Want to buy some shares - where do I start

[sidicks]

Alex said:

If you think the shares are going to rise in value in the short term, you could consider placing a spread bet.

Economically you are certainly correct. However I'm not sure this is necessarily appropriate for the OP!

[98elise]

sidicks said:

AJB88 said:

Looking over a year they have gone down a lot.

And?

Anyone who decides to purchase shares purely on the basis they have recently 'gone down a lot' is asking to lose money very quickly.

Edited by sidicks on Monday 20th February 23:05

Agreed. There is normally a good reason why a share is losing a lot value over time.

[Craikeybaby]

rockin said:

To begin investment in a single "bombed out" company is a very, very high risk approach.

There are investment funds which specialise in what's called "value investing". The expert fund manager does lots of research to find companies whose share prices appear to be lower than might be expected - including, for instance, due to recent bad press.

You could open an ISA with Fidelity and buy some of their "Special Situations Fund". The cost of doing it this way would be about 1% p.a. but the combination of (a) manager's skill, and (b) tax relief in the ISA, should make that small cost well worth paying. Fidelity has an excellent website which makes it very easy for a beginner to invest. https://www.fidelity.co.uk/investor/default.page?m...

If you open it via Cavendish Online the fees are even cheaper, but you still end up using the Fidelity website etc.

[NickCQ]

sidicks said:

Alex said:

If you think the shares are going to rise in value in the short term, you could consider placing a spread bet.

Economically you are certainly correct. However I'm not sure this is necessarily appropriate for the OP!

But sid, I thought you were all in favour of finding tax-free ways to get exposure to the equity market

[mjb1]

richatnort said:

Thanks for the advice! I think by the sounds of things i'll save up a bit more cash and buy a bug lump sum.

I know profits are down but they're expanding into europe, taken over an american company & seem to be opening more stores in the UK.

Mainly got a good tip from a friend who thinks things will turn round so could make a pretty profit from it all.

Thanks for the advice so far!

No offence, but you sound rather naive about this stuff. I mean, if you had thousands in cash savings and wanted to take a punt, then maybe Sports Direct shares are a worth a go. But don't gamble what you can't afford to loose, and if you have to save up to be able to buy in, then it doesn't sound like money you can afford to throw away. Your lead might be a red hot one, but it also sounds very high risk, especially as the high street is suffering generally.

Buying shares, you really want to be doing trades well into the hundreds of pounds in one go to make it worthwhile relative to the fees involved. Investing directly in shares is fairly high risk strategy and you really need to keep right on top of the markets, which is time consuming to do properly. A sensible shares investor will be spreading their investments around to manage risk, rather than putting it all in one pot. So that means you want to be investing hundreds each in a variety of shares, which is a long way from your £30 drip feed.

[Oakey]

richatnort said:

Thanks for the advice! I think by the sounds of things i'll save up a bit more cash and buy a bug lump sum.

I know profits are down but they're expanding into europe, taken over an american company & seem to be opening more stores in the UK.

Mainly got a good tip from a friend who thinks things will turn round so could make a pretty profit from it all.

Thanks for the advice so far!

If ever there was a good reason to invest in something...

Realistically, how much profit do you think you're going to make here and on how much investment? If you put £1000 in today and they magically double their share price you'd only make £1k profit.

[Alex]

Oakey said:

If ever there was a good reason to invest in something...

Realistically, how much profit do you think you're going to make here and on how much investment? If you put £1000 in today and they magically double their share price you'd only make £1k profit.

Not if you put it on a spread bet.

[sidicks]

Alex said:

Not if you put it on a spread bet.

Leverage, you mean?

[Alex]

Yes. Sports Direct shares are currently around £3.00

If you place a £100 buy per penny bet and they go up to £4.00, your return is £1,000.

[sidicks]

Alex said:

Yes. Sports Direct shares are currently around £3.00

If you place a £100 buy per penny bet and they go up to £4.00, your return is £1,000.

1. Wouldn't that be £10,000?

2. Likewise he loses £10,000 if the shares fall to £2.00

3. Regardless, the OP doesn't want to risk more then £30, so it's somewhat academic!

[Alex]

sidicks said:

1. Wouldn't that be £10,000?

2. Likewise he loses £10,000 if the shares fall to £2.00

3. Regardless, the OP doesn't want to risk more then £30, so it's somewhat academic!

Sorry, yes! I meant £10 a point. Place a stop at £2.70, job done!

[Jules360]

sidicks said:

richatnort said:

Thanks for the advice! I think by the sounds of things i'll save up a bit more cash and buy a bug lump sum.

I know profits are down but they're expanding into europe, taken over an american company & seem to be opening more stores in the UK.

Mainly got a good tip from a friend who thinks things will turn round so could make a pretty profit from it all.

Thanks for the advice so far!

Remember that there are hundreds of asset managers who have significant resource to analyse different companies and determine what the short-term and long-term prospects for the companies are - if there was a consensus then those managers would already have bought into the stock and it will have risen - the current price reflects the market expectations for the stock.

The news that you've highlighted. - expansion etc - is already known by everyone and hence factored into the market.

Of course you might get lucky (and / or professional fund managers may have underestimated the potential) but putting all your eggs in one basket is a big gamble. And small investment amounts will be hit by significant costs even if your investment view is correct.

Be careful!

I prefer to think of it as everyone's INTERPRETATION of available news is priced in. So the stock (or any other financial instrument) is not perfectly priced.

[sidicks]

Jules360 said:

I prefer to think of it as everyone's INTERPRETATION of available news is priced in. So the stock (or any other financial instrument) is not perfectly priced.

Indeed - but whose judgement would you trust more - a specialist portfolio manager with access to huge amounts of resource and data or a 'friend of a friend' who believes the shares will go up 'cos they've gone down a lot recently'...?!

[NRS]

Alex said:

sidicks said:

1. Wouldn't that be £10,000?

2. Likewise he loses £10,000 if the shares fall to £2.00

3. Regardless, the OP doesn't want to risk more then £30, so it's somewhat academic!

Sorry, yes! I meant £10 a point. Place a stop at £2.70, job done!

Given the OP is at the level of "a friend told me they've gone down so they're going to go back up" then I don't think it's best to do this, I am no expert, but have a lot more experience than the OP and have almost never considered spread betting.