Beginner with stocks/shares
Discussion
Hi guys,
I've been thinking about buying/selling stocks and shares as a little side interest and hopefully become successful to save for the future. A friend of mine recommended the NatWest stock app as that's what he uses and is fairly easy to use with low fees. I use NatWest personally so could be a good match. Are there others you use?
As I'm a beginner, I wonder what advice or tips others have for somebody starting out? Don't worry I'm not asking for your portfolio details however tips and what to look out for/avoid for someone completely new?
I've been thinking about buying/selling stocks and shares as a little side interest and hopefully become successful to save for the future. A friend of mine recommended the NatWest stock app as that's what he uses and is fairly easy to use with low fees. I use NatWest personally so could be a good match. Are there others you use?
As I'm a beginner, I wonder what advice or tips others have for somebody starting out? Don't worry I'm not asking for your portfolio details however tips and what to look out for/avoid for someone completely new?
For me don't buy emotive stocks like Man Utd. Buy stocks like Barrett Homes, have plummeted through recession and housing on the upturn and all councils have targets for new builds so they should benefit.
Generally I read the Financial Press and stock recommendations/tips and if something seems to make sense then I'll check out what the gneral broker consensus is i.e. of 15/20 broker houses how many give strong buys vs sells etc. Then buy if I get the right gut feel. Haven't made millions yet though. Telecity was a good buy, Anite, Debenhams & Pace too. Apple I waited far too long and bought at $665 dollars currently $530.
Generally I read the Financial Press and stock recommendations/tips and if something seems to make sense then I'll check out what the gneral broker consensus is i.e. of 15/20 broker houses how many give strong buys vs sells etc. Then buy if I get the right gut feel. Haven't made millions yet though. Telecity was a good buy, Anite, Debenhams & Pace too. Apple I waited far too long and bought at $665 dollars currently $530.
Having only started recently myself (but now with several thousands in which is terrifying) my advice is below.
Read, read and read as much as you can until you know (even only a small amount) about most things which will come up and need decisions on.
Get this.
http://www.amazon.co.uk/The-Naked-Trader-anyone-tr...
Read it.
Read it again.
Set up a dummy account for practice; this is a really helpful way of learning how things work.
Read it again.
Do research on companies you may want.
Start with your own money.
Good luck. It can be very satisfying when in profit, but really really only put in what you wouldnt mind losing.
Read, read and read as much as you can until you know (even only a small amount) about most things which will come up and need decisions on.
Get this.
http://www.amazon.co.uk/The-Naked-Trader-anyone-tr...
Read it.
Read it again.
Set up a dummy account for practice; this is a really helpful way of learning how things work.
Read it again.
Do research on companies you may want.
Start with your own money.
Good luck. It can be very satisfying when in profit, but really really only put in what you wouldnt mind losing.
Been meaning to sign up to this site for a while: http://www.wallstreetsurvivor.com/
Supposed to be full of useful advice.
Supposed to be full of useful advice.
hammerrr7 said:
Thanks for the advice chaps - really useful.
How do I go about creating a dummy account?
I used this http://uk.fantasytrader.yahoo.net/ for 6 months and told myself if I can make 20% I will do it for real. Things (annoyingly) went well with the dummy account.How do I go about creating a dummy account?
I then set up a ISA NatWest stockbroker account, primarily because I bank with them already. They are by no means the cheapest and the app isn't as good as others... but because its an ISA I don't have to worry about paying any tax on gains (he says optimistically). The other thing about an ISA is you can't put in more than circa £11k per annum... good if you have self discipline problems.
Within the Natwest app there is a dummy account feature by the way.
Anyway, 1 year on and I've made about 50%. I work a 9-6pm office job so i can just about get away with this in the background. Basically free money!
Advice:
- Read, read and read. Do all your homework before buying a stock. There is plenty of volatility and coverage on US markets so I tend to lurk around those... the fees are larger and you're also against an exchange rate, but there's more potential in my opinion
- Shares need attention. Keep reading and looking into your investment. Don't be that guy who gets bored and checks back a year later to find everything pear shaped.
- Don't sell too early. The first few months I was buying and selling like I'm some kind of market trader... truth is you don't give the shares enough time to grow and most of it is taken up in the fee/commission.
- If you've done your research and as soon as you buy they start dropping, unless its blindingly obvious, don't get cold feet and sell out. Ride it out... remind yourself why you decided they are good value. I would have been on about 75% now if I'd held onto some key stocks a little longer.
- Try to keep a reasonably diverse portfolio.
- Don't just buy stocks because you 'like' a company or think they are 'in' right now. That has already been priced into the value. My best earner is a company I really don't like.
Lastly... and you won't understand this till you get into it - missing out on an opportunity to make £100 is much more agitating than loosing £100. DON'T WORRY... this is a normal feeling.
Anyway I'm a rookie but thought I'd let you know my thoughts primarily because you mentioned the Natwest app. That book looks like an interesting read... will be purchasing.
Thanks a lot for the advice all - I wasn't expecting such a great response however I was wrong. I'm going to be purchasing the book shortly and given I'm on holiday, perfect time to read it. I'll have a look at the NatWest App and see if I can create a dummy account - as like you, I also bank with them so made sense to begin with to keep everything simple!
Remember that all that matters is what is going to happen, not what has already happened, and nobody has a reliable crystal ball.
A lot of people buy because something has gone up and avoid because it has gone down. There's nothing wrong with buying when something has gone up if you think it's likely to go up more but not buying just because it has gone up and so on.
As for what you use to do it? It makes little difference really, not sure why you think it being done by you bank makes any real difference, look at what it does and how much it costs - not the software but the service.
A lot of people buy because something has gone up and avoid because it has gone down. There's nothing wrong with buying when something has gone up if you think it's likely to go up more but not buying just because it has gone up and so on.
As for what you use to do it? It makes little difference really, not sure why you think it being done by you bank makes any real difference, look at what it does and how much it costs - not the software but the service.
A few of my mates use the same app so my thinking was as I'm new to it all and should I get stuck or need help, I can point in there direction and get some help! Having had a look around NatWest seem to be there or there abouts as the system/software to use. Plus, as I bank with them it might make the transfer side a bit easier - who knows?
Well the banking/transfer bit should be easy anyway, having people around who understand the software is good although if it's not pretty obvious it's not great, the main issue is what NatWest charge you. Obviously they will charge you, it's a just a question of how much and on what basis and could be, for all I know, a good deal.
Well that is expensive on first sight, around £5 a trade is more competitive but it's complex, some have quarterly fees and some have minimum levels of activity. If you aren't trading much, and I doubt you would be, then £15 is still expensive but you'd be looking more in the region of £10 or £12 if you shop around. (I think, could be wrong, there may be better out there now)
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