Invest R70k - which share

[WES]

Pinnacle ?

[#2]

Well - the size of the investment dictates the strategy somewhat. R70k is too small to spread your risk - you can maybe take R10k sized bytes of 7 stocks - but nothing smaller than this. So you are left with FEK's original plan of a single stock - in which case you can really only apply a value investment approach (Buffet would argue that a single well selected stock is better than a basket of 10) OR you take an ETF and spread your risk. CFD's are short term instruments (6 months to 1yr) nothing more. You will lose money long term with a CFD, because a) the interest is charged on your total exposure and b) you will be taxed as revenue, and not a capital gain.

[SimonPB]

Pretty much all of those are guaranteed money over time ah but that the crux, what time and what draw down ??

[#4]

if I knew that I would be a billionaire in a couple of months....thats why you do portfolio allocation and risk management.

[#5]

I wouldnt just writeoff a trade because I dont know what the drawdown would be....thats like saying never trade a system cause you dont know what the new max drawdown will be, you work around it cause you believe in the system.

[SimonPB]

draw downs don't stress me but they stress most people .. time way way more important .. If it takes Rand 5 years to get to R15 you better off in the bank .. ditto others (and the 45k short may never make money)

[#7]

which is the better stx40, BBET40 or are they about the same?

[#8]

I know what you saying about time, % per annum is important, but your strategy is just as important. For instance when Im right about a fundamental call, my strategies manage to make a 200% return, working with a very small amount, low risk high return. Most people on the same call would only make 20%, cause of many reasons, (like they cant hold a position for more than a week). My style is very similar to how Buffet made his money, I just applied it to trading, rather than investing.

As far as 45000 short not making money...if it didnt it would be the first time in history that these set of variables wont make money. I wouldnt bet on "this time its different"...its not a matter of if, its a matter of when.

[partridge]

The answers to this ill-shaped question have been revealing.

[SimonPB]

same stocks but BBET40 has them in equal weight, hence why I prefer

[Rams]

Ellies,thank you,thats the one I been looking for

[Preston]

@Siimon, equal weighting does not provide you with the greatest diversification ratio.

[Preston]

why?

[SimonPB]

how so ?? it does mean you aren't putting half your money into 5 stocks as is the case with STX40 .. so in that sense much better diversification ..

[Preston]

@simon...how so? ...refer to the e-mail and the attachment i send you aboutt 2 week ago. This principle is explained really well. Diversification ratio of equally weighted portfilio vs Diversification ratio of randomly selected portfilio.

[#16]

diversification is a bit of a fools game...as Buffet even said do the homework properly, put your eggs into 1 basket and watch that basket carefully. Most people pick blindly and simply rely on diversification, hoping a shotgun approach works for them whereas they actually just giving up returns as well. (That doesnt mean I pick 1 share, but I dont pick 40 either). omo.

[Preston]

@BC ,Diversification ratio in term of Standard Deviation and Mean return.

[geordie1]

bear in mind our share prices are currently high-I heard somewhere that average pe of top 40 shares is" 17 and average is 13".so generally speaking u could say our shares are around 30% abover there average.so if u want to take high risk and buy low then African bank and pinnacle are options_could lose of course but will be a white knuckle type of ride.if u are the patient type u could sit on your hands and wait for the correction that a lot of bears are calling."if market falls 40% then that would be a signal to buy-most people panic if that happens but in fact its a wonderful buying opportunity>if u can control your fear of course.otherwise satrix seems to me quite a steady conservative alternative

[Rams]

FEK, if you want one share,SHP, though i prefer the price at around R140,at current levels, is good to start accumulating.

[Rams]

if you not willing to chance the "Mad Money Portfolio"!....well thats it,SHP at R140 will be the 5th share in my "Mad Money Portfolio" of 5 sahres.