Beginner.

Hi everybody,

I am a 20 year old student residing in New Zealand. For the last couple of years i have been interested in getting into share trading and over the last 6 months or so i have done a lot of research on the topic.

I've got $1000NZD to start investing with, and am looking to try invest in some small cap stocks. All i have been told is that the best way to learn is to get out there and start. I am keen to try investing mainly on the ASX markets as most the shares on there have higher volumes than on the NZX and are therefore more volatile.

I have mostly looked at videos on technical analysis, and some on fundamentals, but it would be good if someone could recommend some good books on trading.

My main issue at the moment is finding a good online broker. The rates on ASB securities or DirectBroking seem far too high for me with the amount of money i have to invest? For example, i believe a trade on ASB will cost around $30 to open and close the position. And i believe that i should diversify enough so that i don't invest more than 10% on any one position. So if i am investing $100 i will have to make a gain of 30% just to break even which i realise is impossible starting out...

Ive also had a look at trading CFD's which seem like a good option as they are cheaper, i don't know a huge amount about them though. CMC Markets is a good option as its only around $8 per trade i believe, but this website has bad reviews.

Anyway, any feedback/tips would be greatly appreciated. Sorry if ive got any details wrong.

Thanks!

Personally I would throw the 10% on any one position out the window if you only have $1000 too invest. If your total capital was larger it would make more sense.

I started out in a very similar fashion. A friend was trading and I wanted to get into it. I played with $1000 but put it all in 1 stock with a stop loss and looked at making what I could. 30% on $1000 is a lot better than 30% on $100, in fact you would need to be making 61% to break even. For the amount time your investing the rewards are less than if you picked up a job at Countdown on the checkout.

Do a lot of research, read thru the market threads on sharetrader, don't get caught up with the rampers and hype on Hot Copper, find a stock that interests you then read and research as much as you can. I know more about drilling for oil in Kazakhstan than anyone should know, but I absorbed myself in what I was investing in.

I know almost nothing about CFD's other than if you don't know what you are doing then its very easy to lose.

My 2c worth, best advice I was given starting out was always DYOR :)

I am in a similiar boat as member Hurdley with only a few $1000s here and there. How can I reduce my brokage fee so I could expect an actual return?

I dont think $1,000 is enough to get started trading.

Its ok if you are a long term investor and you are able to add to this (ie. buy a different stock for $1,000 each couple of months) but if you are planning on selling short term, the commission will kill you.

CFD would work but with very little capital, a margin call is possible which will wipe you out.

My advice - invest in yourself. You are a student so ensure you come out of Uni with the best opportunity to get a good job possible.

Quote:

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Originally Posted by turmeric

[...]I'd suggest you put it all into the best stock you can find (regardless of what kind of market cap it is).[...]
[...]The other advice I'd give is be careful how often you are trading.[...]

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Quote:

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Originally Posted by Harvey Specter

[...]invest in yourself. You are a student so ensure you come out of Uni with the best opportunity to get a good job possible.

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Agree with these sentiments - the third best investment I made in myself was buying ~$1000 of stock that dropped to 25% of the price I paid in 6 months. As it turned out, five years later those shares were around 4x their original price.

Whether you 'win' or 'lose' with that sort of investment is not about the $; it is the lessons you learn. Look back and think about the reasons for what happened to the share price, but equally, think critically about the reasons behind any decisions you made (or didn't make). Rinse and repeat ad infinitum.

All that said, enjoy your time at Varsity and focus on your studies - both of these will help you once you get your piece of paper at the end. It's tough to make money on the sharemarket if you can't afford your rent.

Thanks heaps for the feedback anyone. I thought it might be the case that i would just have to invest with more money, so thats fine. I have looked at quite a few brokers and think ive come to the conclusion that Etrade Australia seems to be the best/cheapest with the cost per trade being $19.95. Was just wondering if anyone has used Etrade before and could give any feedback or pros/cons on it.

Other than that cheers everyone for the help!