Hi all,
I live in Perth, I have a lazy 50k in my savings account.
At the moment I am thinking of investing in a property. But I think that the homes are a bit over priced in Perth at the moment.I am thinking also of buying Gold and holding it for a couple of years.
Or maybe start trading options in blue chip companies and writitng call options every month.Which way is the best plan?
Thanks for the time taken.!!
Hong Tran
It is difficult & illegal for anyone who is not Licensed to offer you financial advice on the forum. Without knowing your exact position and a full fact find i won’t try here.
However all i would say is that every person’s goals and asperations are different and everyone has a different expectiation as to what sort of return they want to receive.
$50,000 is a not a great deal of money if you are consider buying options in shares on the ASX 100. Unless you are experienced in this area i would leave the market alone.
I have too many clients who thought they could make their fortune alone trading Puts and Calls and have come a cropper.
If you buy the share alone and look to write Call Options against the stock you will not get much for your money. $50,000 equates to around 2100 BHP shares or 1100 Commonwealth Bank Shares. As both currently trade at a 1:1000 Option ratio you are certainly not going to get rich quick.
Writing Call Options also have a considerable downside especially in a Bull market. Other strategies such a strangles / spreads maybe more appropriate.
If you are confortable in gearing why not look at the array of Installment Warrants around again depending on your time frame. You could always write Call Options against the Warrants.
Whilst the market maybe more liquid than investing directly in property it is easy to loose your hat, coat and everything else you own. Trust me I was on the floor in 87 and saw it happen with my own eyes.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
some commonsense from 007 there, great post..
On another note I cant see Perth property getting any cheaper in the coming years..however, your strategy should be one that best suits “you” and your comfort zones
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThank you for the time taken to read this post.
Qlds007- I am very new to the market and I have been influenced by a friend to jump into the asx100 to trade options. You say that you have been on the floor in 87. I was 4 years old, so I respect your experience and I will take your word for it.
Also, where can I learn about installment warrants? I love to learn everything.
Redwing- Thanks, I will go for what suits me. Perth property is getting very hot and harder to find investment bargins.
You can find all the learning material that you need at http://www.asx.com.au. If you search warrant issuers you will find a few of the bank’s websites that will have various education material and PDS’ too. Send them an email and ask them to send out whatever they have on warrants, options, structured products..etc.. and start from there. Good luck.
But word of caution: its very easy to make money in a bullish market. Don’t be fooled by professionals saying using fancy derivatives allows you to make money in both directions – thats cos they are in it ripping the margins off the little battler. Finance professionals are not paid the big bucks for nothing. Remember, its eventually a zero sum game and information is key. Do you have it?
THE Stock Market is for Suckers !
Great post from the other forum and sure to invoke a response from Traders.
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThanks asdf, I have been reading the warrants on the ASX website and I am still learning more.
Redwing – I have been reading your posts from a while ago and I am very impressed on your comments.
What kind of books do you read?
can you recommend me a few?Thanks,
Hong Tran[baaa]
I found the stock market to be much like poker machines, fun for a while, win some loose some, but as I was not an educated trader I focused my investing on property.
You have to decide what you would like to achieve and what time from you expect to achieve your goals. The stock market may suit your investing goals..??
If not property (generally) is not getting any cheaper, even in Perth!
Cheers
Jeff Aquilina
Need a holiday? http://www.coralsearesort.com email [email protected]
jjaaus- I agree with you. I like property because I am the type of person who likes to renovate homes and DIY kind of things to improve the property.
My goals are to get rich slowly ( retire in atleast 10 years). Thats when atleast at the end I will still be financially secure.
It doesnt really matter if I lose or win money in share trading, I would like to do because I would want gain some experience.
I love to learn and my first steps already is reading finance books and autobios.Good to hear that you are going to take things slowly.
The Options market is like the roulette wheel and dominated by the big institutions. Great game for the knowledgeable but it is like holding a buring piece of paper eventually it burns to your fingers and you loose your capital if you are not smart enough to take preventative action.
You can never learn too much and the ASX website is excellent for beginners and intermediaries alike.
Most large broking houses also have good websites all of course pushing their own barrow:
Try free sites like
http://www.abnamro.com.au / http://www.aussiestocksforum.com.au
http://www.citiwarrants.com.au / http://www.sandford.com.au / http://www.wilsonhtm.com.au.Organisation like Macquarie who are the largest issue of Warrants in Australia also have good websites and you can learn about the different type of warrants.
I think the message is you can also learn from the sideline at no cost to your pocket.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Hong,
When I looked at shares V property for myself the attractive things was the leveraging capacity of property. Went to property initially and have diversified into shares using available equity.
However rather than trade warrants (too risky for this little black duck) I put some hard earned into the Navra Fund which suits me perfectly.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958you can always invest your money on a fund manager, while you study up on either shares or property.
however, there are some down sides to fund managers, such as not very high return (depending on what your looking after) as they have to diversify their funds. but there’s always growth funds you can invest in. another downside with managers are that you have to pay constant fees which can be a hassle.
before you spend your money, decide if you want to invest or trade in the sharemarket, which are 2 vary different things. trading is very time costly and you have to study up alot or else you’ll just be “gambling”. many ppl make a living of trading.one other thing… why not invest in LPT ??
there’s certainly alot of options in the sharemarket, but ‘d agree with other posters and i wouldn’t jump in to options as they’re not an easy way of earning money… if you don’t know what you’re doing.
if you’re looking to boost your returns you can use cfds which can be applied into bluechips.many options availabe… just don’t get sucked in other ppls advice on where to invest… there are alot of guessers in the market, do your own research and your own analysis.
Agree totally with Richard’s comments.
no such thing as get rich quick, been there, it doesn’t work.
Trading: I’ve tried numerous things, for the amount of energy, effort, time and stress spent you get exactly nowhere.
It doesn’t matter what assorted software sellers, books etc tell you.
The ASX website is an excellent source of knowledge.
If I have some cash, I would consider installment warrants and covered calls.
The web site tells you about that strategy.
Property is similarly not a short term capital gain but good leverage.
Have you got your own home?, that’s a great start for financial security.lucianocampos – Thanks for the advise. I think the best option is to invest in myself and educate myself first right? What so you think about starting a commsec online trading account and start paper trading?
regina – I agree with you. I wanted to do covered calls on blue chip companies. I have read a few topics on the ASX website and I have found it very helpful.
I currently do have a property due for development but I would like to buy more. The problem is that WA is going though a property boom. I am not sure if I should buy now or buy in a few years time.
I am aware of the property cycle, however I have very little patience aswell.[withstupid]A spare 50k……that’s a nice dilemma.
Some of the comments so far look like sound advice.
If you are looking at property in Perth then I would go for it. Mining boom may have the legs for another 2-3 years, so that means investors over that way will be cashed up. Don’t even look at the eastern states as the market has not bottomed out yet (in my opinion).
As for shares, don’t even think about it……the market in Australia doesn’t have the legs to continue at this level of growth. If I were you I’d definately keep in simple and do some more research.
The ASX website is good for education. So too is Motleyfool which is an American website. They seem to have their finger on the pulse, if you intend on looking at the American markets.
Good LuckThanks for the tip Interceptor!
“If you are looking at property in Perth then I would go for it. Mining boom may have the legs for another 2-3 years, so that means investors over that way will be cashed up” – I was hoping for the perth property to finish its boom and hit its low so I can start buying at discount without SOO much buyers in the market.
Its tough with smart, not so desperate sellers, limited supply of homes and abundant buyers.
For those who would like to take Hong’s 50k and invest it in shares.
The ASX Sharemarket game starts on 23 Feb.
You have a hypothetical 50K to trade over 10 weeks. Perfect for those wanting to do a bit of paper trading.
Sorry Hong there is no options trading though.Mal
Getting out of your comfort zone, can help you become comfortable
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