuff that I know. After I have learned more I'm sure I will revise the plan to take into account my new knowledge. I know there will be a learning period where I will probably loose money, but if I get it out of the way while I am young then in a few years time hopefully I will have the knowledge and experience to start realizing meaningful profits.
Anyway, my investment plan is attached in PDF format. Your comments/suggestions will be greatly appreciated! There may be stuff in there that conflicts, such as aiming for a 13.3% p/a return or not buying stocks with a Debt/Equity ratio over 60, but aiming for medium to high-risk stocks. This is just carry over from Colin's Investment Plan which would have less risk built into it then I am able to take. I will adjust these things once I learn more about safe ways to choose medium to high-risk stocks, but for the mean time I will just go with what I know.