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Investing in the Stock Market (pg. 7)
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| metalgearsolid |
| quote: | Originally posted by Choobak
I'm looking at your positions and was wondering how much you are paying for trades. If you are paying $10/trade, I don't understand why you would open up small positions like the ones you have in JAX and SMXC. Your trading costs on the JAX trade alone mean you're not going to see profit on that trade unless the stock gains 50%. On your SMXC trade you won't see profits until the stock gains 6%.
I pay $10/trade myself and I generally don't enter equity positions smaller than $1500. |
heh, I felt like wasting money. Yeah, JAX wont go anywhere but SMXC already has done a lot for me. Its the only stock that has been giving me gains. |
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| Shakka |
| quote: | Originally posted by Choobak
I'm looking at your positions and was wondering how much you are paying for trades. If you are paying $10/trade, I don't understand why you would open up small positions like the ones you have in JAX and SMXC. Your trading costs on the JAX trade alone mean you're not going to see profit on that trade unless the stock gains 50%. On your SMXC trade you won't see profits until the stock gains 6%.
I pay $10/trade myself and I generally don't enter equity positions smaller than $1500. |
That's the problem with trying to actively trade with limited funds. You should just find a good diversified mutual fund and let it grow. Without enough capital at work for you, it's difficult to actively play the market given the cost of trading. Even if I buy 50 shares of something, it costs me $20 to do the trade--on both ends, so effectively, my cost becomes $1/share, making it a bit tougher to realize a significant return. That doesn't mean you can't still be wise with your money, though. |
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| Dupz |
| quote: | Originally posted by Choobak
I'd like to point out that if you bought a house for $37,000 30 years ago and it's worth $350,000 now, your annual rate of return for the house was about 7.75% - below the annual total rate of return of the S&P500 in the same time period which was about 10%. And if you think that's a small difference, you'd have about $600,000 today if you had put your money in the market - thanks to the power of compounding.
$600,000 > $350,000
stock market > property
In addition, you'd have been paying property taxes on the house along with a capital gains tax if you were to sell it, which would be more than the capital gains and dividend taxes that you'd have paid on your stock market investment. |
Amen to that! The Aussie stock market is to thank for my new car in the garage :)
I dont have shares at the moment. I need a little bit of liquidity (i'm getting 6.4% p.a. with the likes of BankWest and ING Direct anyway), but I've got a few speculative tips (in no particular order):
WBC - Westpac Banking Corporation... If you're going to invest in one of the big banks, this is the one to be in over the next couple of years.
JBH - JB Hi-fi... Everyone's favourite retail store has gone ape- over the last few months. Tax cuts and strong outlooks have made the price skyrocket in the last few weeks, but I'd say theres plenty of potential left.
TAP - Tap Oil... Volatile resources. Good for a quick buck.
PDN - Paladin Resources... 3000% odd return over the last decade, need I say more? Prospective uranium deals could be big in the next few years. Keep an eye.
RORM - "Rest of Resources Market"... get into anything resources people :) I probably wouldnt leave money in there without keeping an eye on things, but demand from China and India should drive the market for at least a few more decent quarters.
If shares dont tickle your bunghole, stick with listed or commercial property. The housing market is rat on the eastern seaboard. Steer well clear of Sydney (!!), Melbourne and Brisbane. Hobart if you have to. Perth and Darwin are still doing well, but are possibly over-priced, thanks to the resource boom.
If domestic housing is a must and you need something in the eastern states - go for the "tree change". My tip is that inland 'weekend' type properties will catch up in value with their coastal and urban counterparts. Places in Victoria like the Murray-Ovens region are stunningly beautiful, and relatively cheap. Towns along the Murray River are starting to come good too.
So many investment choice, so little money. |
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| Choobak |
| The last few days have been pretty brutal for the US markets. I smell a buying opportunity approaching... |
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| Purple |
| quote: | Originally posted by Choobak
The last few days have been pretty brutal for the US markets. I smell a buying opportunity approaching... |
US Dollar had been falling like rock for last two weeks.
Today its has made a reversal signal. |
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| Choobak |
Is anyone investing in large cap consumer staples companies? Since mid 2004, I have been tucking away the majority of my retirement portfolio stocks of those companies: Diageo (DEO), Altria (MO), Nestle (NSRGY), Cadbury (CSG), Colgate (CL). While they haven't been blowing away the market, they've been producing steady above the market returns while paying out nice dividends. Even better, the sector is very defensive, so if this little correction turns into a full blown recession, they shouldn't suffer too big a decline. Remember, when things get bad, people drink (DEO) and smoke (MO) more...
Anyone else like this stuff? |
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| Shakka |
| quote: | Originally posted by Choobak
Is anyone investing in large cap consumer staples companies? Since mid 2004, I have been tucking away the majority of my retirement portfolio stocks of those companies: Diageo (DEO), Altria (MO), Nestle (NSRGY), Cadbury (CSG), Colgate (CL). While they haven't been blowing away the market, they've been producing steady above the market returns while paying out nice dividends. Even better, the sector is very defensive, so if this little correction turns into a full blown recession, they shouldn't suffer too big a decline. Remember, when things get bad, people drink (DEO) and smoke (MO) more...
Anyone else like this stuff? |
Sure. You could always throw your money into the Vice Fund. They focus on guns, smokes, alcohol and gambling. VICEX. Theoretically somewhat defensive. |
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| metalgearsolid |
Did you know that if you invest $97 a month at the age of 23 in a mutual fund you will have a million when you turn 67? Its a fact. Now, if you start early like at 20 and put 1,500 into a fund imagine when you will have that first million and than imagine what you can do with that one million. I lost 1,100 dollars in the stock market so fund I want to get a job so I can put my money into a growth fund and dow index fund.
Shakke do you know what would be the quotes for that? |
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| Purple |
| quote: | Originally posted by Purple
US Dollar had been falling like rock for last two weeks.
Today its has made a reversal signal. |
Time for update:
Since that post USD made a good recovery (thanks to fake fudged data), it has again started falling last week after bad numbers from US, this month is crucial, Feds cant just keep on raising rates forever to fight inflation. USD has reached a crucial level (atleast in speculation terms). Either a big fall or a nicer longer recovery from here.
:tongue3 |
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| Shakka |
| quote: | Originally posted by metalgearsolid
Did you know that if you invest $97 a month at the age of 23 in a mutual fund you will have a million when you turn 67? Its a fact. |
Assuming that mutual fund consistently produces returns which mirror this historical performance of the overall market, returning ~10-12% per year for that entire period. But yes, the more money you can put in earlier in the game, the more the power of compounding interest can make your meager pile of dough into something substantial by the time you retire. No returns are guaranteed, however.
| quote: | I lost 1,100 dollars in the stock market so fund I want to get a job so I can put my money into a growth fund and dow index fund.
Shakke do you know what would be the quotes for that? |
Sure--which index fund? There are more and more of them popping up all the time. You can buy "Diamonds" (DIA), which try to mirror the DOW Jones Industrial Index. You can buy "Spiders" (SPY) which mirror the broad S&P 500 Index. You could buy "Quad Q's" (QQQQ) which mirror the Nasdaq 100 tech stocks, or you could buy a Russell ETF (IWM) which corellates more with the Russell Small-Cap Index (smaller, riskier, potentially higher growth companies). Outside of that there are literally dozens of other possible ETFs that focus on a wide range of industries, geographies, or other parameters you may be looking for.
If all you want is to own an index fund that generally mirrors the broader market, SPY is probably a good safe bet. (Oh--and these ETFs generally pay dividends that are comensurate with whatever the underlying stocks pay out, which is nice too). |
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| metalgearsolid |
| Shakka what about a precious metal fund? |
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| Shakka |
| quote: | Originally posted by metalgearsolid
Shakka what about a precious metal fund? |
What kind of metal? GLD for gold. SLV for silver. There may be some others that are more broad based. |
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