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Thinking of investing in Shares, what are some safe choices?

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#1 mrs

Posted 08 February 2017 - 12:54 PM

Hi mums,

I'm thinking of investing in some shares, I have saved what was going to be a house deposit, but this seems out of reach now with the current Sydney market and unaffordable for us at the moment, given up on that dream for the time being.

I want to invest in something that is very safe, so thinking blue chip company, never have invested before, currently get 2.87% interest from bank.  What would you suggest I invest in, should i split 10k here and there to different companies.

How do they pay, is it monthly like bank interest, pretty clueless, love to hear your success stories.

TIA :)

#2 CallMeFeral

Posted 08 February 2017 - 01:21 PM

Sorry I've no idea of what to invest in, but in terms of how they pay, most shares pay a dividend once or twice a year. If you get a 'growth' share, the dividend will be minimal or absent, and you are counting on it being worth more when you sell and getting your benefit that way (if you keep it for over 12 months you get a 50% discount on the gain made). If it's an 'income' share the dividend will be larger, but the gain when it's sold will likely be smaller.

Have you signed up with a broker? You would need to do this to buy the shares, and there are transaction costs. An alternative is to sign up to a managed fund, that does the investing for you, but of course there are costs there too.

#3 Fresh Start

Posted 08 February 2017 - 01:31 PM

Please don't take advice  on what to buy from EB.

You should see a financial adviser and discuss your appetite for risk etc to work out where best to invest.

#4 OrchidFlower

Posted 08 February 2017 - 01:41 PM

Agree with PP. Don't take advice from here. All I will say is the big 4 banks are relatively safe. I have friends who have lost thousands on the share market from so called good 'tips'.

#5 Mumtotwo13

Posted 08 February 2017 - 01:46 PM

I agree, see someone qualified to give advice. It doesn't hurt to read up though, I've started learning about exchange traded funds 'ETFs' which you could google.

#6 Akadia

Posted 08 February 2017 - 02:00 PM

I also agree, just on face value it appears you do not have an appetite for shares - they are inherently risky.

Definitely seek advice from a financial planner. They'll be able to assess your family's risk appetite and advise on the appropriate course of action.

#7 JennaJ

Posted 08 February 2017 - 02:10 PM

There is no such thing as safe shares as there is a risk that you will lose your capital based on so many factors and there is certainly no guarantee the returns would be more than what cash is offering. Maybe do some more research first eg how much risk are you willing to accept? What would you do if your portfolio achieved a negative return? What is the big picture goal? So many variables.

#8 Grrrumbles

Posted 08 February 2017 - 02:12 PM

Shares often need a longer investment term than other assets to be worthwhile. There may be better places to put your money for the short to medium term.

Its great that you are starting to learn about investing, don't feel discouraged that you don't know much at the start. We all have to start somewhere and financial literacy is worth the time.

Try to educate yourself as much as possible. ASIC's Money Smart website is a good starting point. It won't tell you what is best for you but it will help you understand how to evaluate different options and how to avoid scams.

Understanding the basic terminology and also what "risk" is and its relationship to returns before you start talking to financial advisers/salespeople is important.

#9 bonnybabe

Posted 08 February 2017 - 02:18 PM

shares should be invested for 30 years or longer to ride out the ups and downs... that's a long time to lose your savings.

#10 (feral)epg

Posted 08 February 2017 - 02:42 PM

If you want to invest in shares either go through a stockbroker (but be prepared to pay some fees), or spend a few hours educating yourself.

When I started (20 odd years ago) I found the Noel Whittaker money books pretty straightforward to read so I'ld recommend something like that as a starting point.  It's also worth having a look around on the main bank share trading platforms (I use ANZ share investing, I think most of the banks will have one) as there's quite a lot of information there.

Then, depending on how much money you've got, try and find 5 or so companies that you 'like' anyway.  As a general rule large, stable companies that a lot of people deal with every day are going to be low risk prospects - banks, utility companies, large manufacturers, supermarkets etc.  If you're quite risk averse then you probably want at least 50% of your money in these sort of companies.  Then keep some money aside in a 'no risk' investment e.g. a term deposit.  Once you're a bit more comfortable then you can target some higher growth shares like smaller companies.

Another option to reduce your risk would be to invest in an index fund - these are essentially managed find that directly track the share market (or a specified part of it) so you're not trying to pick winners or losers.  You pay a small management fee (much less than other managed funds) but gain a much broader and more representative exposure to the market than you can as an individual.

#11 catlady123

Posted 08 February 2017 - 02:49 PM

We have chose to invest into Argo, AFI and Milton. I would personally consider these relatively safe, long term choices, but received this advice from professionals. I definitely think you should go have a chat with a financial adviser about how much you're willing to invest, risk, benefits, etc.

#12 aligirl

Posted 08 February 2017 - 03:35 PM

The ASX Sharemarket game is about to start - they are taking registrations now. You get a fictional amount to invest. Perhaps you could give that a go and see how you feel after that? asx.com.au

#13 Ally'smum

Posted 08 February 2017 - 08:22 PM

I was going to suggest ASX as well, there is lots and lots of reading to do so I would suggest that. All of the banks have brokerage platforms so you can trade through there, you don't need an actual broker. They also provide a lot of information.

I think I spent about three months reading before I bought anything, as pp mentioned, the Noel Whittaker books are good place to start.

The first question I would ask though is 'are shares the right investment vehicle for you?' If you want to pull your money out to buy a house then you might need something more short term.

My success story was that I made some money a few years ago trading (not investing really) and that went towards my house deposit, but the down side of that story is that I spent a lot of time doing it, and now that it is in the house I don't have money to trade with...

#14 alchetta

Posted 09 February 2017 - 02:49 AM

Another suggesting you speak to a financial advisor... you have to be prepared to set and forget as they will likely move around a lot, which won't be indicative of long term performance. Big 4 is commonly seen as safe but in this day and age I don't have much faith in anything!

If you're able to deposit $1k a month into a savings account, ING will give you a 3% interest return on their savings maximiser (not even a term deposit!) which I think is about the best out there at the moment but I'd be more than happy to be corrected.

#15 McG2013

Posted 09 February 2017 - 02:56 AM

Definitely get yourself some professional advice. I suggest trying to find an independent broker. If you're looking for low risk, maybe consider bonds rather than shares. Lower returns but less risk. Also don't forget that if you invest, there are NO guarantees that you will make money or even get the original amount you invest back. Have you thought about basic term deposits if you don't plan to invest long term, e.g minimum 10 years?

#16 beccaj

Posted 09 February 2017 - 03:48 AM

I will have to agree with shares are not a 'safe' option especially if short term or looking at holding savings.

There are many investment options available, get some recommendations for a great financial planner or consultant and have a look around. There is gold, smaller properties, shares, managed funds, term deposits.

#17 gabbigirl

Posted 09 February 2017 - 09:57 AM

After years of researching shares etc and doing some trading, my best advice would be to subscribe to a shares newsletter.  My favourite is Marcus padley.  he has a range of different porfolios depending on your goals.

I would only invest money in shares that I would be prepared to lose.  So probably about 30% of your lump sum.

If you can sleep at night, invest in Telstra as their dividend is great.

and the best thing i've learnt, taking advice from randoms has cost me the most !!!

good luck.

#18 8mimi8

Posted 09 February 2017 - 04:35 PM

Hi op,
Some great advices from pp. If i were you, i would force myself to read minimal 5 books before my first purchase.
My fav is :
Roger kinsky - online shares or australian shares couldnt remember the title. This provides the nitty gritty of online brokerage system, jargons and record keepings stuff and also some formulas for valuing shares . Basically this book is like an operation manual for share investing via online brokerage

Buffetology - simplified version of the how and whys of Warren buffet

Buffetology workbook - chronological worksheets based on chapters from buffetology

Peter lynch , one up on wall street.
Very easy to read and enetertaining, excellent approach on looking for good buys

Australian share investing the asx way. Very basic and provides good understanding for the beginner

Then find a cheap online broker, i use cmc..they do the job and make your first investment..its exciting and good luck

#19 sandgropergirl

Posted 09 February 2017 - 04:59 PM

Join the Barefoot Investor - its online.

#20 mrs

Posted 09 February 2017 - 06:28 PM

Thanks for the great advice everyone maybe shares aren't for me, it seems so time consuming which I don't have much of these days.  I will go to an adviser but.

Edited by mrs, 09 February 2017 - 06:28 PM.

#21 AsperHacker

Posted 09 February 2017 - 06:48 PM

 mrs, on 09 February 2017 - 06:28 PM, said:

Thanks for the great advice everyone maybe shares aren't for me, it seems so time consuming which I don't have much of these days.  I will go to an adviser but.

I think you're right. Actively investing in shares is either a long term strategy or a trading strategy - which you do need to put the time and effort into. It's not a get rich quick (or even make a few dollars quick) strategy. If they're not your plans then a term deposit is probably a better option.

#22 Nastyflea

Posted 09 February 2017 - 08:42 PM

We have some money in a term deposit.
Dh looks at the best interest rate at renewal time to see how long to renew it for.

We also have some shares(NRMA and NIB) that we got when the companies floated on the exchange and we had policies with them, but they'll never make us rich!

#23 Toby_

Posted 09 February 2017 - 08:53 PM

Check out the Barefoot Investor - lots of good advice.

#24 Overtherainbow

Posted 09 February 2017 - 09:34 PM

If you're looking at investing your deposit it is a large amount where you would want limited risk.  You need professional advice or to seriously educate yourself.

Libraries have wonderful books on personal finance and investing in shares.  

I started small, using info in books and utilising advice from researchers with my online trading company.

Don't see it as a quick rich scheme and expect there will be years you go backwards.

Some great terms to know are dollar cost averaging and price earning ratio.

#25 ~river song~

Posted 09 February 2017 - 09:50 PM

Keep saving and buy a house. Anything, something. Don't invest until you've got the security of a home and don't put the deposit into the share market. You'll find most financial advisors will tell you the same, I've spoken to three independent in recent times with the same advice.
But in saying that get your own independent advice too

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