buy a house(s).

Hi There Bodie,

I have had quite a bit of experience in the financial planning field (not as an adviser) but working closely with 5 advisers in a financial planning/stockbroking firm here in Perth. I have been out of the industry for coming on 3 years (am now studying Law). I have also invested myself in a number of types of securities including Direct Shares, Self Funded Installment Warrants and also Managed Funds. Please see disclaimer at the end of this email prior to reading the rest of this post.

 Firstly, the people that you have been speaking to are correct. You have to work out how long you want to be in the market for. Do you want to get in and out quickley and take your profit/loss or are you there for the long term to increase the value of your investment over time? You state that you want to have a 5 year plan.

 The next thing that ties in with this is you need to work out the amount that you want to invest, and whether it is a lump sum or whether you are going to put in a smaller amount and then at later dates put more in.

 Furthermore you need to establish you 'risk profile' ie the amount of risk that you are willing to be exposed to.  This ties in with your timeline because if things turn pear-shaped and you want to exit from the market to take what you have left (or perhaps you might need the money urgently) you might have to part from the market with a loss. The question is, what type of loss are you willing to accept?

I would suggest working out these above issues and once you have come to a conclusion of where you stand, then based on that, you form a portfolio. You also have to work out whether you are more concerned with the shares going up in price, or whether you are investing to receive the dividends (yield) from the stocks. For example it is common in retired couples not to want to expose their investment to high risk therefore they invest in blue-chip shares (normally the banks, CBA, WBC, NAB) which pay the higher dividends but take longer to go up in share price. On this note, before investing in a share you should check to see when the dividend is payable and it's "ex" date which is the date that the cut-off is for the dividend. It is usual for the shares to go up in price temporarily prior to the dividend ex-date and is often a way to get caught in buying the share at too high a price.

5 years is not really a long-term investment - it is more medium term. I would probably look at investing in blue-chip shares (on the safer side). Providing you invest well, you probably won't double your money, but will most likely do better than what the bank is offering at the moment. Be careful and research FULLY what you are investing in, why you are investing in it, and what you expect from the investment BEFORE putting any money in. go to www.asx.com.au and read the company announcements of each company you plan to invest in and make sure you understand the general trends in the marketplace.

 I would even go so far as to say, watch the market for 3 months, keep a record of what the market is doing, and only then place your funds. Consult with you adviser and be fully honest with them about your financial situation. The more info you give them the fuller the picture they have and the better the advice they can give you. Stay clear of stock-brokers as they are only interested in buying and selling your stocks (they make their money on brokerage).

 Hope that helps you at the beginning.

Dannyg

Disclaimer: All views expressed in this post are only views and opinions and are not be considered as financial or any other sort of advice. The poster (Dannyg) takes no liability for any events as a result of the information posted.

Hence the disclaimer ???

Presently the market is up and down like a whore's drawers and has been for three months   - property far more likely to result in a better result in my view

i agree, housing will turn a good return int he next 24 months.

However with current investments i am quite high on my borrowing capacity, so making it hard.

However i do have disposable income which i would like to use for further investments.

Thanks

Bodie

Yes, I have done FSR training - and the disclaimer is due to not being able to give advice due to not completing FNA nor giving SOA.

and disposable income, pay down your debts. That will give you a better return than any investment. Even if you stuff money into a term deposit, the best you'll get is around 6% and you'll be paying that or more on your mortgage. And the volatile share market is a longer term investment than you are eyeballing.

PersonallyI'd be plowing any extra into debt retirement. Especially if you wanna have kids, get ahead on that mortgage so you can still service it on a lower income with the missus not working. Build up a buffer.

Bodie i would follow huggie and work away your debt  and then i would go into property, shares will vary up and down and when you want to trade them you will hope that there up, property , yes is a bigger initial outlay, you can borrow against it and when the time comes to sell you can be assured to at least get your money back if not more,    the other good thing when your kids grow up you can move them into the investment place to ensure they leave home, cash in later and buy a bigger boat

Ive already got a property port folio, and am looking to expand and diverserify. Current borowings are very high due to property investments which are tax deductable, so no need to help reduce these.

I bought about $20,000 worth of shares over the years which bottomed out at about $3,000 but are now worth about $12,000 so I won't bother giving you any advice appart from good idea getting someone involved who knows what they are doing.  Just wish I had of doubled my stocks at the bottom out.

Similar situation to you Bodie, the missus and myself have dropped some cash into shares with about a 1/4 being short term options and the rest 'blue chip'

So far so good, took a hit on some shares but another lot have had a massive rise since buying. All about knowing when to pull the pin to get your profits I suppose, educated gambling mate. We have been lucky to get good advice from father in law who is now semi retired and plays it for his spending money and doing well. Do you have the time to keep an eye on the markets during the day?? 

Bodie, If you do like myself and put money into the right shares and forget about it in the long term you will benefit. People told me not to invest in CBA 12 years ago but I did and they have tripled in value. KEY POINT:Put money in and forget until required

Brad

Key point being right shares Brad and that idea is probably going to work with blue chip IMO. However say you invested in Rio for example and found that you were up shit creek during the last GFC and went to offload some shares then its not going to be pretty.

DannyG has some good advice there, all about what you want out of it with a timeframe eg. missus off work to have tiddly winks etc.

Good luck 

If you've got equity in your investment properties you could always use it to secure a loan/line of credit and then buy shares, using your disposable income to pay for the interest.

There have been big gains in the market in the last 6-12months; I suspect the gains from here will be much more modest... best of luck! we all have to finance this addiction to fishing somehow 

a simple thing i was told when getting in, only risk what you're willing to lose.

The ASX site has a place where you can sign up for free and set up a watchlist, it's easier to track than through a news paper and you get all the announcements on hand.

I feel it's still a good time to invest in stocks as they haven't got back to their pre GFC levels. look into blue chips and safe stocks, otherwise personanlly look in Natural Gas compainies, especially those over east with the coal seam gas deposits looking to come on line, Santos is another good one, Woodside is pricey but will hit all time highs in 18 months for sure and will see the stock almost double.

Iron ore juniors in the pilbara like altas iron, australiasian resources even fortescue metals as they are around $4 are a good buy, they are all starting to work together to get thier projects off the ground and ship their ore.

To be honest my portfolio is not healthy, we had cash lying around and invested around $7k which isn't much and we took some hits when it all went bad but it was money burning holes in our pockets and we thought why not so yes we are down on our inititial investment but my Woodside shares have saved me to come out in front but i have a fair whack of them thanks to salary sacrifice.

Again this is not professional advice and should not be taken as so, you asked and i placed my experiences and what i'd do, i am currently doing the opposite and getting into some houses in SE Queensland.

Hi Ya,

If you want to go investing, look very seriously at the housing market in the USA.  There are a number of buyers agents and advisers in Australia that are set up to do the hard work for you.  Currently I am making some enquiries about options to purchase mortagee sale housing.  One particularly I am aware of in Atlanta Georgia is a 2 story 3 bed 2 bathroom house built in 2005.  It was recently purchsed $US45,000.  In 2006 it sold for $350,000.  Buy it now for $45K, collect in excess of $1300 per month rent now(remember that's US dollars so as the economy of the US improves and the Aussie dollar weakens, that means more and more Aussie dollars in the bank without a  rent increase!), borrow money in the US to purchase it at almost 0% interest, hang on for 4 or 5 years and make a killing when you sell it.  There are a few things you have to do to be able to buy but that's neither here nor there.

 Cheers.

mmmm I love the sound of *jingle* mail, the start of the global financial crisis.  Most of those houses are either encumbered, in places you dont want them...further more exchange rates fluctuate, i can just see some Aussies getting caught out when the exchange rates change and all of a sudden their mortgage rates go through the roof....be very careful

Hi Bodie,
As a person in a similar age group with you and with similar interests, I hope I can offer something useful. It is my belief that these general tips will help you more than some whisper or rumour in the market. You need to be wary of those.

1) To start with, don't bother about anything but blue chips. Stability is a good thing.

2) Accept the fact that you will NEVER strike selling at its highest peak, and NEVER strike buying at its lowest point. Buy and sell wisely but fear and greed always leads to trouble...

3) Once you've bought, don't check it every day. Someone's summed it up well by saying 'forget about it' - at least maybe for all but a day every month for a quick peek.

5) Finally, and what I think would be the most valuable advise anyone could give: read widely and read wisely.

Also, have a look here - https://www.belldirect.com.au/
It was a very useful tool while I was living in Aus.

The last two years were interesting times.

How'd you go with this Bodie?

Btw, anyone got any hot tips for the market at the moment? I just missed out on JAL at .09 a few weeks back, spewing. ;(

Didnt get into the share market at that stage. Did a  lot of research tho.

However have a good tip on  a company which is going to be floated in October in the US. Just have to work out how to buy shares on the NY stock exchange!

is-if you are offered shares or "hot tips" by a broker, you dont want them. A broker isnt going to give his "hot tips" to somebody buying $2K worth. Generally its cos one of their bigger clients is getting out.

Every broker has a vested interest one way or another. If nothing else its to get you to buy or sell something, its the only way he (legally) makes money.

read up a bit on Marcus Padley's columns, good reading and good general advice.

won't help you Brodie, we have our super in CBA in mid to low risk, didn't lose much on the Global down turn, the CBA has good advise and if we had pulled our super out and put it in a 6.5% fixed term, we would have lost most of our pension, when we turn 65yrs of age will have to look at taking some out as well, as the aged pension will decrease.  Things like this peeve me off, you save for retirement, do it all legal, and still get hit in the guts.  We have to be a little bit on the sly side before we turn 65,  to get the full aged pensions, as trying to keep assets  under $900,00 for a married couple.  Go over that and won't qualfy for the aged pension or get part there of, no health care card.

Also think of this for your old age, where and when you are going to stash money also in super or investments, do you want to be on the old age pension as well, or self funded retiree?  Its a long way off, but good retiremant plan also, as when some of you younger ones look to retiring their mightn't be a old age pension.

If you are going to invest in the sharemarket, you have to be prepared to watch what the market is doing...whether you are an investor or a trader.

Ideally, we all want to buy low and sell high, or buy high and sell higher...and whether you are buying 'blue chips' or speculative stocks, if you can't watch what they are doing, be careful about holding them.

You must establish a set of trading rules before you start..and stick to them. If you can't do that, you might be better off putting your money into a term deposit or some other investment vehicle.

On any given day, a trade can go against you and if you get stopped out of a trade, due to the price falling to a point where your maximum risk has been reached, then you sell....rules are rules.

I can't see the point of holding a blue chip stock, only to watch it's share price fall 20%, 30%, or more....it might not recover from a slump for years; the dividend isn't going to make up for a loss of share price....just ask the mum and dad investors who were told to buy Telstra at $4.70....current price is around $3

I actively trade the market and any trade can last anywhere from 30 mins to 30 days, depending on what the price is doing....if it's going up, I stay in, but if it drops below my stop loss point (based on risk $$$), I'm out. 

Anyway, these are just my thoughts and in no way should they be seen as advice of any sort. What works for me, might not work for others, and that's ok....what works for others, might not interest me. The aim is to make money and we all have different ways of achieving that. 

regards
rusty...

PS. Adam, do you still see JAL as a trade, even though it's risen from 9c to 16c????

Looked at offloading to pay for our 'wants' with the new house build & lets say I would rather be buying in right now so the trigger finger was put away.

For anyone that held off on any share investments, a wise decision!

Market is on its head at the moment after the recent news of the downgrading of the US credit ratings. I've received a report via email from an advisor showing that the UK and France are also in danger of losing their AAA Credit rating which would be huge. the EFSF (Eurozone Stability fund) would more than likely have its credit rating down graded as well.

Expectation is the market will continue to bleed heavily over the next few days. for those who dont mind a little risk a good time to invest! Looking at Rio who are down from $82 a share to $64 a share. over 20% since the beginning of August.

Other news from today, commonwealth bank and just now westpac have dropped their fixed rate interest rates by upto .60 of a percent. Im no financial expert, but this tells me the Australian financial sector is going to be hit  fairly hard, and expect rates to drop 1% or more within the next 6-8 months. the only banks to mention interest rates would be going down not in recent months was westpac interestingly enough

My guess is the share market will drop down to somewhere close to the numbers seen during the GFC.

hey bodie just curious did u see a financial planner in the end or just general research ?

I've seen an advisor / do have an advisor.

He's a little more....reserved than i am :), but has done a pretty good job.

Did justc heck that the market actually recovered today and then grew too. Looking at Rio shares up $4-$5 a share!!! someone would have made some good coin if they bought this morning.

I'd probably say the market will drop tomorrow as people will be selling some of the stock they made money from today.

http://usdebt.kleptocracy.us/

well those that bough houses 18 months ago could be down as much as 15% by now in most areas... so there is the proof in the pudding that you can't believe bricks&morter are as good as Gold.

As for Gold, well it's peaking in terms of it's Euro and Aussie Dollar value and can't climb much more without risk,

as for todays last few bood-baths, well it had to happen, you can't transfer public company debt in 2008 to goverment debt without cutting back on spending and increasing tax's.... a simple balancing act that the pollies in the USA, Europe and even here are not taking heed of.

Then we cutting out own legs off with a carbon tax that no body else will even sniff at with a possible recession on the horiozon, so I suguest you invest in lures, jigs, rods, reels &hooks and a big sail for you boat, cause we all going to be unemployed and can't afford petrol by next year if this carries on!

wondering if anyone has been playing with the market at all given the current economic climate??

Have been tading a bit lately, and actually making some good coin out of it! by just staying safe and playing with blue chip investments.

if i make 2-3 percent on a tade im happy!

Anyone else been playing at all?

i have some insight into the property market....wait till after new yrs......market is shite.....bit of activity in the noerthern suburbs sub 400.....anything over needs to be well located, well presented and priced to market..........anything above the 600K bracket is being hti and the higher the price bracket the worse it gets

golden triangle dianella is solid......stuff not near train lines is being smashed, ie mindarie (keep away)

buy near infrasctructure transportation routes or beach............outer periphery suburbs like butler et all alwqys get smahed hard in the market...price sensitive suburbs, to pricing cost of goods, serivces interest rates

u can buy blue chips and just put back into the reinvetsment plan=compound interest

Not sound advice for someone that just bought a boat with 3 motors lol

http://www.australianpropertyportal.com/Gallery