How would you invest $5000 right now?

Jefferson said:
10% of the account is a small trade? Don't you mean 2 or 3%?

If you open an account of USD 500 (not 5000) and you risk 2% you can make 35 losing trades and still your account is not wiped out. Nobody has a losing streak of 35 trades. Nobody. Not if they use a proven system.

Do the maths, calculate it in a spreadsheet. The numbers don't lie. 500 dollars, risk 10 on each trade, with 35 losing trades your account is not wiped out.

People lose their account because they don't calculate their stop loss properly. If you risk 2% per trade you won't wipe out your account even if you make 35 false trades in a row.
Cool stuff bro. Let's see your audited brokerage statements then.
 

RatInTheWoods

Hummingbird
Gold Member
the-dream said:
So what would you invest $20k in, Rat?

In Australia, I buy bank shares (they on sale at the moment) they have a 4% dividend each year and odds are to sit on a 3-4% capital gain over the next few years.

3-4% term deposit?

These might seem a bit safe and boring, but at the moment, I am a bit worried about investments, I feel a storm coming.
 

Australia Sucks

Kingfisher
Really? Bank shares? There are so many better shares to buy in Australia then the stodgy no growth (earnings per share are likely to go backwards over the next few years) banks!
 
Jefferson is right. 2-3% is the right way to learn.

Then again, I'm more ballsy and do more swing trades, rather than day trading.

5k is a good amount to start, and sticking to the 2-3% rule is the safe way to go. Cut the losers, and let the winners run.

With all of that, don't plan on really multiplying your account, as you will most likely lose money. Its learning
 

pk9090

Robin
From my humble opinion I would either start my own business or travel.

If you're young those things are awesome and I feel will be better for you in the future.
 
Well, I would rather invest in forex. If we are talking in a broader sense, we cannot really make a comparison on which one is riskier. If we start talking about individual instruments within each market, then it starts making more sense. Both stocks and equities are comprised of ‘individual’ instruments that will exhibit distinctive volatile characteristics at times. In the case of currency markets, think of the Sterling ahead, during or after the Brexit shocker. That led to a major period of volatility, especially in GBP. Now we are seeing the opposite, with compressed volatility in forex, while stocks in the US and globally see huge spikes in price movements as reflected by the VIX index (or fear index), which trades at the highest level in months. There is a re-adjustment of US assets fleeing stocks into cash allocations as the investment in higher global bond yields become more appealing. Bottom line: You must be pragmatic and first define what type of investor or trader you want to be. Are you a short-term, swing or position trader? What type of exposure are you looking to have? Instruments to trade? There are many questions you must fill in the gaps with. Once you can find an answer to each one, you will be better positioned to make a judgment call in which one is riskier. If you find that forex can be an interesting venue to give it a go, I am happy to provide you with a list of Forex Brokers that provide an opportunity to open your own PAMM-account or choose one from the pool and invest into it [spam link]
 

Repo

Hummingbird
chrisblackbeard said:
Jefferson is right. 2-3% is the right way to learn.

Then again, I'm more ballsy and do more swing trades, rather than day trading.

5k is a good amount to start, and sticking to the 2-3% rule is the safe way to go. Cut the losers, and let the winners run.

With all of that, don't plan on really multiplying your account, as you will most likely lose money. Its learning

Only if your not paying transaction fees or that alone will drain your account. . . 2-3% of 5000 is a very small trade.
 
FraddyD said:
Well, I would rather invest in forex. If we are talking in a broader sense, we cannot really make a comparison on which one is riskier. If we start talking about individual instruments within each market, then it starts making more sense. Both stocks and equities are comprised of ‘individual’ instruments that will exhibit distinctive volatile characteristics at times. In the case of currency markets, think of the Sterling ahead, during or after the Brexit shocker. That led to a major period of volatility, especially in GBP. Now we are seeing the opposite, with compressed volatility in forex, while stocks in the US and globally see huge spikes in price movements as reflected by the VIX index (or fear index), which trades at the highest level in months. There is a re-adjustment of US assets fleeing stocks into cash allocations as the investment in higher global bond yields become more appealing. Bottom line: You must be pragmatic and first define what type of investor or trader you want to be. Are you a short-term, swing or position trader? What type of exposure are you looking to have? Instruments to trade? There are many questions you must fill in the gaps with. Once you can find an answer to each one, you will be better positioned to make a judgment call in which one is riskier. If you find that forex can be an interesting venue to give it a go, I am happy to provide you with a list of Forex Brokers that provide an opportunity to open your own PAMM-account or choose one from the pool and invest into it [spam link]

Excellent post and totally agree.

You can not start an online business with 5000 dollars, mine cost 80,000 over the initial two years. Forex is the best option with 5000 USD.

Yes, forex is risky, but as with all investments the reward is proportional to the risk. And with risk management you can minimize risk.

However, as Repo correctly says, 2% or 3% is a small trade. Again, the less risk the less reward. The more you risk, the more reward.

Now, if you have an account of say 500 dollars, would you stick to the 2% or 3% rule? Not at the start. You could risk 10% at the start, what would you lose, 50 bucks? The cost of a meal? Who cares. But if you win, and you compound the money won you can turn an 800 dollar account into 55K in two weeks. It's not typical, but it has been done. Ninety per cent of forex traders lose money. However, 10 per cent make money, because they have a proven strategy, put in hard work and manage risk/reward sensibly.

Of course transaction fees will not drain your account, unless you're dealing with the broker from hell.
 

Parzival

Ostrich
There are several set ups:

First know your expenses. Can you cover them?
Is there any open depth on your account? Pay it.
Do you have some liquid cash for unexpected expenses? Something that can cover a broken washing machine, some car that need a fix and so on. I consider to have 3 - 6 months salary stock in cash a good things. It is bad when you invest money and out of sudden you need to pull it out.
Did you do your long term saving / investment?
Just after that I would seek where I can afford some extra investment of the money.
 
I would do one of three things:

1. Pay off all my credit cards and loan debts.
2. Buy a decent PC, a DAW and a ton of VSTs, along with a guitar, a bass and a synth or two. I'm making my own music in 2019 so being able to get all that in one go instead of in stages would be handy.
3. Live off half of it while I spent the other half on advertising an online business or affiliate offers.
 

General Stalin

Crow
Gold Member
Praetor Lupus said:
...

3. Live off half of it while I spent the other half on advertising an online business or affiliate offers.

How long you looking to live? $2500 is maybe one month worth of living expenses in any decent city (at least in the US).
 
General Stalin said:
Praetor Lupus said:
...

3. Live off half of it while I spent the other half on advertising an online business or affiliate offers.

How long you looking to live? $2500 is maybe one month worth of living expenses in any decent city (at least in the US).

My expenses are lower than a lot of others, granted. I could make it stretch to maybe three months. I'm more likely to go for either of the first two choices.
 

RatInTheWoods

Hummingbird
Gold Member
Australia Sucks said:
Really? Bank shares? There are so many better shares to buy in Australia then the stodgy no growth (earnings per share are likely to go backwards over the next few years) banks!



I think the banks will upswing in the next 12 months.

Fortesque, TOE, wollies all gone to shit.

Pick me a share AS, I'll drop $20K on it.
 

Mig Picante

Woodpecker
I'm pretty keen on the idea of investing 5k, or actually growing my 5k to 10k as quickly as possible.
I started a new job working long hours, so it will most likely be from saving like a monk. The upside is I'm almost forced to save.

I reduced all my recurring expenses, lowered all my bills and got cheaper car insurance which saved me ~$400 already.
The next thing is to avoid unnecessary spending, and drive that into savings.

When you realise that 5% on 5k is only $250. You start to look for better ways to make $250!

Giving up alcohol would be a quick way. Stopping buying lunch at work would help too, I want to set myself up for the future.
Longer term, I'm thinking about registering a company for investing to take advantage of lower corporate tax rate. BUT there's no 50% CGT discount after 12 months, there's recurring fees each year and you can't just make personal drawings. It will have to wait and I will have time to consider that approach as I save up the capital.

For ASX stocks I like RFF, but the returns don't work out at higher marginal tax rates, so i haven't bought. Maybe ex dividend it will fall back to an attractive yield and I will consider buying.

CCP another one I like. The way I see it, it would benefit from the economy doing worse while consumer spending stays the same.
 
Now I'd like to hijack this thread. How'd you invest $100K? If this is most of your net worth. I'm thinking half of it for a down payment on a mortgage for an apartment. The other half would ideally go to starting a business but I still have no idea.
 
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