who would you invest 2.5K in?

alexlyons

Just wondering what you people would invest an absolute max of 2.5K in? I have this funny tendency to go for the cheap shares, obviously with a lot of research, as they have a way higher chance of doubling etc, eg if I was to go for CRH, although they are pretty low for them, there not going to hit €36 in the medium term, where as it's much easier for something like Aer lingus for example, to hit ¡.75 in the medium term.

So based on that theory, what would be a few companies you'd look at with that money? Or blow that theory out of the water...

pog it

Yep the logic is good- 2.5k on CRH shares at that price isn't a great plan. Aer Lingus look cheap but I still personally wouldn't invest in them, doesn't mean to say you shouldn't! See what I mean?

alexlyons

i do indeed, the reason i was saying it is that with larger sums of money, if they were to go back up to €27/28 then 50% is a fair whack to make, but not so much with 2.5K... i think im thinking of AIB, Fyffes, glanbia, greencore or irish life... ideally something like kenmares price is what you want, very low...

anyone any thoughts on those companies just as a basis to go by?

pocketdooz

alexlyons wrote: »

I have this funny tendency to go for the cheap shares, obviously with a lot of research, as they have a way higher chance of doubling etc, eg if I was to go for CRH, although they are pretty low for them, there not going to hit €36 in the medium term, where as it's much easier for something like Aer lingus for example, to hit ¡.75 in the medium term.

You're thinking about this all wrong.

Because a share is €5 and another one is €25 does not make that one cheap vs. the other one or vice versa.

It's the Company that is cheap, not the share. Remember that companies don't have the same amount of shares in issue as each other. So a company with a €5 price and 2,000,000 shares in issue would be much bigger that a company with a €15 price and 200,000 shares in issue (€10 million market cap vs. €3 million market cap).

So, for a simple example - WPP shares (the largest media and advertising company in the world) trade for only £6.88 per share and Brenntag (the world's largest chemical distributor) trades for €55.00 per share. However the market caps are £8.5 billion vs. only €2.8 billion. WPP is between 2 and 3 times the size of Brenntag.

So, you have to get it out of your head that because a stock price is a small unit (€1 - €10) and another might be large (€25 - €100) that has no relation to whether or not it is cheap, dear, undervalued, overvalued etc.etc.

So, you're example of Aer Lingus vs. CRH carries no weight at all. The only way to figure out where a company is valued is by working out the Enterprise Value of it vs. the industry and competitors or using other types of calculations (DCF, P/E etc.etc.) and has nothing to do with the unit cost per share whatsoever.

Hope this helps.

.

pocketdooz

alexlyons wrote: »

i do indeed, the reason i was saying it is that with larger sums of money, if they were to go back up to €27/28 then 50% is a fair whack to make, but not so much with 2.5K... i think im thinking of AIB, Fyffes, glanbia, greencore or irish life... ideally something like kenmares price is what you want, very low...

anyone any thoughts on those companies just as a basis to go by?

Oh, by the way, sounds like you just want to gamble and try spin up €2.5k without doing any research or work in order to do so. Also, you sound like you want to make that money very quickly with no patience.

Very very unlikely and carries a huge risk of big losses. With €2.5k if you're serious you're better off opening an online account where you can trade US stocks and buy 2-3 and hold them, continue to add to your investments over time and build out a portfolio.

That's real advice - do with it what you choose ....

.

alexlyons

I'm aware of the valuation of companies etc but what I was saying was not the value of the company, but the potential for ROI. You have to admit that a €25 share does have a far lower chance of reaching €50 than a €2 share does of reaching €4, provide that it's not something like gold that doesn't really move. Basically, many investors look at shares going up in percentages, so investing 20k and having your share value increase 10% gives you 2k, but a 2.5k investment only gets you 250. Granted the more you put in the more you stand to gain, but iv had two investments in two years that have doubled, both were originally worth less than €3 when bought and then one investment that was around €18 that has only peaked at about a 40% increase. So in that regard would lower priced shares be better for lower investments? Yes each company is different, but this has to be done with a certain amount of generalisation...

alexlyons

pocketdooz wrote: »

Oh, by the way, sounds like you just want to gamble and try spin up €2.5k without doing any research or work in order to do so. Also, you sound like you want to make that money very quickly with no patience.

Very very unlikely and carries a huge risk of big losses. With €2.5k if you're serious you're better off opening an online account where you can trade US stocks and buy 2-3 and hold them, continue to add to your investments over time and build out a portfolio.

That's real advice - do with it what you choose ....

.

The us stocks is something I hadn't thought off, thanks. However if you read my first post, I mention the fact of doing lots of research and also I mention the medium term more than once. So I don't think those comments are fair, but I do welcome you other comments.

pocketdooz

alexlyons wrote: »

You have to admit that a €25 share does have a far lower chance of reaching €50 than a €2 share does of reaching €4

No - this is completely false.

alexlyons wrote: »

So in that regard would lower priced shares be better for lower investments?

No, it makes zero difference whatsoever. I hope I didn't just waste 10 minutes of my life with my response above - seems like I did.

.

pocketdooz

alexlyons wrote: »

The us stocks is something I hadn't thought off, thanks. However if you read my first post, I mention the fact of doing lots of research and also I mention the medium term more than once. So I don't think those comments are fair, but I do welcome you other comments.

Apologies, you did say medium term and research. Most equity investors are happy with a portfolio that beats a benchmark over the medium to long term - that should be your frame of thinking imo and not increasing asap.

That's just my opinion and way of thinking of course - others will say otherwise.

.

force majeure

alexlyons wrote: »

Just wondering what you people would invest an absolute max of 2.5K in? I have this funny tendency to go for the cheap shares, obviously with a lot of research, as they have a way higher chance of doubling etc, eg if I was to go for CRH, although they are pretty low for them, there not going to hit €36 in the medium term, where as it's much easier for something like Aer lingus for example, to hit ¡.75 in the medium term.

So based on that theory, what would be a few companies you'd look at with that money? Or blow that theory out of the water...

Spread trading is the way to go, that or FX

alexlyons

Well I'm afraid you did because you didn't really justify why lower priced shares are not more likely to roughly double than higher priced ones, you just pointed out about how the share price doesn't represent the value of the company.

I'm not looking for a debate, even if it looks like i'm trying to start one, I just can't see any sense at all to that advice. I was never going to go by exactly what anyone says on here, I'm going to base my investment on my own research and information, I'm just looking for other opinions.

pocketdooz

alexlyons wrote: »

Well I'm afraid you did because you didn't really justify why lower priced shares are not more likely to roughly double than higher priced ones, you just pointed out about how the share price doesn't represent the value of the company.

I'm not looking for a debate, even if it looks like i'm trying to start one, I just can't see any sense at all to that advice. I was never going to go by exactly what anyone says on here, I'm going to base my investment on my own research and information, I'm just looking for other opinions.

I'll put this as simply as I can:

Lower priced shares are not more likely to roughly double than higher priced ones because ......

The share price is a function of two things - the value of the company and the number of shares in issue (one divided by the other). It's a derivative of the value of a company. Now, why one company would double in value or not has zero to do with how many shares it has in issue whatsoever and thus has zero to do with the price per share of a company.

If that doesn't make sense to you then I apologise - I can't explain it any clearer.

.

pog it

My interpretation of what Alex is saying from what he understands is that since he has only 2.5k to invest he is better off going for cheaper shares in general so that he can buy more shares that way.

Of course your advice is sound Pocketdooz, but when it comes to 2.5k why would you buy shares at 45/100/600 dollars each? I did this for my very first trade a few years ago when I knew nothing at all about shares, I got away with it, but I'd never be that mad again. I bought 4 shares in Google with 2k! Madness. It's an extreme example of getting less shares when they cost more per share!

Shares wise, I am taking a risk with Citigroup, but with a small amount of money. They have gone up 10% in a week since I bought them and I am holding on. Maybe have a look at them OP and see do they fit your portfolio.

pog it

pocketdooz wrote: »

With €2.5k if you're serious you're better off opening an online account where you can trade US stocks and buy 2-3 and hold them, continue to add to your investments over time and build out a portfolio.

That's real advice - do with it what you choose ....

.

Yep I'd do this if I was you. And go with a US broker online account like zecco.com who are cheap to deal with.

pocketdooz

pog it wrote: »

My interpretation of what Alex is saying from what he understands is that since he has only 2.5k to invest he is better off going for cheaper shares in general so that he can buy more shares that way.

Of course your advice is sound Pocketdooz, but when it comes to 2.5k why would you buy shares at 45/100/600 dollars each?

I understand what he is saying but the above is simply not true. It makes no difference the volume of shares you hold, whether it is 2 at $1,000 or 1,000 at $2 as to your return.

With $2,000 if you hold 1,000 shares @ $2 or 2 shares at $1,000, if the company is identical, your returns will be identical.

The absolute number of shares you hold makes no difference on the % return you can achieve.

.

BESman

pocketdooz wrote: »

I understand what he is saying but the above is simply not true. It makes no difference the volume of shares you hold, whether it is 2 at $1,000 or 1,000 at $2 as to your return.

With $2,000 if you hold 1,000 shares @ $2 or 2 shares at $1,000, if the company is identical, your returns will be identical.

The absolute number of shares you hold makes no difference on the % return you can achieve.

.

Yes, I think its an example of behavioural economics at its best. The human mind would rather buy a lot of "cheap" shares at a low price than 4 or 5 very expensive shares.

I would be of the opinion though that a cheap share (dare I mention BoI?) is easier to make a quick buck on considering you don't need an awful lot of initial investment to potentially double your return. I understand that a highly priced share has every much of a chance of doubling in value as a cheaper share but the brain "feels" that €1 is far easier to double than €50.

Time Magazine

BESman wrote: »

Yes, I think its an example of behavioural economics at its best. The human mind would rather buy a lot of "cheap" shares at a low price than 4 or 5 very expensive shares.

I would be of the opinion though that a cheap share (dare I mention BoI?) is easier to make a quick buck on considering you don't need an awful lot of initial investment to potentially double your return. I understand that a highly priced share has every much of a chance of doubling in value as a cheaper share but the brain "feels" that €1 is far easier to double than €50.

It's absolute madness to base what would otherwise be a stupid investment strategy on the assumption that everyone else is even stupider.

Zenith74

Granted some private investors probably do think lower share prices are 'cheaper' in their heads and this probably does affect share price in a tiny way, however I doubt institutional investors suffer the same thing and they're the ones causing the big moves in share price. So my suggestions is ignore the price of a share, concentrate on your €2500 as that's the figure that matters.

I reckon you're not looking for a low priced share, you're looking for a high risk/volatility share, whether it's €1 or €100. Whether it's risky because it has lost hugely during the recession and may lose or gain hugely from now on (Irish bank shares AIB/BOI), because of things within the company going wrong (thinking of SMART/ELAN in the past or maybe INM more recently) or because it's just a small company with the potential for huge growth or contraction (aka small cap companies).

So if you want to just take a gamble on a risky share I'm sure there are lots of options, BOI or AIB jump to mind. I certainly wouldn't recommend this though, I'd suggest starting to build a portfolio of shares where you diversify your risk so are unlikely to lose a significant amount of your money. For instance I'm down 95% on AIB shares I bought a while back, but it's not a big deal because other shares are up, so overall I'm not doing too badly.

Assuming you're going to build a proper portfolio keep in mind that many brokers have a minimum commission, so although you want to build a portfolio of shares (10+) it isn't going to make sense to buy €100 in this share and €300 in the next. To get started I'd consider putting your €2500 into an ETF which is a collection of many shares, doing your diversification for you. You can buy ETFs easily from online brokers like ShareWatch or from regular brokers like Campbell O'Connor & Co. Take a look at www.ishares.com for a full list of the ETFs they do, it's pretty interesting, but here are some that might be interesting to you -
iShares MSCI Emerging Markets SmallCap - Up over 100% in the last year. Invests in small cap companies in emerging countries like India, Brazil, China etc.
iShares DJ Euro STOXX SmallCap - 75% in the last year. Invests in small cap European companies.
iShares MSCI Emerging Markets - 80% in the last year. Invests in large cap companies in emerging countries.

You get the idea. The only thing to bear in mind is that the last 12 months has been very good for most shares so those percentages are not typical. Having said that there are a number of studies showing that small cap companies tend to perform very well in the three years following recession...

Dublin_Gunner

Personally, tech shares I would think are the way to go - AMD/Intel/Nvidia.

There are pro's and cons to each. Intel generally remain quite stable, being the market leader, you're nearly guaranteed a return, even if its not a big one.

AMD however are trading at $9.44~ currently - and if you think that 4 years ago they were well over $30 a share before the release of Core 2 (and subsequent purchase of ATI) you can see there is room for huge growth - particularly that their HD5x range are selling well, and they've a new CPU architecture due out this year, which should make inroads to the server and SI market.

Nvidia have just released a new architechture, and though probably not selling all that well, a respin of this should be due later in the year and ight be worth a shot.

However, looking at share price versus MktCap, AMD look like a fairly safe bet.

I know this is a fairly simplified view, and I'm no stock broker. But they look like reasonable bets.

pocketdooz

Zenith74 wrote: »

Granted some private investors probably do think lower share prices are 'cheaper' in their heads and this probably does affect share price in a tiny way, however I doubt institutional investors suffer the same thing and they're the ones causing the big moves in share price. So my suggestions is ignore the price of a share, concentrate on your €2500 as that's the figure that matters.

I reckon you're not looking for a low priced share, you're looking for a high risk/volatility share, whether it's €1 or €100. Whether it's risky because it has lost hugely during the recession and may lose or gain hugely from now on (Irish bank shares AIB/BOI), because of things within the company going wrong (thinking of SMART/ELAN in the past or maybe INM more recently) or because it's just a small company with the potential for huge growth or contraction (aka small cap companies).

So if you want to just take a gamble on a risky share I'm sure there are lots of options, BOI or AIB jump to mind. I certainly wouldn't recommend this though, I'd suggest starting to build a portfolio of shares where you diversify your risk so are unlikely to lose a significant amount of your money. For instance I'm down 95% on AIB shares I bought a while back, but it's not a big deal because other shares are up, so overall I'm not doing too badly.

Assuming you're going to build a proper portfolio keep in mind that many brokers have a minimum commission, so although you want to build a portfolio of shares (10+) it isn't going to make sense to buy €100 in this share and €300 in the next. To get started I'd consider putting your €2500 into an ETF which is a collection of many shares, doing your diversification for you. You can buy ETFs easily from online brokers like ShareWatch or from regular brokers like Campbell O'Connor & Co. Take a look at www.ishares.com for a full list of the ETFs they do, it's pretty interesting, but here are some that might be interesting to you -
iShares MSCI Emerging Markets SmallCap - Up over 100% in the last year. Invests in small cap companies in emerging countries like India, Brazil, China etc.
iShares DJ Euro STOXX SmallCap - 75% in the last year. Invests in small cap European companies.
iShares MSCI Emerging Markets - 80% in the last year. Invests in large cap companies in emerging countries.

You get the idea. The only thing to bear in mind is that the last 12 months has been very good for most shares so those percentages are not typical. Having said that there are a number of studies showing that small cap companies tend to perform very well in the three years following recession...

Posts like this make this forum still worthwhile. Fair play.

.

pog it

pocketdooz wrote: »

I understand what he is saying but the above is simply not true. It makes no difference the volume of shares you hold, whether it is 2 at $1,000 or 1,000 at $2 as to your return.

With $2,000 if you hold 1,000 shares @ $2 or 2 shares at $1,000, if the company is identical, your returns will be identical.

The absolute number of shares you hold makes no difference on the % return you can achieve.

.

Pocket I know that! 10% return is a 10% return no matter what the cost of the share! How would that change? Honestly you don't need to tell me that. That is basic maths.

pog it

Seriously annoying how my point has been twisted so that you can all jump in with a preachy sermon!

The point was -Between the lines- That a Google share @ 500 each is unlikely to go to 1000 (or was in the market at the time I bought it before i had knowledge of buying stocks). Just like CRH is of getting back to c. 70 each!! I'd rather buy Kenmare than CRH, and for lots of other reasons as well.

Nobody is saying that I or AlexLyons buy shares based on the fact that the share is "cheap".

I have had very successful experience over the past 12 months. I don't compare myself to any of you, I only aim to get better for myself. But at the same time, those lecturing me have made less returns than me, going by what they have stated on these forums.

I don't preach to you, don't preach to me.

pog it

BESman wrote: »

Yes, I think its an example of behavioural economics at its best. The human mind would rather buy a lot of "cheap" shares at a low price than 4 or 5 very expensive shares.

I would be of the opinion though that a cheap share (dare I mention BoI?) is easier to make a quick buck on considering you don't need an awful lot of initial investment to potentially double your return. I understand that a highly priced share has every much of a chance of doubling in value as a cheaper share but the brain "feels" that €1 is far easier to double than €50.

As pointed out by TimeMagazine, you have completely contradicted yourself here.

Secondly, that isn't how my mind works, so get that out of your head.

Zenith74

In fairness PogIt I think he's just trying to correct the general vibe of this thread, which if not read carefully suggests that a low share price automatically implies a low valued/undervalued/volatile/high-risk company. In fairness the OP did mention that research would be needed (which would tell whether a share price was low because the company just has more shares out there in comparison to another company of similar market capitalisation or whether it was low for other reasons that might make it interesting for speculation purposes) but it came across a bit wrong and is worth pointing out for people just getting into the stockmarket who may not fully understand all this yet.

Idu

pog it wrote: »

The point was -Between the lines- That a Google share @ 500 each is unlikely to go to 1000 (or was in the market at the time I bought it before i had knowledge of buying stocks). Just like CRH is of getting back to c. 70 each!! I'd rather buy Kenmare than CRH, and for lots of other reasons as well.

So it would be fair to say that Google or CRH(your examples) are also less likely to lose 50% than a supposed "cheaper" example?

Would this not be worthy of consideration using the logic you suggest?

pog it

Idu wrote: »

So it would be fair to say that Google or CRH(your examples) are also less likely to lose 50% than a supposed "cheaper" example?

Would this not be worthy of consideration using the logic you suggest?

Obviously the probabilty of that happening is the same for both of them! I was giving the OP the story of my experience from my very first investment. If Google is at 500dollars then no way would I invest again, it is only at that price because of the mania behind it. Even if it was to get to 1000 , well let it, and good for anyone who invested at 500 and held it! But for me the risk for a downfall is much greater. Again I could be wrong but my gut tells me to stay away from CRH, not solely on its price.

My real logic which I put behind selecting stocks is based on fundmentals and gut and what my interpretation and conclusions are after considering the pros and cons to buying a particular share. I have an open mind and don't have an arrogant approach like some investors who are not successful. I love learning. I have a portfolio. If 2 shares don't perform despite my best efforts/estimations, but 8 perform well, then that's what it's all about.

That is my logic.

displaced dub

if i had another 2500 i would but smurfit... but research it.

alexlyons

what's really annoying me is way back in december 08, the ol' man said if he had to pick one company to invest in back then, he would have picked paddy power. go have a look at there history throughout the recession

pog it

alexlyons wrote: »

what's really annoying me is way back in december 08, the ol' man said if he had to pick one company to invest in back then, he would have picked paddy power. go have a look at there history throughout the recession

No offence Alexlyons but it was hard to go wrong with stock picks from early 2009. 2010 is much more challenging.

pog it

pog it wrote: »

My interpretation of what Alex is saying from what he understands is that since he has only 2.5k to invest he is better off going for cheaper shares in general so that he can buy more shares that way.

Of course your advice is sound Pocketdooz, but when it comes to 2.5k why would you buy shares at 45/100/600 dollars each? I did this for my very first trade a few years ago when I knew nothing at all about shares, I got away with it, but I'd never be that mad again. I bought 4 shares in Google with 2k! Madness. It's an extreme example of getting less shares when they cost more per share!

Shares wise, I am taking a risk with Citigroup, but with a small amount of money. They have gone up 10% in a week since I bought them and I am holding on. Maybe have a look at them OP and see do they fit your portfolio.

Yay! Citigroup is up almost 7% today itself- 17% banked in a week and a half Can this rally go on and on an on though? I'm staying cynical

tolkarovers

Apple (APPL)
Going to reach 295 by christmas

Dublin_Gunner

tolkarovers wrote: »

Apple (APPL)
Going to reach 295 by christmas

That's presumptuous of you!

I used to play for you

Zenith74

Apple (APPL)
Going to reach 295 by christmas

Based on any particular logic or reason?

Dublin_Gunner

Zenith74 wrote: »

Based on any particular logic or reason?

I'd say Logic, definitely not Reason.

tolkarovers

25% growth since christmas
Analyst ratings of between 295 and 310
iPad
iPhone 4G
iAd
iTunes

No brainer

alexlyons

they'll get pretty high alright. they were $85 at some stage in the last year or so, wish i'd bought them!

Van.Bosch

alexlyons wrote: »

they'll get pretty high alright. they were $85 at some stage in the last year or so, wish i'd bought them!

so does this not contradict your theory that a "dear" share will not double? if apple shares had been $.85 at that stage last year they would be approx $2.50 today.

arrowloopboy

if you fancy a quick gamble,short eur/usd @ todays level @ 1.3502 with 25 euro a pip and 100 pip s/l,its looking to get back to last weeks level at circa 1.3260.
If this comes off you'll get the guts of 9 grand back,its a gamble ,but a very good one;).

happy pippin

arrowloopboy

arrowloopboy wrote: »

if you fancy a quick gamble,short eur/usd @ todays level @ 1.3502 with 25 euro a pip and 100 pip s/l,its looking to get back to last weeks level at circa 1.3260.
If this comes off you'll get the guts of 9 grand back,its a gamble ,but a very good one;).

happy pippin

Your 2.5k would be worth about 14k at the minute if youd took my advice,

i did;):D:D:D:D:D:D

Kylo Ren

Google or donkey racing!

Dublin_Gunner

arrowloopboy wrote: »

Your 2.5k would be worth about 14k at the minute if youd took my advice,

i did;):D:D:D:D:D:D

So what did you buy?

alexlyons

arrowloopboy wrote: »

Your 2.5k would be worth about 14k at the minute if youd took my advice,

i did;):D:D:D:D:D:D

run me through exactly what you did? not sure about s/l? etc etc

RoadKillTs

So what did you buy?

He didn't buy anything. He sold the Euro again the Dollar.

alexlyons

with 25 euro a pip and 100 pip s/l

ye but what does that mean??

RoadKillTs

with 25 euro a pip and 100 pip s/l

ye but what does that mean??

PIP stands for percentage in point.

Each pip is worth 25 euros and he has a stop loss (s/l) of 100 pips so if his position moves 100 pips higher the position is closed and he loses 2500 euros.

Be careful if you are considering getting involved in currency trading. Its can be a very dangerous market.

Zenith74

alexlyons - He's talking about forex trading, do a Google for it as there is mountains of info about on it. There's a HUGE amount of money traded in FOREX by speculators on a daily basis, it's big business. arrowloopboy's trade would have made good money in that case, but somebody getting into FOREX trading is very unlikely to make money in the first 6-12 months. Most people will see trades like that, throw in a few grand, lose it then walk away from FOREX for ever. Others will throw in a few grand but do small trades (25 Euro per pip with a 100 pip stop loss (s/l) on a €2500 account would be classed as VERY foolish, that's 100% of your account risked when you should be aiming for 1-2% per trade, hence why arrowloopboy called it a gamble because keeping going like that will lose you all your money, fast!), learning as they go and after 6-12 months or longer MAY start to get a good reliable strategy going and make some money. Because FOREX is so highly leveraged small moves in the market can make you lots of money, or close your account real fast, so it's not "investing".

Having said that I find FOREX trading very interesting and what's really cool is most brokers allow you trade through a piece of software called MetaTrader where you can write code (in C++ style) to watch the markets, signal you to particular movements and even trade for you once the program is running. Pretty cool, just don't get the idea that you're going to make big money in the first year cause you're not.

arrowloopboy

alexlyons wrote: »

run me through exactly what you did? not sure about s/l? etc etc

Sorry Alex,

I Sold euro versus dollar,i.e i bought u.s dollars at 1.3502 and i closed that deal @1.3060 which in forex trading or spreadbetting terms is a profit of 442 points or pipps.
I used your 2.5k to give me 100 points of a stop/loss @25 euro a point ,which means if the level had of reached 1.3602 i was out of the trade and -2.5k:eek:.
But since this debaccle with Greece ,the euro is only heading in one direction ,south.

So in a nut shell 442 points X E25 = 11,050 + your 2,500

gives you K13,550

Simples.

arrowloopboy

Zenith74 wrote: »

alexlyons - He's talking about forex trading, do a Google for it as there is mountains of info about on it. There's a HUGE amount of money traded in FOREX by speculators on a daily basis, it's big business. arrowloopboy's trade would have made good money in that case, but somebody getting into FOREX trading is very unlikely to make money in the first 6-12 months. Most people will see trades like that, throw in a few grand, lose it then walk away from FOREX for ever. Others will throw in a few grand but do small trades (25 Euro per pip with a 100 pip stop loss (s/l) on a €2500 account would be classed as VERY foolish, that's 100% of your account risked when you should be aiming for 1-2% per trade, hence why arrowloopboy called it a gamble because keeping going like that will lose you all your money, fast!), learning as they go and after 6-12 months or longer MAY start to get a good reliable strategy going and make some money. Because FOREX is so highly leveraged small moves in the market can make you lots of money, or close your account real fast, so it's not "investing".

Having said that I find FOREX trading very interesting and what's really cool is most brokers allow you trade through a piece of software called MetaTrader where you can write code (in C++ style) to watch the markets, signal you to particular movements and even trade for you once the program is running. Pretty cool, just don't get the idea that you're going to make big money in the first year cause you're not.

Zenit makes some excellent points,we sold at that level and have being shorting the market since 1.5000,our last trade was yesterday sell @ 1.3300 which is currently 170 pipps in profit,our initial target is 1.3020.

Forget about metatrader m/as and all the other fancy indicators,their all bull**** ,and will all loose you your a/c in the long run.

Zenith,"Forex is not investing " this im afraid is more bull****.

The group i trade with hasn't had a loosing quarter since in was set up in 2006.
It returned 40% last year in the middle of the great financial crisis and 100s of % the previous 3 years.

We use 2% per trade which is quite conservative ,so if this isnt investing ,i dont care, but the money is good.

regards

Zenith74

Zenith,"Forex is not investing " this im afraid is more bull****.

To be fair I guess it depends on your definition of "investing". I think of an investment as buying an asset with the hope that it will make profit but also that you are holding an underlying asset that you should only lose completely if it goes bang for some reason. ie. buying property, shares in a company, a classic car, actual currency (unleveraged). The latter being the important one here. If you buy $10000 with the hope that it will increase in value against the Euro so you can sell it for a profit down the road then that is an investment in my book. The chances of your $10000 turning to $0 is remote and if it drops 50% it sucks but you've still got your $5000 and over time it may gain value again and go to $10000 or more. However if you use that $10000 to trade FOREX you will generally leverage the money at 50:1, 100:1, 400:1. At 400:1 leverage the asset only needs to lose 0.25% for you to be down $10000 but now instead of having the possibility that the asset will gain value in the long run it's gone, your account is closed. Obviously if it goes up 0.25% then you've made $10000. To me this is much closer to gambling. Not that that's necessarily a bad thing, as I say I find FOREX very interesting and spent lots of time looking into it, people just need to be VERY aware what they're getting into. Read the FOREX forums and you'll find the majority of people who get into it lose all or most of their money early on, most then giveup, some persevere and maybe make money, maybe lots. You will have to work for it though, you can't just buy and forget as you might with share in a property or a company.

It returned 40% last year in the middle of the great financial crisis

Absolutely, you can trade short as easy as long and are generally going shortterm. Somebody day trading leveraged shares/commodities or CFDs could do the same thing.

We use 2% per trade which is quite conservative ,so if this isnt investing ,i dont care, but the money is good.

I'd call that good money management, strategic gambling, not investing .


Anyway, not sure where I'm going with this, albeit kinda interesting. The OP asked for somewhere to invest his money, I don't think a 100% risk win or bust on forex qualifies as an investment. However if the OP wants to take that €2500, open a microlot forex account and do small trades (1% risk max), learn how to trade forex properly over a good few months then I'd say go for it, I've given it lots of thought and as you say there is money to be made there...

tolkarovers

The group i trade with hasn't had a loosing quarter since in was set up in 2006.
It returned 40% last year in the middle of the great financial crisis and 100s of % the previous 3 years.


Are you taking new members?

arrowloopboy

tolkarovers wrote: »

The group i trade with hasn't had a loosing quarter since in was set up in 2006.
It returned 40% last year in the middle of the great financial crisis and 100s of % the previous 3 years.


Are you taking new members?

Its not my decision Tolka,im only a member not the Bossman
Are you currently trading Forex ?