Finding a reputable investment firm

[two fingers]

Was thinking it might be time to dip the toes (slowly) into the stock market as it looks like the ice is melting.

Now from the reading I've done a person can go it alone and do their own trading on hunches... but the research seems to suggest that that's not a very profitable, if at all, method to employ.

What I'm looking for is a solid investment firm that does the investigation and calculations to arrive at a balanced portfolio...

Any suggestions on where I can go to find such a firm or place that rates such firms

Hopefully this query makes sense, I don't know how to put it any other way.

[Pheonix]

No free lunches here I'm afraid, if you want one it will cost you (and I mean COST):oo:

[Christopha]

I know very well some very astute people who have just lost a scary amount of capital on the stock market so why on Earth would a newchum like yourself stick their head in the oven??? Either your post is Spam or you are looking to make a dill of yourself.

[Calm]

I agree that the stock market is not likely to fall further (it is probably at the bottom) so in theory now is the time to buy.

BUT

the danger now appears to be - which companies will still be around when the consistant rises start.

That is the danger.

Oh and by the way - the last place i worked was advised by Macquarrie bank as their investment manager and they managed to change 900,000 into 700,000 in about 5 months..

good luck

[rrich]

"Finding a reputable investment firm"

Isn't that an oxymoron?

[Pheonix]

Platinum, only one that made money when all the others were losing it

[corbs]

Why assume its spam? I have a few thousand $$$ sitting in an account and have been thinking the same thing for a while. Shares like the Commonwealth Bank which were nearly $50 a share dropped to around $25 early in the crisis have a fair bit of potential. As already indicated, the skill is knowing what will survive the crisis and go on to make money. Commonwealth is back up to nearly $38.

[Lignin]

OK, I'll give you the name of my investment advisor (without his permission)
He is a conservative investor on my behalf, and will not go stupid with "penny ante" junk.So far, he's lost me less than the market.
Ring Ian Fraser,
Carthills,
Upper Mt Gravatt
Qld
07-38496392

Tell him Steve Biko sent you, and he'll know who to blame!!

[Rocker]

Rather than relying on expensive advice on which individual stocks to buy, you can buy units in an index fund, such as Vanguard, which tracks the entire Australian stock market. This is an investment strategy advocated by Warren Buffett, the Oracle of Omaha. Over the long term this strategy is virtually guaranteed to make you money, since the long-term trend of the stock market is upwards (see http://au.finance.yahoo.com/q/bc?s=%5EAORD&t=my for a graph of the All-ordinaries over the past 25 years). Now seems to be an excellent time to invest.

Rocker

[two fingers]

I agree that the stock market is not likely to fall further (it is probably at the bottom) so in theory now is the time to buy.

BUT

the danger now appears to be - which companies will still be around when the consistant rises start.

That is the danger.

Oh and by the way - the last place i worked was advised by Macquarrie bank as their investment manager and they managed to change 900,000 into 700,000 in about 5 months..

good luck

Hi Calm

Could you expand on what you mean my which companies will be around when the consistant rises start.

[two fingers]

Why assume its spam? I have a few thousand $$$ sitting in an account and have been thinking the same thing for a while. Shares like the Commonwealth Bank which were nearly $50 a share dropped to around $25 early in the crisis have a fair bit of potential. As already indicated, the skill is knowing what will survive the crisis and go on to make money. Commonwealth is back up to nearly $38.

That's kinda where I was going but didn't want to write a book to start this thread.

I could buy a truck load of bank stocks and hope they keep going up but that would be a very unbalanced portfolio and subject to a much higher risk than if I were to find an investment firm that did the needed research to find other stock(s) that were negatively correlated... thus reducing the risk of investment over time.

As I touched on very briefly earlier a number of academic studies have found going it alone and relying on historical data to make investment decisions is at best a large gamble where the vast majority actually lose money. Yes people are losing money right now but to be honest most should have seen this coming as it was (though much over due) a normal part of a businesses (investments) positive and negative cycles. As Buffet said be scared when most are greedy and be greedy when most are scared. Unfortunately most it appears were being too greedy and ignored the signs that were years in the making. I can remember exactly when and where I was when I realized it was time to begin looking to ways of protecting my investments. I was sitting by the pool at a hotel in Anaheim California reading the real estate section of the LA times in 2005. It was to me very clear that the storm clouds were beginning form. All I can say is I'm glad I listen to my hunch... I tried to tell my friends and associates to watch out but everyone was in full greed mode and thought I was a complete idiot. In this economic crisis I haven't lost a cent. In fact I'm in positive territory, not by leaps and bounds but still moving forward.

What I would like to do is find a firm that does their home work by employing both historical data and present information (and a bit of inside information thrown in for good measure) to determine a sound direction. Managed funds are along those lines but I'm looking to take a bit more risk than that... I would love to have a piece of Buffets Berkshire stocks but it doesn't appear they're available to australians.

[two fingers]

Rather than relying on expensive advice on which individual stocks to buy, you can buy units in an index fund, such as Vanguard, which tracks the entire Australian stock market. This is an investment strategy advocated by Warren Buffett, the Oracle of Omaha. Over the long term this strategy is virtually guaranteed to make you money, since the long-term trend of the stock market is upwards (see http://au.finance.yahoo.com/q/bc?s=%5EAORD&t=my for a graph of the All-ordinaries over the past 25 years). Now seems to be an excellent time to invest.

Rocker

Hi Rocker

That's probably a better way of putting what I may have been meaning. I'm a foreigner so what I know doesn't tend to (how do I say) translate well into what's practiced here so I'm a bit lost as to direction to go.

I'll give that link a look thanx

[Calm]

Hi Calm

Could you expand on what you mean my which companies will be around when the consistant rises start.

- THIS IS MY OPINION ONLY - THIS IS NOT ADVICE FOR OTHERS TO FOLLOW -

At the moment the share prices are going up one day then down the next - what i mean is when it starts to rise without the falls/adjustments that have followed after a couple of days.

Take a couple of high profile companies and tell me if you think these will survive.

General Motors - are they secure, would you buy shares in them?

Rio tinto - BHP pulled out of their proposed merger, (from the outside) they appear to have a lot of liabilities that are frightening purchasers off - will they be there in 3 years time, will the mining boom resume? when?

Some of the insurance companies have been hit pretty hard lately how good are their assets?

Hope that explains it a bit better.

Cheers

[Calm]

Hi Calm

Could you expand on what you mean my which companies will be around when the consistant rises start.

What i meant by the investment company my work chose was at a meeting (August 2007) of the bosses, myself (the acountant) and the advisors, when they proposed/advised a 80% shares 20% term deposit investment portfolio i said that present data indicated that now was a time to be cautious but alas they knew better so the $900,000 was invested on their recommendation, in Feb 2008 it had shrunk to about $720,000, but i didnt tell them i told you so i just let it go.

There line was that historically shares always go up well i can tell you they are now starting from a base of about $600,000 whereas if they had of listened to me (20% shares 80% term deposits) there base would be about $850,000 or even still the $900,000.

My point is why take the losses if you can see them coming and change your investment strategy to avoid the big falls.

Just my 2 bobs worth.

Cheers

[two fingers]

- THIS IS MY OPINION ONLY - THIS IS NOT ADVICE FOR OTHERS TO FOLLOW -

At the moment the share prices are going up one day then down the next - what i mean is when it starts to rise without the falls/adjustments that have followed after a couple of days.

Take a couple of high profile companies and tell me if you think these will survive.

General Motors - are they secure, would you buy shares in them?

Rio tinto - BHP pulled out of their proposed merger, (from the outside) they appear to have a lot of liabilities that are frightening purchasers off - will they be there in 3 years time, will the mining boom resume? when?

Some of the insurance companies have been hit pretty hard lately how good are their assets?

Hope that explains it a bit better.

Cheers

That great thx

As always opinions should only be looked for what they are - opinions but over all a good thing as they can give a different perspective that one hadn't thought of before and therefore something else to think about.

[Rocker]

There line was that historically shares always go up well i can tell you they are now starting from a base of about $600,000 whereas if they had of listened to me (20% shares 80% term deposits) there base would be about $850,000 or even still the $900,000.

While it is true that, historically, the long-term trend of the market is upwards, you can obviously lose money in the short- or medium-term if you invest a large sum at the top of a market cycle. To overcome this problem of timing the market, the index fund strategy is to invest smaller fixed sums at regular intervals, rather than trying to time the market's highs and lows. It takes some discipline to keep on making the regular investments during a declining market, but, over the long term, the strategy is bound to be successful, so long as it continues to be the case that the long-term trend of the market is upwards.

The fact is that very few analysts predicted the long decline that the market suffered from late 2007 until March 2009, and fewer still predicted that the bottom would be reached then. As Calm has shown, even with the advice of highly regarded experts like Macquarie Bank, it is easy to lose money if you invest a large sum all at once, if you happen to do so near the top of a market cycle, since timing the market is all-but impossible. The prudent strategy is to invest fixed sums at regular intervals, ignoring market cycles.

Rocker

[Calm]

......................The prudent strategy is to invest fixed sums at regular intervals, ignoring market cycles.

Rocker

This is the very point that i have trouble agreeing with.

In 2007 i could see signs that the market was in trouble so my thought was.

Put a major part of your ivestment in Term deposit - Cash - it will increase albeit slower than it has in the share market. Then when you think the market is more stable get back into shares. Had they taken my advice/thought there would be 900,000 to now invest instead iof the 650,000 that they have.

it will take them 3,4 or 5 years to get back to where they were, whereas with my thoughts they would by them have 1.2 - 1.4 million

My freinds asked me about their Superannaution and i told them to change to a "cash" (low risk) investment strategy - the ones that rang their funds and changed still have all the super they had in 2008 - how many people can claim to have that. If you have the option to change investment strategies there is no need to "take" the lows if you see them coming.

At teh same time i dont think you do that well if you keep chasing the highs either. You have wins but you also have losses

Cheers

[two fingers]

The highs and lows that you both are talking about (irrespective of this financial blow out that has occurred) are what I would like to try and avoid. That sort of scenario can only be accomplished with a vast amount of expensive data collected and deciphered by a skilled investment firm where they can apply such information and create balanced portfolios for their clients. Ideally the theory is that you have stocks that are offset against each other so as one may fall, in the short term, the other is increasing but over all they are both increasing over the long term. An individual and or small investment firm most often don't have access to the data and or resources to determine first hand what stocks are capable of making up a balance portfolio - at least in most cases... So my original query is to try and find those firms that have such a reputation. As has been seen a great deal in this country a lot of investment firms, especially the small ones, have vanished - with all the money they took in.

[Rocker]

Calm,

Obviously your strategy of investing in term deposits during market declines and in shares during market appreciations is fine, IF you can pick the top and bottom of the market. However, succeeding in picking the top and bottom is a lot easier in hindsight. If your company had invested its $900,000 in various term deposits with differing maturities, and then had bought index fund units in regular amounts of say $50,000 as the deposits matured, they would have lost some money in the short term while the market was still declining but those units would rise in value again as the market bounced back. It all depends on the time-scale over which you plan to invest. If you plan to invest over ten years or longer, the index-fund strategy is virtually certain to produce positive returns over that period; whereas if you pursue a strategy of trying to time the market tops and bottoms, you may succeed, if you are lucky, but you may also lose. This link explains the philosophy of investing in index funds better than I can: http://www.vanguard.com.au/shadomx/apps/fms/fmsdownload.cfm?file_uuid=05981A6C-1E4F-17FA-D21B-0786ED461C91&siteName=vanguardaus .

If your time-scale is five years or less, it is best to pursue the low risk strategy you suggested, of having the bulk of your investment in term-deposits.

Rocker

[Tex B]

I started buying some shares in an exchange traded fund recently, and have been pretty happy with it. Basically, they buy the ASX 50 or ASX 200. If companies are dropped or added from the index, the fund adjusts accordingly.

These are funds you can buy and sell on your own through etrade or comsec or whatever broker you use. Low fees, etc as an index fund, with the bonus of being traded like shares.

The one I bought was STW (http://www.spdrs.com.au/)

Tex

[kiwigeo]

While it is true that, historically, the long-term trend of the market is upwards, you can obviously lose money in the short- or medium-term if you invest a large sum at the top of a market cycle. To overcome this problem of timing the market, the index fund strategy is to invest smaller fixed sums at regular intervals, rather than trying to time the market's highs and lows. It takes some discipline to keep on making the regular investments during a declining market, but, over the long term, the strategy is bound to be successful, so long as it continues to be the case that the long-term trend of the market is upwards.



This is an old concept called "dollar cost averaging" and its something an individual investor can do. It's a strategy that is most succesful when investment is over a long period of time (10 years +).

[Cruzi]

With a lot of so called losses, you should understand also that it is only a notional loss until you sell your assets.

Unless you have your money in a bank account, any investor in any market should be ready to lose value once every 7-10 years.

Sure the stock market fell in last year or so but compared to growth gained in last 10 years it is nothing in larger scheme of things.


If you are a panicky investor who wants to sell the second your shares lose value, then stocks are not for you, if you understand what a stock is, ie a share of the ownership of a company and you buy into a good company for the long term, then stocks are for you.

In grand scheme of things, stocks (good long term stocks), have out performed cash and real estate for well over 100 years. The main problem with stocks is people get greedy and want to double their money overnight, what you should do is look at what returns you are getting now and see how they can be improved.

Do not follow gurus, they like to manipulate the market to further themselves, sure Warren Buffet made a lot of money but he did the right way, not by investing in managed funds, (which he makes a lot of money from managing for others) but by buying good shares when they were down.

Finally spread your funds, have real estate, have precious metals, have art and collectables, have cash accounts and importantly have stocks, because when one is down at least one of the other sections will be up.

[two fingers]

Do not follow gurus, they like to manipulate the market to further themselves, sure Warren Buffet made a lot of money but he did the right way, not by investing in managed funds, (which he makes a lot of money from managing for others) but by buying good shares when they were down.


It's interesting what you say but isn't Buffets Bershire stock in essence very similar to a manage fund.

There are so many that have written books and articles on Buffet and touting that they have cracked his secrets and know his strategies. But! none have duplicated it and or even remotely come close to his success. Says a lot about how much they really know about the man doesn't it.