Help for a new guy

[simjp81]

Hi everyone

I am new to investing, and was wondering if I should buy say 4 stocks at 2k each or a couple of ETF's at 4k each. DIV MDZ or FNZ.

Any thoughts or lessons learned?

[JeremyALD]

Hi everyone

I am new to investing, and was wondering if I should buy say 4 stocks at 2k each or a couple of ETF's at 4k each. DIV MDZ or FNZ.

Any thoughts or lessons learned?

You're very unlikely to make much with 8K in ETFs - at best 30% over a year. It is a low risk way to go though so you're not likely to ever lose too much.

Shares could be a way to go, but brokerage kills you a bit on small buy volume. For example buying 2K worth of shares will result in a buy fee of $30 with ASB securities, then another $30 to sell. That means you have to make 3% on 2K just to cover fees.

I'd say investing in four different companies is a better way to learn to begin with then going in ETFs. You can also buy more if you like the company later on.

[simjp81]

Thanks. Any experience with Craigs mySTART.

[simjp81]

You're very unlikely to make much with 8K in ETFs - at best 30% over a year. It is a low risk way to go though so you're not likely to ever lose too much.

Shares could be a way to go, but brokerage kills you a bit on small buy volume. For example buying 2K worth of shares will result in a buy fee of $30 with ASB securities, then another $30 to sell. That means you have to make 3% on 2K just to cover fees.

I'd say investing in four different companies is a better way to learn to begin with then going in ETFs. You can also buy more if you like the company later on.

Any suggestions on the first 4 stocks.

[JeremyALD]

Any suggestions on the first 4 stocks.

I suggest to do your own research as it really depends what you're looking for. If you're looking to learn better to pick your own companies. You learn best from your mistakes and good picks.

In saying that THL, HBL and ATM are my favourite at the moment. THL and HBL are both growing but pay a good dividend, ATM will start paying a dividend end of the year. I tend to pick stocks I believe are growing but can pay a dividend. That way I can hold over the long term if I need to. You can make more money on new companies, especially if youre investing a smaller amount, but they are riskier and harder to pick so I tend to stick to the NZX50 or ASX200.

[huxley]

Hi everyone

I am new to investing, and was wondering if I should buy say 4 stocks at 2k each or a couple of ETF's at 4k each. DIV MDZ or FNZ.

Any thoughts or lessons learned?

It depends.. what are you trying to achieve?

You'll probably learn a lot if you purchase the four stocks, but as mentioned the fees will reduce returns. On the other hand, you can't go wrong with an ETF if you're wanting to start a buy & hold, DCA investment which you can bulid up over the years.

Personally I do both!

If you're keen on DTY, I'd go with either ASB or ANZ rather than craigs ( note* I've never used them before, so may not be best positioned to judge the value of the research etc they provide).

Good luck with whatever you decide.

[simjp81]

It depends.. what are you trying to achieve?

You'll probably learn a lot if you purchase the four stocks, but as mentioned the fees will reduce returns. On the other hand, you can't go wrong with an ETF if you're wanting to start a buy & hold, DCA investment which you can bulid up over the years.

Personally I do both!

If you're keen on DTY, I'd go with either ASB or ANZ rather than craigs ( note* I've never used them before, so may not be best positioned to judge the value of the research etc they provide).

Good luck with whatever you decide.

Thanks Huxley. What ETF's do you hold. Should I build up a mid cap a large and say a dividend ETF or just stick to say 1 ETF.

[huxley]

35% US 500 ETF, 35% Europe ETF, 15% Aust Mid cap ETF & 15% NZX50 (auto rebalancing).

Originally was 70% US500, but recently split to include Europe.

Also I hold a few Australian banking stocks plus some NZX listed companies and a few bonds. KiwiSaver is a super long, unhedged world index position.

Plus one nearly debt free NZ property.

What will work for you? I can't really answer that sorry.

[Lewylewylewy]

If it were me I'd wait a bit, probably some more news will come (possibly from America) that will hit stock prices. Then I'd buy one decent, reliable stock.

Or, is wait until ANZ was nearing $28 and get that and hang on to collect dividends until it reached $34 then sell. That'll get you $10k, which is the most efficient small parcel to trade on.

Remember that there is a chance the stock you choose will tumble. You will probably choose the wrong one because you're new. If you choose the right one, there's still a chance it will tumble, bit it will come right off it's a good stock... But you better be prepared to wait 6 months, a year or possibly more in a major catastrophe (trumpageddon?).

Good advice above regarding what you want to achieve. If $8k is a lot to you and you don't want to lose it, the stock exchange is not a good playground. If you're happy to lose a couple of grand to learn the trading over the next year or so, it will be good to split your bets... Although I'd recommend going for one parcel and asking people on the forum for advice on the one you're thinking of buying. Learn how to research a stock. Decide on a strategy (trader or investor, dividend growth, steady large dividend with no growth, no dividend but SP growth, monetary goals [beat the bank, target exit, never get the money back but get a constant small income, no returns for x years then a big return, high risk, low risk], etc). Learn up on factors effecting the economy and different sectors, try to predict what will go well over the period of your investment strategy.

Personally I dislike ETFs. Decide what your goal is before picking something to invest in, otherwise it's like a doctor prescribing to the patient before diagnosing the problem. Shares aren't the only way to make more money than the bank, look at squirrel p2p for example.

How that's given you some things to consider.

[simjp81]

35% US 500 ETF, 35% Europe ETF, 15% Aust Mid cap ETF & 15% NZX50 (auto rebalancing).

Originally was 70% US500, but recently split to include Europe.

Also I hold a few Australian banking stocks plus some NZX listed companies and a few bonds. KiwiSaver is a super long, unhedged world index position.

Plus one nearly debt free NZ property.

What will work for you? I can't really answer that sorry.

Thanks. I assume you dont hold NZ midcap because its basically covered in the NZX50 ETF that you hild. Essentially doubling up. Its that correct.

[huxley]

That's my thinking, Same with the banking stocks/mid cap.

[huxley]

"Decide what your goal is before picking something to invest in, otherwise it's like a doctor prescribing to the patient before diagnosing the problem."

This is so true! (and changes over time!)

[RGR367]

Before all the advice get confusing, better head off first to our forum http://www.sharetrader.co.nz/forumdisplay.php?22-The-Newbies-Corner-The-place-for-the-Newbies-to-ShareTrader and read everything that could be related to what you would want to achieve. Almost everything has been covered already, I think.
GL.

[axe]

Hi and Welcome to sharetrader. The best place to get advice on which investment choices are right for you is a financial adviser. https://fma.govt.nz/compliance/financial-advice/types-of-financial-advisers/

The people here on sharetrader a great folks with many years of investment wisdom to share; but this is not the right place for advice.

[Turtle2]

I too am quite new to share trading and have found researching and picking stocks has taught me a lot. So in terms of the 'lessons learned' part of your original question, having money in individual stocks rather than ETF's has definitely made me keep up to date with the market and particular companies and I've therefore learnt a lot more. If you're not just in it for the money but the knowledge as well, I'd say thats the way to go.

[Lewylewylewy]

What did you end up buying in the end?

[simjp81]

What did you end up buying in the end?

Thanks for all the feedback and suggestions. I ended up joing a Craigs IP mySTART account.

S&P 500 ETF
iShares Global Tech ETF
Westpac Banking
Summerset
Mainfreight
Z Energy
Auckland International Airport (although only a small amount as it seems overpriced)