Ask Colin

Is there a simple answer to the wuestion of what shares to buy?

The detailed question was:

For the last two months I have been reading books, internet information and lots more on trading shares. I have managed to save $10K and want to start buying shares, problem is, I am very unsure which ones to buy! I have read so much that I think I am confused! Do you have a simple answer to my question?

There is no simple answer to your question. It depends on many things which you need to provide the input for – your age, risk tolerance, personality, attitudes and beliefs. Then you need to develop an investment plan. It will take you some time to do this – maybe a few years of reading and study and then more time gaining experience to understand yourself in an investment context. Remember that you are embarking on learning a new profession. Most professions take up to 10 years of study and experience before you are proficient.

Two months is a small fraction of the time you will need. Indeed, I am not surprised that you are confused. The initial learning curve is steep and clear. Then it gets more complicated as you learn more and you tend to go backwards for some time before things start to fall into place. All learning tends to this model.

The reason you have to develop your own investment plan is because it has to suit you and only you will know if it feels right. Also in the process of developing and testing the plan, you will develop the faith in it necessary to be able to follow it under pressure.

I am unable to advise you specifically for many reasons. The main one is that I am not a licensed investment adviser and do not wish to become one. My focus is on teaching people how to manage their own investments, not provide advice.

You may find my book Building Wealth in the Stock Market is useful in your journey, because it contains my investment plan for use as a model for what should be in your plan. There is also a great deal of material available free and to members on my website, which builds on the teaching in my book..