Help needed for beginner - Aussie Stock Forums

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  1. #1

    Default Help needed for beginner

    Hi Everyone,

    I am new to this forum and new to investing in general. I was lucky enough to purchase a property that has performed well during the boom (luck more than anything) and it has got me interested in property investing, and investing in general.

    I have decided that property is not the only investing tool for me and would like to learn more about the stock market.

    But as a beginner where do I begin. Managed fund, or LIC or shares direct.

    And what reading material would anyone suggest (if you had to start again how would you tackle it)



  2. #2

    Default Re: Help needed for beginner

    Welcome Dingo

    I would suggest that you start here and browse the forum.(Use the search function if you want something specific).

    Also try the ASX site: www.asx.com.au - plenty of good info there too.

    Ask specific questions - very friendly/helpful mob here.

    Good luck.

  3. #3
    Pigs In Space GreatPig's Avatar
    Join Date
    Jul 2004

    Default Re: Help needed for beginner


    In my opinion, if you want to spend the time to read up on share investing and study the market, then you should get best results with direct share investing, although that may include LICs. In my investment portfolio, I currently hold a few property and investment trusts which are generally doing quite well.

    As well as the ASX website, you could also take a look at Colin Nicholson's website and perhaps Alan Hull's website. Colin Nicholson has a few articles and things there without having to be a member, although not always that recent, and Alan Hull has his Active Investing course, which I've never done but have heard a few positive comments about. You can download some course notes and a sample newsletter from there.

    If you become interested in share trading, then there are heaps of books and websites on that, but less on just investing.


  4. #4

    Default Re: Help needed for beginner

    Quote Originally Posted by derekl
    Hi there everyone,
    You learn how to pick entry and exit signals by following set rules and guidelines and you don't enter a trade unless everything lines up,so all the evidence is in your favour and there is no guess work[/url]
    Absolutely. Don't enter a trade even if it looks right unless everything does line up with your system. That's my opinion anyway.

  5. #5

    Wink Re: Help needed for beginner


    I was exactly in your situation 12 months ago; it was really hard to work out what all this stock market stuff was all about.

    I found really useful books by Daryl Guppy and Leon Wilson; particularly "The Business of Share Trading".

    You have to make a decision on the amount of time you want to devote, as this will determine if you are compatible with trading (short term) or investing (long term).

    I choose trading.

    I have followed what some might class as the traditional path of looking for the magical system, but now realize its more about risk management and controlling the human psychology.

    If you need more pointers or lessons learnt happy to help.


  6. #6

    Default Re: Help needed for beginner

    Simply understand Expectancy.

    Learn what it is,how its derived and what your trading needs to be doing to attain it.
    Then QUANTIFY IT in your trading.
    If you dont know what your trading returns in expectancy then your gambling.
    Its a business treat it as one.

    Having a plan which gives you an entry exit and stop wont guarentee a successful trade, and highly unlikely to give you a successful string of trades,let alone years of trading.


  7. #7
    bullmarket's Avatar
    Join Date
    Dec 2005
    Looking over your right shoulder :)

    Default Re: Help needed for beginner

    Hi and welcome Dingo (btw, your first name isn't Ernie, is it ?? )

    Anyway, where the best place for you to start is hard to say atm without some info on what your objectives (eg..growth, income or more commonly a bit of both) and risk tolerances are (eg...will you trade/invest bluechips, speccies, a combo of each, any sector restrictions and/or just our market or global markets as well)

    It's not clear to me from your original post just how new you are to the stock market, but assuming you are very new then I'd suggest browsing around at least http://www.asx.com.au ,where there is heaps of really good info on how the stock market works and the different types of investments/securities available on the ASX, and the other sites suggested in other posts.

    I agree with GreatPig that direct shares should yield the best returns over time, compared to managed funds etc, provided you have the willingness and time to learn how the market works, what drives it and to do your own research and evaluations.

    One additional good read imo to the ones already mentioned in earlier posts is "Trading With a Plan" by Compton and Kendall. The principles and concepts it discusses, like risk management, position sizing, stop losses etc, are just as applicable whether you are a trader or investor imo.

    Finally, assuming your objectives are long term growth with a reasonable income (yield) with low risk and you have the time, knowledge and willingness to invest in direct shares then maybe consider starting with 5-6 'bluechips' from different sectors, to spread the risk, or maybe consider just sticking your toe in the water, so to speak, by investing in just 1 or a few managed funds that invest in various asset classes like Australian and overseas shares, property, bonds and cash to spread the risk.

    But as I mentioned earler, all of the above depends on what your objectives and risk tolerances are and to some extent the size of your investment capital, all of which is unclear to me from your post.

    But good luck and I hope this helps. If you have anymore queries or need more help on something, just post away and I'm sure someone will reply. This seems to be a pretty good forum.



  8. #8

    Default Re: Help needed for beginner

    Strongly agreed with tech's post. Get the numbers right THEN start trading with real money.

  9. #9

    Default Re: Help needed for beginner

    Thanks to everybody for there advice.

    Yes I am just a beginner and will have to start from the bottom and work out what I want to achieve from investing and the risks involved.
    I suppose the more confident you get the more risks (calculated of course) I will take.

    So thanks again for the web links and the books to read that is better information than just walking into a book story and being overwhelmed with all the glossy covers etc And of course I will be reading the posts on here.

    Cheers Dingo.

    P.s. no my name is not Ernie. But my surname is Chamberlain!

  10. #10

    Default Re: Help needed for beginner

    Hi Dingo,

    I found this very basic introduction to investment through a link conncted to the finsia (securities institute) website. I thought it may help you or others just starting out.
    Jesse Livermore
    Attached Files

  11. #11

    Default Re: Help needed for beginner


    I'm not plugging for Alan Hull only to tell you I bought his book "Active Investing" and was impressed by his approach. I decided then to pay for his weekly newsletter and stock picks (They are picked by stock doctor) and managed to get a 36% gain last year and am at about the 40% this year. My investment (business) plan is for a %20 profit. Although it is a boom Market his Philosophy is sound and it does reduce the number of stocks to look at.

    You do make your own decisions on what to buy he doesn't make recommendations

  12. #12

    Default Re: Help needed for beginner

    Develop your own style.
    Discussion only! Posts may be factually incorrect due to ignorance, taken out of context, misinterpreted, or just opinionated discussion.

  13. #13

    Default Re: Help needed for beginner

    Reading books and info on sites is an excellent way to learn trading. But I found doing a course gave me confidence to get a general overview, which then lead me to do further readings. I am an IT guy who did one of these course and was later asked to work for a Option Training company and help with processes and development of software to aid traders. If you are interested in option trading training, from beginner to expert, you can have a look at TradersCircle. These guys offer live training, as well as online seminars where you can talk the talk with the live presentor as well as other members. Hope this helps you get started...

  14. #14

    Default Re: Help needed for beginner

    i'm fairly new to shares trading myself. nonetheless i do find the following points to be a good guideline for myself (and hopefully for others as well):

    (1) always keep yourself informed of the current market trend (AFR is a good daily reading source)
    (2) define your own trading/investing objective(s)
    (3) understand your own risk profile (everyone is different here)
    (4) never stop learning (very important!)

    my 2cents worth.


  15. #15

    Default Re: Help needed for beginner

    I like 3 and 4

    Understand your risk profile. Being risk averse may just save you much grief.

    Keap learning! I`ve read many books and keep buying more....
    Discussion only! Posts may be factually incorrect due to ignorance, taken out of context, misinterpreted, or just opinionated discussion.

  16. #16

    Default Beginner here...

    hi I am new to the shares thing and my husbands and my plan is to trade shares for cash flow. At the moment we have 4 IP and we need more servicability to get more properties, and shares seems a good way to go about it.

    I have been trying to read thses forums and I have bought an investor magazine, but I cant for the life of me understand most of what they are talking about or the definitions they use! I am a beginner beginner, like, right at the start.

    Does it all just come to you over a matter of time and reading?

    I have gathered that research is the key. And then some more research. I understand this may take a while and that is ok.

    So is there a trading shares book for dummies or somehting along that line, website etc etc. I have searched on this forum for a list of definitions but I cant find anything.

    Thanks in advance


  17. #17

    Default Re: Beginner here...


    As regards an investment "dictionary" so to speak, you can try this link;


    Does it all just come to you over a matter of time and reading?
    It can very much depend on what you read.
    There are three distinct philosophies;
    Technical Analysis
    Fundamental Analysis
    Quantitative Analysis

    All three have their supporters and detractors, but your first step will be to decide which philosophy agrees with your psychology, and then define the methodology within your choice.
    The financial markets are far more complicated than the property market, as you will no doubt find out for yourself.

    I understand this may take a while and that is ok.
    Your first goal is to survive the first two years.
    Then, look at starting to become profitable, this may take another year.
    Then it's all gravy.

    best of luck, although luck has nothing to do with it.
    jog on

  18. #18
    Not a scaredy cat anymore Prospector's Avatar
    Join Date
    Jan 2006

    Default Re: Beginner here...

    Hello newbie

    Funny you should ask about a share book for dummies - there is one, and it really us very helpful in giving you the basics. I bought it maybe two years ago and have since loaned it to lots of people. It is the yellow/black style dummy book and I bought mine from Borders.

    I would suggest you read that book first and go from there

    Good luck

  19. #19
    bullmarket's Avatar
    Join Date
    Dec 2005
    Looking over your right shoulder :)

    Default Re: Beginner here...

    Hi sandrandave and welcome

    The ASX site www.asx.com.au is a gold mine of information imo for newbies and also for those that have been around for a while.

    If you come across a term you don't understand maybe try the Glossary of Terms page on the ASX site.

    The ASX site also has heaps of info on how the market works in general and it also has some good FREE online courses you can do if you like.

    Maybe as a starting point just have a surf around the ASX site.

    As far as reading material goes, I think "Trading With a Plan" by Compton and Kendall is a very good read for both traders and investors.

    If you are interested in charting/technical analysis then a good starting point imo is "Trading on the Australian Stock Market: A Beginner's Guide" by Thorton is a good starting point and then books from any reputable authors like Bedford, Tate, Guppy etc are all good reads.

    I find this a pretty good site as well. If you have any more queries or need a second opinion on anything, just post away and someone usually resplonds pretty quickly.



  20. #20

    Default Re: Beginner here...

    Sandra you have to make a decision if want to be a short term (trader) or long term (investor).

    Short term requires more work, and in my opinion provides better return and more consistent cash flow.

    I was in your position Oct last year and read and read and then natural found that I preferred technical analysis; although it took me a while not to be an emotive trader.

    I use a LOC to leverage the equity in my properties..

    To me its all about risk management, which is the core of my day job. So I found a natural affiliation with this approach.

    So I would suggest reading some books on trading “Business of Share Trading” by Leon Wilson or “Share Trading” Daryl Guppy I found very good.

    Then ask lots of questions;

    Invest in good software packages (I use Ozzie products Bullcharts (charting), Tradesim (backtesting), Stator(System and postion mngt) and Quicken (financial mngt)). With Tradesim you can backtest a system to ascertain how it would have performed..

    Paper trade a bit, to refine a system and don’t over do the analysis bit.


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