How long did you paper trade before jumping into the big world of real life trading?

[toast2success]

Just a question out of curiosity really.... wondering how long people ran a portfolio on paper before actual fronting up with real cash and going live....

[Corporate]

I went straight to real life. Paper trading is just to artificial for me and the decisions I would make under each situation would be different.

This isn't for everyone though!

[CJ]

I started with Term deposits as a kid. Moved all the money into managed funds and then when I got bored of that started slowly moved across to shares as I found ones I liked. Didn't paper trade per se just keep note in my head of share prices and what sort of events caused movements.

I think diversification is key. As a noob, if you only have one share and it goes down, you will probably give up wheras if you have say 4+, hopefully at least one of them will be doing well to keep you inspired. Therefore I would wait till you have $20k+ to invest as $5k (ideally $10k) is really a minimum investment if you want want to be paying too much in fees (as a percentage).

[slimwin]

3 years! I started in 2008 though and wasn't about to make my first foray into shares in 2009. Of course that would have been the best time for the shares I was looking at. (all US companies as I was paper trading on investopedia). It's very easy to be an outstanding investor is hindsight though. One of the really good bits of advice I took on board was to stagger my entry. It'll be about 1.5 years befoe I have all my cash out there. You'll miss some ups and downs but have a better averaged entry.

The problem with paper trading is your only going to do it for a short period of time and I presume your trying to learn how to invest which is a longer time frame. I found it very useful for getting used to things going up and down and how to buy/sell etc. Corporate is quite right about it being different when it's real money though. I find myself less likely to sell on a shock when it's my own. Perhaps it should be the other way around. CJ's 2nd paragraph is sage advice that you'll hear alot.

[toast2success]

cool, thanks for all the info and stories, keep em coming...I guess another interesting question would be is how much did people start off with when first investing and what do people consider a minimum to invest in one share at the beginning. I see CJ mentions $20k (5-10 as a minimum) as a starting point (would that be $20k split among maybe 4-5 different shares) I'd feel like Buffett if I had $5k in my bank account..pretty sad really haha. I like the idea of diversification and staggering the entry.

[CJ]

I see CJ mentions $20k (5-10 as a minimum) as a starting point (would that be $20k split among maybe 4-5 different shares) To clarify, I meant buying at least 4 shares with a minimum investment in each of $5k, to have a portfolio worth $20k. Depending on how fast you can save, if you are staggering your entry, you may not need the full $20k upfront.

Say you only have $1k. It is $30 to get in and $30 to get out (ASB Brokerage) so it has to return over 6% before you break even.

I appreciate $20k is a lot of money when you are first starting out.

[grach017]

To clarify, I meant buying at least 4 shares with a minimum investment in each of $5k, to have a portfolio worth $20k. Depending on how fast you can save, if you are staggering your entry, you may not need the full $20k upfront.

Say you only have $1k. It is $30 to get in and $30 to get out (ASB Brokerage) so it has to return over 6% before you break even.

I appreciate $20k is a lot of money when you are first starting out.

Thank you for telling it straight like that. Thats my situation exactly and the bank and other 'gurus' didnt give me any such specificity! Useless buggers.

Oh actually the bank did say i could just hand them all the money for a 95% mortgage!