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Investments
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| echosystm |
Hi,
Don't reply if you don't know anything please.
In 2 years (when I finish uni), I'm going to be looking to buy my first cheap property. By that point, I will have about $30,000 (+$7,000 first home owner grant) for a downpayment. Obviously, I need somewhere to live, first and foremost. Rather than sink all my money into a house, my plan is to buy a cheap apartment. This way I can pay it off quickly and avoid paying massive interest, then focus on assets that will actually produce income for me.
In the mean time, I am looking into alternative things to do with my money. At the moment, I only have about $10,000, but I would like to do something with it. If I put this into a typical savings account, I'll get 7-8% p.a. with basically no risk. Is it worthwhile looking into shares? Is it worth the effort of devising my own portfolio, or should I just dump my money in a securities index or managed fund?
For the future... is real estate or stocks the better investment, in general? A few considerations:
- We have tax imputation in Australia
- I'd have to take loans for real estate ($interest!), whereas I can just use idle funds in shares
- I'm pretty risk averse
- I cbf watching stocks for 4 hours a day
Cheers. |
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| Beat Blog |
If you're wanting to invest long term (5+ years), buy shares now, because the Australian market is extremely low, and you will be in a position to make a good profit when it eventually bounces back.
If you are looking for a short term return (18 months or so), put your money in a high-return interest account.
So, yeah, I'd go with an interest account.
Shares could pay off within two years, but if this is your first investment it's probably not worth the risk. |
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| nchs09 |
| Usually economics or business professors in the university have good advice on what to invest in. |
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| jonSun |
| Oil is down right now but back in May/June i made a lil over $2000 in 2 months time on oil. Silver is also low right now. |
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| pkcRAISTLIN |
| quote: | Originally posted by Beat Blog
If you're wanting to invest long term (5+ years), buy shares now, |
pretty much.
managed funds, they've taken a hiding recently. i prefer to trust my own judgement when investing my money. if i had the spare cash id be buying bank and mining stocks like they were going out of fashion. alas im mortgaged up to the hilt so no more spending for me... |
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| Krypton |
| quote: | Originally posted by echosystm
Hi,
Don't reply if you don't know anything please.
In 2 years (when I finish uni), I'm going to be looking to buy my first cheap property. By that point, I will have about $30,000 (+$7,000 first home owner grant) for a downpayment. Obviously, I need somewhere to live, first and foremost. Rather than sink all my money into a house, my plan is to buy a cheap apartment. This way I can pay it off quickly and avoid paying massive interest, then focus on assets that will actually produce income for me.
In the mean time, I am looking into alternative things to do with my money. At the moment, I only have about $10,000, but I would like to do something with it. If I put this into a typical savings account, I'll get 7-8% p.a. with basically no risk. Is it worthwhile looking into shares? Is it worth the effort of devising my own portfolio, or should I just dump my money in a securities index or managed fund?
Cheers. |
Check out the Tranceaddict Investment Club (CLICK). We can help you out..
It really depends on your investment objective. Are you looking for capital appreciation, or capital preservation. This is what you should do, according to your investment objection...
Capital Appreciation: If your objective is to increase the value of your capital, then I suggest you invest this capital in higher return assets, most notably stocks. If you decide to invest in stocks, I suggest you refrain from any speculating. Don't invest on a gut feeling. I suggest you invest in stocks whose business is excellent and with the financial results to prove it. When you buy the company, you should be buying it at a low price. I suggest the stock should also pay a dependable and increasing dividend. If you need help with any of this, I have a specialization in stock analysis, and I can help you greatly.
Capital Preservation: If your objective is to preserve your capital while still receiving a return higher than the prevailing inflation rate, then I suggest buying treasury bonds of Australia or the United States (www.treasurydirect.gov). You could also buy a Certificate of Deposit or a high yield money market saving account.
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In whatever you do, if you don't know what you're doing, you shouldn't be doing, b/c it'll cost you money. A lot of people ask me what I think about stock before they buy, because I design, develop, and maintain financial algorithm models, which I use for my stock analysis, and basically tells me the financial quality of the stock's underlying business, and how much the business itself it worth. It's like before you buy a car, you want to make sure the car is in tip top shape. You want good tires, engine, paint, etc. You also want to know how much that car is worth before you buy it, so you know you won't be paying a high price for it. The same thing applies to the stock market, and I use sophisticated mathematics to gauge these qualities and values..;) |
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| echosystm |
| quote: | Originally posted by pkcRAISTLIN
if i had the spare cash id be buying bank |
do you think the finance sector can go any lower? the value of a lot of banks is still "ok", compared to ~2003ish. If we're headed for a bit of a recession, won't banks be the first to take a decent bit of rape? |
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| know you |
| quote: | Originally posted by echosystm
do you think the finance sector can go any lower? the value of a lot of banks is still relatively high, compared to ~2003ish. If we're headed for a bit of a recession, won't banks be the first to take a decent bit of rape? |
It's knowing which ones are going to come out of it alive more than anything.
Frankly I feel that investment in the financial sector, at least in the US (might be different in Australia) is too risky right now. We are still on the downward slope. Better to keep a keen eye on the sector and wait for the first signs of an uptick, that way you know who to invest in and you wont be in as much risk as if you do when things are still sliding down hill. |
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| pkcRAISTLIN |
| quote: | Originally posted by echosystm
do you think the finance sector can go any lower? the value of a lot of banks is still relatively high, compared to ~2003ish. If we're headed for a bit of a recession, won't banks be the first to take a decent bit of rape? |
It all comes down to how long youre looking. Whilst the banking sector is taking a battering, the aussie banks are still posting pretty hefty profits and dividend payments. If I had some liquid I would have no hesitation in sinking the lot into 2-3 of the big banks.
Im certainly no market analyst or expert, so I cant really say how the banks are gonna be in the short term.
And considering that india and china show no chance of slowing any time soon, I reckon that BHP and rio tinto are well worth their hefty share prices.
Honestly, you cant lose with blue chip stocks. If the market takes a battering, you just ride it out. Only idiots dump stock less than they paid for it, and its not like rio tinto or CBA are gonna go out of business. Id buy now, and if I hadnt seen a decent return in 2 years, id just wait a little longer.
Personally I have favoured property, because that way I can get a bank to lend me hundreds of thousands of dollars to invest which they wouldnt have given me otherwise. |
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| pkcRAISTLIN |
| quote: | Originally posted by know you
It's knowing which ones are going to come out of it alive more than anything.
Frankly I feel that investment in the financial sector, at least in the US (might be different in Australia) is too risky right now. We are still on the downward slope. Better to keep a keen eye on the sector and wait for the first signs of an uptick, that way you know who to invest in and you wont be in as much risk as if you do when things are still sliding down hill. |
its way different in australia. we realise that markets need regulation which is why our banks, whilst doing it tough, are in a far better position than the US banks. |
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| Krypton |
Here is a list of stocks you might be interested in. No financials here unfortunately. If you want to speculate on a financial, I'de look at GKK, which is a property management, mortgage, and loan company that I believe will survive the current financial crunch. For being in the sector its in, it still is making a profit and increased revenue all the way through the sub-prime collapse.
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| Beat Blog |
| quote: | Originally posted by Krypton
Here is a list of stocks you might be interested in. No financials here unfortunately. If you want to speculate on a financial, I'de look at GKK, which is a property management, mortgage, and loan company that I believe will survive the current financial crunch. For being in the sector its in, it still is making a profit and increased revenue all the way through the sub-prime collapse. |
Uh...this is the Australian share market we are talking about.
Echo, if you decide to buy bank shares, go Westpac. I bought some back in October for $30 a pop, and they have since plunged to $19, but are back up to $24 today. They are the only bank who seems to be doing okay at the moment, and the almost certain merger with St. George is likely to do wonders with them.
Just remember that earnings on shares in Australia are taxed at 50% if you own them for a year or less, and 25% for more than a year. |
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