Newbie share trading.

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#1810605 2-Jul-2017 21:06

I was almost certain there was a similar thread 3 months or so ago. Jiggered if I can find it though.

Sorted.org.nz should be your starting point as to the fundamentals of investing. If you want to invest in NZX listed stocks direct, ANZ and ASB offer on line trading platforms. If you decide to go down the managed fund or ETF route, good starting points are NZX Smart Shares, Rabo Direct and your existing KiwiSaver provider (and if you don't already have KiwiSaver, you should be investing the $1,000-odd minimum a year for $500-odd guaranteed returns - won't beat that anywhere). I've also met the guys that are starting up www.sharesies.nz - nice guys with a good idea to help people invest. They're in beta but you might want to have a look at that too.

logo

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#1810608 2-Jul-2017 21:19

Kol12:

Thanks @logo, I don't think I will balls an order up now! Can't see a depth option though... Hmm is that brokerage for brokers other than ASB/ANZ Securities? I believe ANZ trade fee is $29.90...

You have to be logged in to see the depth details for a particular share (choose from the drop down box that has details, depth, news etc...). The listed price (last sale price) may not be a very good indication of current price, for example if the last sale was 229 but the current buy bids are 210 then if you going to sell at market price you would only get 210 - not 229.

ANZ fee is $29.50 for under $10k but if you're trading you will have a fee to buy and a fee to sell so 2 x $29.50 = $59 for a buy/sell trade.

Kol12

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#1810616 2-Jul-2017 21:45

logo:

You have to be logged in to see the depth details for a particular share (choose from the drop down box that has details, depth, news etc...). The listed price (last sale price) may not be a very good indication of current price, for example if the last sale was 229 but the current buy bids are 210 then if you going to sell at market price you would only get 210 - not 229.

ANZ fee is $29.50 for under $10k but if you're trading you will have a fee to buy and a fee to sell so 2 x $29.50 = $59 for a buy/sell trade.

Here it says "depth is only available to ANZ Securities clients who have placed a trade via the ANZ Securities website in the last 90 days." https://www.anzsecurities.co.nz/directtrade/static/depthtutorial.aspx

Is that why I don't see it?

logo

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#1810622 2-Jul-2017 21:56

Kol12:

logo:

You have to be logged in to see the depth details for a particular share (choose from the drop down box that has details, depth, news etc...). The listed price (last sale price) may not be a very good indication of current price, for example if the last sale was 229 but the current buy bids are 210 then if you going to sell at market price you would only get 210 - not 229.

ANZ fee is $29.50 for under $10k but if you're trading you will have a fee to buy and a fee to sell so 2 x $29.50 = $59 for a buy/sell trade.

Here it says "depth is only available to ANZ Securities clients who have placed a trade via the ANZ Securities website in the last 90 days." https://www.anzsecurities.co.nz/directtrade/static/depthtutorial.aspx

Is that why I don't see it?

Probably - sorry I was referring to ANZ Share & Bond trading (https://www.anzshareandbondtrading.co.nz/static/home.aspx) which has different features and fee structure than ANZ Securities, the former of which stopped taking new signups back in 2015. Just realised my mistake.

Kol12

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#1810628 2-Jul-2017 22:12

logo:

Probably - sorry I was referring to ANZ Share & Bond trading (https://www.anzshareandbondtrading.co.nz/static/home.aspx) which has different features and fee structure than ANZ Securities, the former of which stopped taking new signups back in 2015. Just realised my mistake.

Would it be similar to the performance section in the overview of the FNZ which includes the open, high, low, high bid and low offer?

BlinkyBill

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#1810649 3-Jul-2017 05:20

tdgeek:
Been a long time since I was on the sharemarket. I get that these unit trusts offer an easy in, no maintenance, but as Antoniosk says, low risk but low gain.

I'd focus on some individual companies. Sectors that can grow, company that is solid and can grow more than its competitors or the industry average. You can add in some higher risk companies, and some low but safe risk. if a company is profitable, sound, the risk isn't high. Fashionable is good too, but watch the P/E on those. A boring company that just makes money and grows will eventually get on the radar. I had great success with a comment that was a cleaning company. Another into womenswear. Not fashionable, but every year they increased profits, asset backing kept rising. Its fun too

Even had some L+M Oil. Buy at 2c sell at 4c lol

Oh dear ... this isn't good advice for a newbie. This strategy, in fact any stock picking strategy, requires a lot of work, detailed knowledge, and luck.

It has been proven that passive index trackers provide average returns as good as the average active funds managers do, over the long term.

Warren Buffet has a bit of a track record, perhaps his advice to passively track the market might hold some swap over that of someone who hasn't been in the market for a long time. Just sayin.

tdgeek

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#1810661 3-Jul-2017 07:59

BlinkyBill:
tdgeek:

Been a long time since I was on the sharemarket. I get that these unit trusts offer an easy in, no maintenance, but as Antoniosk says, low risk but low gain.

I'd focus on some individual companies. Sectors that can grow, company that is solid and can grow more than its competitors or the industry average. You can add in some higher risk companies, and some low but safe risk. if a company is profitable, sound, the risk isn't high. Fashionable is good too, but watch the P/E on those. A boring company that just makes money and grows will eventually get on the radar. I had great success with a comment that was a cleaning company. Another into womenswear. Not fashionable, but every year they increased profits, asset backing kept rising. Its fun too

Even had some L+M Oil. Buy at 2c sell at 4c lol

Oh dear ... this isn't good advice for a newbie. This strategy, in fact any stock picking strategy, requires a lot of work, detailed knowledge, and luck.

It has been proven that passive index trackers provide average returns as good as the average active funds managers do, over the long term.

Warren Buffet has a bit of a track record, perhaps his advice to passively track the market might hold some swap over that of someone who hasn't been in the market for a long time. Just sayin.

"Oh Dear" How about discussing my post instead of knowing it all?

The OP is a newbie, he has decided to go for ETF as I assume that means no real knowledge needed, so he is in. But, if you read his post he also wants shorter term, which means he wants to look into his own portfolio, where his interest is dividends and shorter term gain

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

tdgeek

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#1810663 3-Jul-2017 08:14

Kol12:

tdgeek

The individual companies you talk of are these something you want to hold onto for a long term or something that you might gain on after a year or so? Is it possible to make gains selling selling in even shorter terms?

ETF will give you a piece of a portfolio, managed by them. It would have a mix of solid companies, a few that may offer better than average growth, with a risk attached.

You can do the same. Everyone was a newbie. Read up the financial pages, the news, get a feel for where growth sectors may be. Contact a broker, and get some advice on progressive companies that have growth prospects. Your not talking BIG SOLID companies, but your also not talking speculation. Second tier companies who increase profits annually, appear progressive. You cant expect to buy shares in XYZ Ltd for $2-20 and flick them off next year for $3-20. It could happen, but you should be more interested in medium term growth, but short term gains can happen. While its cool and safe to have a portfolio of the top 3 companies, there are more prospects in second and third tier companies, they will have a lower P/E and thus more room for gain, should they continue to do very well year after year, they will become noticed, seen as undervalued and increase. Their asset backing will increase so the share price needs to catch up, and if they increase the dividend, that helps the price, as does if they get noticed and buyers decide to get on board.

Get some advice from a broker and see how you feel.

Ouranos

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#1810734 3-Jul-2017 09:49

tl;dr: make long term investments in a well-diversified portfolio, including shares, in a way that minimises fees and tax.

As usually happens when someone asks for advice about investing, people offer a variety of contradictory tips – buy this, don’t buy that, do what I did and you’ll do well. Almost all such advice is of dubious value, being based on anecdote and human biases.

On the other hand, there is a large amount of research into share market investing. My understanding of the key lessons from that research include:

- Shares are risky but, on average over the long term, shares are a good investment. The "long term" part is important: invest in shares only the money that you don't need for at least several years (advice varies, but a minimum of 5 to 10 years is typical). For example, if you want to use the money to buy a house in 2 years from now, then do not buy shares.

- Diversification is essential. The value of individual company shares, and even whole markets, can vary greatly over time. In practice, diversification means owning shares in at least 30 individual companies (though a fund that covers at least a large portion of the whole market is better). A convenient way to achieve some diversification is to buy an ETF such as FNZ. Note that investing in only shares is not good diversification; a well-diversified portfolio includes other asset classes such as property, fixed interest (bonds), etc. Also, investing in only NZ shares is not good diversification, as NZ is a tiny fraction of the global share market.

- Fees matter. Invest in a way that minimises fees. For example, buying $1000 of shares in each of 30 companies, each with a buy fee of $29.90, is expensive. A common rule-of-thumb is that the fee should be no more than 1% of the investment.

- Tax matters. Tax on investments can be very complex. It can also be very expensive if you get it wrong. In NZ, the IRD may deem you to be a trader if you buy/sell shares often. That will make any share price gains taxable as income.

- People are often irrational, markets are sometimes irrational. The current price of a share, or even a whole market, is not necessarily related to anything. Beware of manias and fashion – people, and sometimes markets, get carried away with excitement or fear. A company that is valued at billions of dollars, but which has never made a profit, must be treated with great caution. People who say, "but it is different this time" or "the old rules of investing no longer apply" should be dismissed as dangerous and/or foolish.

- Do not buy based on past performance. Just because an investment has performed well in the past does not necessarily mean that it will perform well in the future. You are not buying the past performance, you are buying the unknown future performance.

- Do not attempt to "time the market". The strategy of 'buying when the price is low and selling when the price is high' is an obvious way to maximise returns. Unfortunately, it is also extremely unlikely that you'll be able to achieve it consistently. More likely, you'll mistime the buying/selling and achieve a below average return.

- Frequent trading is bad. The only strategy that has been shown to be consistently effective is "buy and hold". Numerous studies have shown that more trading leads to lower returns, on average (eg. https://faculty.haas.berkeley.edu/odean/papers%20current%20versions/individual_investor_performance_final.pdf). Those studies also show that people who trade more frequently tend to be over-confident in their ability and believe that their portfolio performance is increased by their trading, even though their performance is below average. Note that numerous studies also show that professional investors, such as fund managers, cannot consistently out-perform the market average. Remember that you are competing with lots of people, many of whom have more information than you do.

MikeAqua

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#1810740 3-Jul-2017 10:01

I learned a lot by joining a share club.

It's not a money making venture in itself - we put in $100 per month each. We run it like dragons den, but with beer. Its crucible. You have to really know your stock and make a good case for investment. With a dozen guys from different professional backgrounds doing this you learn a lot.

I've done OK mimicking a few of our club buys.

Mike

Benjip

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#1810741 3-Jul-2017 10:01

mdf:

I was almost certain there was a similar thread 3 months or so ago. Jiggered if I can find it though.

Sorted.org.nz should be your starting point as to the fundamentals of investing. If you want to invest in NZX listed stocks direct, ANZ and ASB offer on line trading platforms. If you decide to go down the managed fund or ETF route, good starting points are NZX Smart Shares, Rabo Direct and your existing KiwiSaver provider (and if you don't already have KiwiSaver, you should be investing the $1,000-odd minimum a year for $500-odd guaranteed returns - won't beat that anywhere). I've also met the guys that are starting up www.sharesies.nz - nice guys with a good idea to help people invest. They're in beta but you might want to have a look at that too.

I've been using the Sharesies beta for a couple of weeks and I'm loving how easy it is – I've set up an AP to go through every week with tiny amounts of cash (currently $15 per week) just for fun.

Long-term I imagine the app will get a lot more in depth, with graphs etc. showing how your investment is tracking (at the moment it's just a basic "current portfolio value" which fluctuates by a few cents every day as the different shares go up and down in value).

Kol12

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#1811100 3-Jul-2017 16:50

Really appreciate the info everyone is providing.

I placed an order on the FNZ today, it's one I plan on being a long term+ investment. It's the other investment types that I'll need to think more carefully about.

I put a bid in of 225 cents. Based on the charts over 6 months it hasn't gone below 220 cents. Is that the way to go about setting a price limit, looking over history graphs?

@Ouranos and everyone else

What international markets do you think are good to get into?

Can anyone tell me how the Smart Income and Smart Dividend ETF's work? Are these able to create a monthly income in interest? These are bond investments is that right? I'm referring to http://smartshares.co.nz/types-of-funds

Kol12

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#1812850 4-Jul-2017 20:15

Noticed the replies ceased since I mentioned placing an order, making me nervous... What are your thoughts on the FNZ ETF?

BlinkyBill

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#1812928 4-Jul-2017 22:11

tdgeek:
BlinkyBill:
tdgeek:

Been a long time since I was on the sharemarket. I get that these unit trusts offer an easy in, no maintenance, but as Antoniosk says, low risk but low gain.

I'd focus on some individual companies. Sectors that can grow, company that is solid and can grow more than its competitors or the industry average. You can add in some higher risk companies, and some low but safe risk. if a company is profitable, sound, the risk isn't high. Fashionable is good too, but watch the P/E on those. A boring company that just makes money and grows will eventually get on the radar. I had great success with a comment that was a cleaning company. Another into womenswear. Not fashionable, but every year they increased profits, asset backing kept rising. Its fun too

Even had some L+M Oil. Buy at 2c sell at 4c lol

Oh dear ... this isn't good advice for a newbie. This strategy, in fact any stock picking strategy, requires a lot of work, detailed knowledge, and luck.

It has been proven that passive index trackers provide average returns as good as the average active funds managers do, over the long term.

Warren Buffet has a bit of a track record, perhaps his advice to passively track the market might hold some swap over that of someone who hasn't been in the market for a long time. Just sayin.

"Oh Dear" How about discussing my post instead of knowing it all?

The OP is a newbie, he has decided to go for ETF as I assume that means no real knowledge needed, so he is in. But, if you read his post he also wants shorter term, which means he wants to look into his own portfolio, where his interest is dividends and shorter term gain

I was commenting on YOUR advice to "focus on some individual companies". Buffet advised that passive tracking, aka ETF's, outperform active trading over the long term, on average. So, for newbies investing in, and holding ETF's is a good strategy. For newbies, "focusing on some individual companies" is not.

tdgeek

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#1813015 5-Jul-2017 07:11

BlinkyBill:
tdgeek:

BlinkyBill:
tdgeek:

Been a long time since I was on the sharemarket. I get that these unit trusts offer an easy in, no maintenance, but as Antoniosk says, low risk but low gain.

I'd focus on some individual companies. Sectors that can grow, company that is solid and can grow more than its competitors or the industry average. You can add in some higher risk companies, and some low but safe risk. if a company is profitable, sound, the risk isn't high. Fashionable is good too, but watch the P/E on those. A boring company that just makes money and grows will eventually get on the radar. I had great success with a comment that was a cleaning company. Another into womenswear. Not fashionable, but every year they increased profits, asset backing kept rising. Its fun too

Even had some L+M Oil. Buy at 2c sell at 4c lol

Oh dear ... this isn't good advice for a newbie. This strategy, in fact any stock picking strategy, requires a lot of work, detailed knowledge, and luck.

It has been proven that passive index trackers provide average returns as good as the average active funds managers do, over the long term.

Warren Buffet has a bit of a track record, perhaps his advice to passively track the market might hold some swap over that of someone who hasn't been in the market for a long time. Just sayin.

"Oh Dear" How about discussing my post instead of knowing it all?

The OP is a newbie, he has decided to go for ETF as I assume that means no real knowledge needed, so he is in. But, if you read his post he also wants shorter term, which means he wants to look into his own portfolio, where his interest is dividends and shorter term gain

I was commenting on YOUR advice to "focus on some individual companies". Buffet advised that passive tracking, aka ETF's, outperform active trading over the long term, on average. So, for newbies investing in, and holding ETF's is a good strategy. For newbies, "focusing on some individual companies" is not.

My mistake. When the OP said "Of course people recommend to diversify your investment profile where is where I'm a little stuck. I'm interested in short term trading and trading for income via dividends also but aren't really sure where to go with that."

I mistakenly took that to mean "Of course people recommend to diversify your investment profile where is where I'm a little stuck. I'm interested in short term trading and trading for income via dividends also but aren't really sure where to go with that."

Hence I commented on that. So instead of being argumentative to me, you should have said to the OP that he should ONLY invest in an ETF. And therefore remain a newbie. It does seem to me that he would like to be more than a newbie. Having said that, I could have emphasised to start small or pretend buy, re my advice, although that advice had already been mentioned by others

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