intro plus bond:share ratio for a young newbie

[grach017]

Afternoon all,

Just thought Id say Hello and say thanks for providing such a great forum for like minded people!

Im early 20s post uni looking to get in to shares very soon. Probably starting this week funnily enough! having read books/listened to info and educating myself over the best part of a year.

Dont have a lot of money (comparatively to most of you lot) to play with initially but enough to get 4 or 5 substantial pick ups immediately and adding over the long term. Have only an interest free student loan as debt the bank reckon im in such a good spot they offered me a 95% mortgage! ... no thanks!

Probably gunna spread myself with a couple of index funds then just stock pick. Im very averse to managed funds unless someones got evidence to the contrary?

Main question. Given my age and situation... would you hold bonds? Surely im looking at less than 20% allocation? Am i Insane to consider 100% shares??

Any musings would be most appreciated or even just a hello back

[CJ]

I dont hold bonds as I am too far away from retirement. 100% shares is fine, especially if you dont need income for anything. Oldies like bonds as it gives them a regular income they can rely on to pay the bill.

If you do want to hold a debt instrument, for small amounts (I think bonds require a $5k or $10k minimum parcel?), just go with Term deposits. The issue with bonds is they are normally longer term (3-7 years) and you have to pay brokerage to get out of them early and unless you buy at the issue, you also have to pay brokerge to get in as well.

Not specifically on point but also ensure you have a cash buffer should you need it for something. Nothing worse than having to sell a share before you have too. This can be in the form of cash, overdraft (I have a huge uncalled revolving credit secured on my house) or sympathetic parents (I always knew that if I needed urgent cash for medicals etc, my parents would loan me the cash - not all parents are willing and/or able).

[OldRider]

Hi grach
I don't view your ideas as insane, keep thinking. Would suggest you might add to
your thoughts one or two of the larger Australian Lics. I don't view them similarly to managed funds.

[grach017]

Thanks for the replies folks. Interesting reads on bonds thanks for that belgarion

I think im going to stick with 100% shares at present. My thoughts are some large index funds as a base to really spread the risk.