Intro

[Fox]

Hey everyone,

I have recently just signed up to ST after browsing around for a few weeks. This place looks like a very supportive and active environment which I'm glad I found.
Here's a little bit about me; I am an 18YO uni student, studying BioMedical Science at Auckland Uni and applying for Med School at the end of this year. I have always had a passion for saving money and finding ways for my funds to grow. I currently don't have a job as I am focusing on my education this year especially, but I would still like to earn more than 4% on my savings in the bank.

I recently purchased 2000 Air NZ shares on Monday for quite a reasonable price and intending to sell early-mid next year if everything goes according to plan. This is my only acquisition so far as I wouldn't like to risk more capital than currently invested. However expanding my portfolio is a major objective, it's just difficult with brokerage fee's of $30 for every trade.
My worry is that by obtaining another position (in a different sector), I would have to double my profit from 1.5% to 3% in order to cover the $120 brokerage fees (incl. selling). Would you say that by halving my costs (but doubling the risk) by investing in just AIR is sensible? I firmly believe AIR will see a net gain in SP over the next few months especially over the new year and my analysis of the company seems pretty sound IMO.

Anyway, cheers for the read and any comments/advice to a young aspiring investor would be greatly appreciated.

[Minerbarejet]

Gidday Fox,
With your current position and planned future it seems that Pacific Edge might be a suitable candidate.
Read the Pacific Edge thread reasonably thoroughly and then make your decision. Should be right up your alley.
Welcome aboard
Cheers
Miner

[Fox]

Great, thanks Miner. I will check PEB out.

[jonu]

Hi and welcome Fox.

Couple of things about your AIR purchase. Have you timed your exit around divvy payout? If so remember that post divvy the price often drops by a similar amount to that of the divvy. Having a pretimed exit from the market is a dangerous thing. It is not like a term deposit where you know exactly what your position will be. I think most people on here will tell you that timing of entry and exit from the market are huge influences on whether you make any money, and if your exit time is fixed for whatever reason, you could be placing yourself at risk.

Good luck, if you do things right , you won't need much.

[noodles]

Welcome to the board.

I don't think it is that realistic to expect your funds to grow significantly with such small capital. Brokerage will eat away at a lot of your profits. But I wouldn't worry too much about it. At this stage of your life, it is all about learning the market. In 10 years time (and with a MD after your name), you will have at least $4K per month of spare cash to invest. Best to focus on learning the stock market when you have low capital, and apply your learning with a lot more risk when your are experienced and have more capital.

I also think it is worth writing down why you bought AIR. Writing things down is a great way to collect thoughts and you can get feedback from forum members if you have made any mistakes.

Also, I suggest you don't take stock tips from others. When you take a tip, you are often not doing your own analysis and you often don't know when the person who gave you the tip sells out. Do your own research. It is far more satisfying when you make money with your own ideas.

There will be losses in your share trading career. Make sure you learn from them.

Good luck.

noodles

[Fox]

Couple of things about your AIR purchase. Have you timed your exit around divvy payout? If so remember that post divvy the price often drops by a similar amount to that of the divvy. Having a pretimed exit from the market is a dangerous thing. It is not like a term deposit where you know exactly what your position will be. I think most people on here will tell you that timing of entry and exit from the market are huge influences on whether you make any money, and if your exit time is fixed for whatever reason, you could be placing yourself at risk.

Hi Jonu, yes I have realised this regarding the divvy. I was leaning towards exiting a bit after the payout after the SP climbs again, but I will definitely reassess nearer the time. I have no need for the invested money as it is only a small fraction of my current equity, and I realise that if I lose some or all of it (certainly hope not), I will have learnt from my mistakes and can apply that to future investments. At this stage I am just doing my own research and cautiously investing with funds I wont cry about if I lose completely. I would like to explore other sectors and that is my reason for exiting, so I can use that money without increasing my risk.

At this stage of your life, it is all about learning the market...Best to focus on learning the stock market when you have low capital, and apply your learning with a lot more risk when your are experienced and have more capital.

I also think it is worth writing down why you bought AIR. Writing things down is a great way to collect thoughts and you can get feedback from forum members if you have made any mistakes.

Also, I suggest you don't take stock tips from others. When you take a tip, you are often not doing your own analysis and you often don't know when the person who gave you the tip sells out. Do your own research. It is far more satisfying when you make money with your own ideas.

There will be losses in your share trading career. Make sure you learn from them.

Yes, I completely agree with you Noodles. I have learnt to never agree and trust everything you read (especially on forums) and to do your own research on stocks that you are interested in. My goal for now is to just learn about how the market behaves, how to analyse technical and fundamental characteristics, and also what to look for when investing. I'm reasonably new to the investing scene and investing a small amount of my funds in order to learn early in my life is well and truly worthwhile IMO.

Thanks for your help.

[artemis]

If you are buying with the intention of selling, you will be regarded by the IRD as a trader. That's quite a different ballgame to being an investor, so suggest you add this to your list of stuff to find out about.

My other and related suggestion is to set up an email account or an email folder for your share contracts (and property purchases). When you get the electronic contract advice, forward it to that account or folder with a covering email setting out the reasons for the purchase, for all assets but especially for growth assets. This is easy to do and if IRD ever enquires you have date stamped records of intentions.

[Fox]

Thanks for the tip artemis. Wouldn't most investors look to sell in the near or distant future, unless you hold the investment for your whole life and never sell?

[artemis]

Thanks for the tip artemis. Wouldn't most investors look to sell in the near or distant future, unless you hold the investment for your whole life and never sell?

It's nearly all to do with the intention at the time of purchase, but also with the time the asset is held and whether there is a pattern of trading. Can be a bit of a grey area so best to do your research early on as the wrong path can cost you later. Income assets (eg dividends paid) are fairly straightforward to justify as an investor.

You may be fine with being a trader - there are some on this site - but it's a decision to be made before you get too far down the track, rather than set out and hope for the best.