Hey I'm a total newbie when it comes to stocks, currently I'm at the "I have some money saved and I'd like to move beyond term deposits, what are my options stage"
In normal circumstances (i.e. when there's not a credit crunch on) What would the risk and return look like for:
a) Giving all your money to a fund manager i.e. AMP and going with an aggressive strategy
b) Investing in an index i.e. NZX
c) Investing in an index for a particular class i.e. utilities
d) Doing your homework, become an active investor and buy individual stocks
for b) and c) - i assume that you do this via a fund manager - though please do correct me if i'm wrong
Thanks in advance!
What's is a good return?
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04-11-2008, 05:28 PMstevesnzWhat's is a good return?
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04-11-2008, 06:46 PMfungus pudding
Damned if I know the answer, but it sure isn't a,b or c.
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06-11-2008, 03:25 PMPlaceboSteveS I think most people on here would be in the d) category, having first tried one or another of a) b) or c). Managed funds are fine in a rising market so long as you don't mind paying the fees. The trouble is that once you are in them it is difficult to extract yourself. And you're right - I'm not sure how you would `buy an index' unless you went through a broker.Quote:
Originally Posted by stevesnz
There is a NZ company that is taking an approach that might interest you - have a look at Fisher Funds' various entities (Barramundi, Kingfisher), they buy up portfolios of companies in various categories, essentially they are trying to pick winners, and had some success, though of course in current market environment they are faring little better than anyone else.
You need to ask yourself a couple of questions before you start:
1: What sort of risk am I prepared to take on? Low risk think term deposits - you want to move beyond this. Medium risk I would say things like utilities. High risk you want to look at technology/exporter companies or less mature companies (like start-ups) but who may have attractive prospects, or speculative plays like mining/oil prospecting companies.
2: Are you an "investor" or a "trader"? If the former, you'll be looking at long-term (5-10 years?) horizons, so won't be so fazed at daily rises and falls,. If you are a trader, daily (and intra-day) rises and falls will trouble you greatly.
You might want to try setting yourself up with a "virtual portfolio" for a few months to see how you go. You can do this through yahoo finance, there are bound to be others. Pick a few stocks, load in the data, see how you go. You might find you know more than you think you do ;)
Good luck!
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