Beginner Asset Allocation Advice

sz1234 · 21 June 2016

Hi all,

First time poster here! I hope to start investing with approx $4-5k and I am not interested in day-trading, but rather focusing on fundamentals and holding only a few companies for the longer term (1-2+ years). I was wondering if anyone could point me in the right direction in terms of determining asset allocation across a portfolio of X number of shares. Let's say I've identified 4-5 promising investment opportunities; how do I determine how to allocate $4000 across these different companies?

Would also appreciate any general advice and starting tips on devising a (longer term) investment strategy

Thank you!

History Repeats · 23 June 2016

4-5k too little money to divide into 4 or 5 opportunities. An easy way to allocate x amount would be, x divide y the number of stock. Or you can put more percentage into the stocks you like the best.

tech/a · 24 June 2016

History Repeats said:
4-5k too little money to divide into 4 or 5 opportunities. An easy way to allocate x amount would be, x divide y the number of stock. Or you can put more percentage into the stocks you like the best.

Agree
If it was me I'd put the whole lot on one stock
But I'd place a 10% as a strict stop and be very happy if I get
A 20% return including dividends.

I'd also paper trade
With pretend portfolios of $10,$25,50,000
$5000 each member of the portfolio

While doing that I'd investigate what works and why.
Don't throw out the idea of shorter term trading.
The landscape has changed.
This is likely to see you studying Data analysis.
fundamental and don't dicsard technical study.

sz1234 · 24 June 2016

Thanks for the advice guys - will take that into account! Given my relative unfamiliarity, would it perhaps be a good idea to divide my capital across 1 ETF and perhaps only 1 company instead? Market performance does seem questionable at the moment given Brexit, so I am not sure how long-lasting these impacts will be :/

StockTrader010 · 22 July 2016

sz1234 said:
Hi all,

First time poster here! I hope to start investing with approx $4-5k and I am not interested in day-trading, but rather focusing on fundamentals and holding only a few companies for the longer term (1-2+ years). I was wondering if anyone could point me in the right direction in terms of determining asset allocation across a portfolio of X number of shares. Let's say I've identified 4-5 promising investment opportunities; how do I determine how to allocate $4000 across these different companies?

Would also appreciate any general advice and starting tips on devising a (longer term) investment strategy

Thank you!

Also keep in mind to not invest all your at once. You could end up buying at a peak and kill your returns. It is better to steadliy increase your stock market investment over time. You can adopt either a dollar-cost averaging or value-averaging approach. This way, you can benefit from potential returns without putting yourself in trouble.

Junior · 22 July 2016

A couple of ideas:

If you want to invest small amounts on a regular basis into a truly diversified portfolio, try an app like Acorns or Stockspot. They are designed for small portfolios and recurring investments.

If you are keen to pick individual stocks, I note that IG Markets are now offering online broking for only $8 per trade. Much cheaper than the likes of Commsec or eTrade.

Good luck.

levin123 · 22 July 2016

sz1234 said:
Hi all,

First time poster here! I hope to start investing with approx $4-5k and I am not interested in day-trading, but rather focusing on fundamentals and holding only a few companies for the longer term (1-2+ years). I was wondering if anyone could point me in the right direction in terms of determining asset allocation across a portfolio of X number of shares. Let's say I've identified 4-5 promising investment opportunities; how do I determine how to allocate $4000 across these different companies?

Would also appreciate any general advice and starting tips on devising a (longer term) investment strategy

Thank you!

I've had very similar problems to you in the past! It is really frustrating not being able to diversify your portfolio due to lack of capital.

I don't know your job situation etc, but what I would suggest is choosing one share you like per tech/a's suggestion. Once you've deployed your 5k, start putting aside $100 /week or fortnight, or however much you think you can afford. And while you do that, spend time learning about fundamental and technical analysis etc and hunt down your next stock.

At $100/week you'll have 4k in 10 months. It's certainly not ideal and feels like an awfully slow way to go about things but will get you there.

Beginner Asset Allocation Advice

sz1234

History Repeats

tech/a

No Ordinary Duck

sz1234

StockTrader010

Junior

levin123

Similar threads

Beginner Asset Allocation Advice

sz1234

History Repeats

tech/a

No Ordinary Duck

sz1234

StockTrader010

Junior

levin123

Similar threads

Privacy & Transparency

Privacy & Transparency