Stock Market Newbee

[ajackett110]

Hey guys...

Just a newbee to the stock market... 19yo

Have a couple of grand saved up which I want to make a few quid out of. Looking to invest about $1000. Just want to know a few things about the ASX

Firstly, is the stock market as simple as, for example, buy 1000 shares at 10c ($100) today, and say if they reach 12c three days later, sell them all and get the $20 profit ($120)? I know that long term investors receive dividends, but I'm really only looking to the short-term for the moment anyway.

Ummm... I have a couple more things i need to know, but will post those later.

Any help now would be great.

Cheers!

 

[ajackett110]

Oh, and how do you know how much you can buy and sell for?

Oh yeah, what fees are involved in buying and selling? Like broker fees? And how much are they?

Oh, and is it good to go for companies which have just had a decline, but have had high prices in the past?

 

[dus]

Best thing to do would be set up an online broking account, westpac broking, commsec ect.. Fees for every transaction (buy or sell) is about $28. Much cheaper than going to a broker, but with out the advice/opinion.

Create a watchlist and watch the share price for companies/sectors you are interested in.

Sounds like you are interested in short term/speculative plays. If you are putting in $1000, and paying $28 brokerage, it works out to be 2.8%. That is, the shares then have to rise by 2.8% just to break even.

Also, going by your example, if you bought $100 @ 10c, then sold for 12c. $20 profit, of which CGT (capital gains tax) applies (50% i think) in addittion to brokerage.

 

[Frodo]

Originally posted by ajackett110
Hey guys...

Just a newbee to the stock market... 19yo

Have a couple of grand saved up which I want to make a few quid out of. Looking to invest about $1000. Just want to know a few things about the ASX

Firstly, is the stock market as simple as, for example, buy 1000 shares at 10c ($100) today, and say if they reach 12c three days later, sell them all and get the $20 profit ($120)? I know that long term investors receive dividends, but I'm really only looking to the short-term for the moment anyway.

Ummm... I have a couple more things i need to know, but will post those later.

Any help now would be great.

Cheers!

Forget the sharemarket until you have at least $3000 to invest. Brokerage will kill your investment.

For info.

Yep, you can buy at 10c and sell at 12c a minute later if you want, but you have to be lucky to make 20% quickly and in your scenario your $100 buy would nett $80.10 withh commsec. So you would lose despite a 20% share price increase.
By short term you mean you want to gamble. I don't recommend that. Most gamblers lose.

Most companies that decline stay down or go further down. Some rebound. You need to research the company and make a valued judgement. I made a big play on Chemeq this week. I think they have a good team, product and strategy and that they will rebound, but I could be wrong and lose a lot. But that's the type of value judgements you have to make to earn money day trading. And I've been wrong many times. So what chance does a person have who doesn't do the research?

 

[lenny&carl]

If you don't know much about the whole game, plus you're setting out to make bucks fast, then you really are more likely to lose than to win. So I would say don't do it. But if you're really interested in the markets, then you have to set out to learn learn learn. One very effective and popular way to learn is to lose lots of money; but it's not cost effective.

 

[jezza]

First off, go and read some books, lot's of them. First stop should be the library. A few good ones I've read are by Darryl Guppy and Leon Wilson (can't remember the exact names but you'll be able to find them). These books have lots of good info for starting out, mostly along the lines of getting you to ask yourself whether you have what it takes to make it trading. These books will teach you all about stock selection, risk management and money management. Note they are based on technical analysis as opposed to fundamental analysis, as these are the techniques the authors have used to get rich. One of the key themes is that you will have to dedicate a fair bit of time to trading to make it work, if you can't commit the time, and you value doing other things ahead of trading, you are better off not getting into it. One of the main reasons people fail at trading (and the reason it is generally seen as so high risk) is that people think they can make millions only spending a couple of hours a week at it.

If that's all the money you have to start out, you are better off investing, as opposed to trading, until you have enough to make it work. In the mean time, keep researching and start paper trading, ie come up with a trading plan and follow it through making trades but not actually putting any money on the line. Paper trading is a great way to test your techniques and refine them until you are happy that you can actually risk your hard earned money.