Buying shares - Cheapest/Best way to purchase?

Buying shares - Cheapest/Best way to purchase?

Author
Discussion

Froomee

Original Poster:

1,418 posts

168 months

Saturday 14th November 2015
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As the title says.

Iv looked online and information is fairly basic so thought I'd ask here.

Who do you buy shares with? Who is the cheapest, are there any obvious pitfalls to avoid.

The amount id like to potentially invest is £10-£20k and possibly adding to it monthly.

Thanks in advance to any help.

JoeBolt

271 posts

161 months

Sunday 15th November 2015
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This is one comparison table: -

http://www.money.co.uk/share-dealing.htm

I'm sure others are available. I use iWeb but I opened the account when the opening charge was just £25. It's now £200.

Pitfalls? The share price can fall dramatically and you can lose an awful lot of money!

Edited to add: Hopefully you'll avoid the latter by: -

Investing in a broad range of industries.
Never being panicked into selling during market volatility. (Like tomorrow?)
Never being forced to sell at a loss because you need the cash.

Edited by JoeBolt on Sunday 15th November 12:25

Ozzie Osmond

21,189 posts

245 months

Sunday 15th November 2015
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Froomee said:
Who do you buy shares with? Who is the cheapest, are there any obvious pitfalls to avoid.
Unless you are an experienced investor I would strongly suggest buying "funds" (i.e. a selection of shares chosen and managed by someone else) rather than individual "shares".

You can buy funds direct from the providers but it's cheaper to buy them through what's called a platform. There are a well-known names which have a good offering for small investors. These include Fidelity and Hargeaves Lansdown. Amongst other things they can run your investments inside a tax free ISA - which is nice. Both have websites which are simple to follow and are well worth having a click around,

https://www.fidelity.co.uk/investor/default.page

http://www.hl.co.uk/investing




Monty Python

4,812 posts

196 months

Monday 16th November 2015
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Is this for short or long term?

Froomee

Original Poster:

1,418 posts

168 months

Tuesday 17th November 2015
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A bit of both to be honest.

Iv been looking at buying another house (which I may well do) but I'm reluctant to put all my money into houses.

I might buy a cheaper house and put the rest into shares rather than having all my eggs in one basket so to speak.

Monty Python

4,812 posts

196 months

Wednesday 18th November 2015
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Problem with any share dealing is that dealing costs and stamp duty eat into any profits. If you invest £10k in shares then you pay 0.5% tax (£50) plus ~£20 sell/buy fee, so you're already £70 down. You need a pretty large swing in share price to get any large profit. I've been dealing for several years now and so far my profit margin is running around 9%.


BoRED S2upid

19,641 posts

239 months

Wednesday 18th November 2015
quotequote all
Ozzie Osmond said:
Unless you are an experienced investor I would strongly suggest buying "funds" (i.e. a selection of shares chosen and managed by someone else) rather than individual "shares".

You can buy funds direct from the providers but it's cheaper to buy them through what's called a platform. There are a well-known names which have a good offering for small investors. These include Fidelity and Hargeaves Lansdown. Amongst other things they can run your investments inside a tax free ISA - which is nice. Both have websites which are simple to follow and are well worth having a click around,

https://www.fidelity.co.uk/investor/default.page

http://www.hl.co.uk/investing
This rather than picking stocks yourself. There are so many funds out there that whatever sector or country you wish to invest in there will be a fund out there.

walm

10,609 posts

201 months

Wednesday 18th November 2015
quotequote all
BoRED S2upid said:
Ozzie Osmond said:
Unless you are an experienced investor I would strongly suggest buying "funds" (i.e. a selection of shares chosen and managed by someone else) rather than individual "shares".

You can buy funds direct from the providers but it's cheaper to buy them through what's called a platform. There are a well-known names which have a good offering for small investors. These include Fidelity and Hargeaves Lansdown. Amongst other things they can run your investments inside a tax free ISA - which is nice. Both have websites which are simple to follow and are well worth having a click around,

https://www.fidelity.co.uk/investor/default.page

http://www.hl.co.uk/investing
This rather than picking stocks yourself. There are so many funds out there that whatever sector or country you wish to invest in there will be a fund out there.
Or just stick it in a tracker and instantly outperform most fund managers.

Centurion07

10,381 posts

246 months

Wednesday 18th November 2015
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I use x-o.co.uk.

£6.95 flat fee per trade + the obligatory 0.5% tax.

BoRED S2upid

19,641 posts

239 months

Wednesday 18th November 2015
quotequote all
walm said:
BoRED S2upid said:
Ozzie Osmond said:
Unless you are an experienced investor I would strongly suggest buying "funds" (i.e. a selection of shares chosen and managed by someone else) rather than individual "shares".

You can buy funds direct from the providers but it's cheaper to buy them through what's called a platform. There are a well-known names which have a good offering for small investors. These include Fidelity and Hargeaves Lansdown. Amongst other things they can run your investments inside a tax free ISA - which is nice. Both have websites which are simple to follow and are well worth having a click around,

https://www.fidelity.co.uk/investor/default.page

http://www.hl.co.uk/investing
This rather than picking stocks yourself. There are so many funds out there that whatever sector or country you wish to invest in there will be a fund out there.
Or just stick it in a tracker and instantly outperform most fund managers.
Where's the fun in that? He obviously wants a bit of risk or he wouldn't be thinking of picking his own shares.

SoupAnxiety

299 posts

109 months

Wednesday 18th November 2015
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Depending on how long you want to lock your money away and if you specifically want to buy shares or are happy delegating to a grown up, Hargreaves Lansdown have been brilliant for me. The fees are slightly more than most but if you opt for unbundled fund classes they are competitive. Slick website, brilliant service when you need it and lots of research. The Wealth 150 / 150+ is a circle jerk for promoting their friends but apart from this it's a great platform.

walm

10,609 posts

201 months

Thursday 19th November 2015
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BoRED S2upid said:
Where's the fun in that? He obviously wants a bit of risk or he wouldn't be thinking of picking his own shares.
If people are suggesting actively managed funds then I believe trackers deserve an equal shout out.

I would very much like to persuade him away from picking his own shares - no matter how much "fun". It's a mugs game.

Source: am a mug.

LeoSayer

7,299 posts

243 months

Friday 20th November 2015
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walm said:
If people are suggesting actively managed funds then I believe trackers deserve an equal shout out.

I would very much like to persuade him away from picking his own shares - no matter how much "fun". It's a mugs game.

Source: am a mug.
So many companies that appeared safe and prudently managed have have suffered in recent history...

Lloyds bank
Tesco
UBS
VW

Of course you could be lucky and sometimes it's good to have a holding in a company for personal reasons, but the only way to mitigate the risk is to hold lots of different company shares. That requires a hell of a lot of time for analysis and monitoring - something that fund managers do for a job. Or a trackers where you get the diversified exposure without the management costs.

DaveH23

3,230 posts

169 months

Wednesday 25th November 2015
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Centurion07 said:
I use x-o.co.uk.

£6.95 flat fee per trade + the obligatory 0.5% tax.
This.

sealtt

3,091 posts

157 months

Thursday 26th November 2015
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You could just set up a Share ISA (if you don't already have an ISA) for the tax advantages.

Charles Stanley Direct is a good platform, easy access to lots of good funds. Split up your cash across the funds that interest you, tracker funds on there too - and loads of choice and very low management fees.

ATTAK Z

10,586 posts

188 months

Thursday 26th November 2015
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Sorry for my ignorance and (maybe silly) question, what is a tracker ?

walm

10,609 posts

201 months

Friday 27th November 2015
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ATTAK Z said:
Sorry for my ignorance and (maybe silly) question, what is a tracker ?
Not silly at all.
They are generally very low fee products that use computers to mimic the performance of a certain index.
So everybody knows perhaps the FTSE 100 but you can't actually buy shares in it.
You can only buy shares in the companies underlying the FTSE.
If you have the exact right numbers of each then your investments will perform exactly as the FTSE does.
The problem is that, obviously, there are 100 stocks in it.
And to recreate the index yourself will see a lot of performance disappearing in transaction fees as you buy each individual shares.

Trackers pool lots of investors' money and then mimic the index as above but can spread the transaction fees over a much wider base thus becoming much cheaper.
And since it just needs a simple computer program to run it you don't need to pay an expensive fund manager so again they are super cheap.

Many "brand name" investment houses (Legal & General, HSBC, Fidelity, etc...) will offer their own trackers because it is great business - popular and cheap - so again - the competition tends to drive fees down.

So you might be able to simply open an ISA and buy "units" (they aren't really shares) in the L&G FTSE 100 tracker with just 0.2% annual fees.

The complicated bit is that there are LOADS of indices not just the FTSE so you still need to have a think about which ones you might want.

ATTAK Z

10,586 posts

188 months

Friday 27th November 2015
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Many Thanks walm