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In-depth research has enabled a 30-something Perth couple, Shaun and
Sonya Lloyd, to turn $3,000 into $12,000 in 7 months of share trading.
Apart from research there was also significant sacrifice. Shaun had worked 70
hours a week as a boilermaker and Sonya 7 days a week as a hairdresser to
save $40,000.
After relocating from Darwin
to Perth, they
read Robert Kiyosaki’s self-help bestseller Rich Dad, Poor Dad, from which they
concluded they needed to embark on more extensive financial education.
Kiyosaki’s motivational handbook, published in the US in 2000, is
subtitled “What the rich teach their kids about money that the poor and middle
class do not” and it inspired the Lloyds to become more financially
adventurous.
“Saving does not work,” Shaun Lloyd says. “We watched all
that hard work disappearing and we weren’t getting the rewards for all our hard
work."
After learning about risk management at a share-trading
seminar they attended in February last year, the Lloyds proceeded to thoroughly
research their every move. After studying real-life examples of individual
trading results they increasingly understood that losses on the sharemarket
were inevitable.
“Risk management is essential to minimize the size of your
losses,” Shaun said. “Initially, our risk profile was 3 per cent of our trading
float, and this figure will continuously reduce to a target of 1.6 per cent, as
our float grows.
“We never break the rules when it comes to risk management.
Anyone that tried to outsmart the market will face big problems.”
Shaun Lloyd regularly calls up a range of information on the
web to learn about the wider economy as it relates to his trading activities.
“When I was new to this I realized there’s a hell of a lot
to learn,” he says.
He now regularly visits the ASX site, mainly for company
news, which he dissects as a matter of course whenever there has been a trading
halt or sudden change in price “to see what happened”.
Also on his radar are stockbrokers’ reports, and he
subscribes to investors’ newsletters – but he sees these as of variable
reliability compared with the more scientific technical analysis.
“I’m from a scientific background, and I appreciate the
power of statistics,” he says. “Scientific analysis is what counts – one must
take the emotion out of everything to do with share trading.”
As the Lloyds’ sharemarket returns grow, so do their
aspirations, with Shaun intending to complete his degree to become a
chiropractor and Sonya embarking on a full-time fine arts degree. Meanwhile,
the funds generated are allowing them to do such things as shark fishing,
mountain-bike riding and four-wheel driving.
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