How to learn about stocks/ stock market?
Discussion
Do not worry about the lingo. Any questions; just ask on here. As you say, there are no stupid questions. Plenty of people on here will give you answers in plain English.
These days it's highly unusual to own a stock market share directly and hold a share certificate in your hand. Everything is electronic, and private individuals are simply a name on some intermediate business's computer system. That intermediate business tells you how many shares you've got and tells the company that you own them.
One of the key principles of investing is to "spread your risk". The easiest way for most retail investors (you and me) to do this is to buy "funds" rather than individual shares. A fund is like a club which pools money from several investors and buys shares in several companies.
Another key principle of investing is to try to keep costs to a minimum. Unfortunately it's generally more expensive, as a percentage, to be small investor than a large investor. There is a small annual cost involved in owning a fund because you are paying a manager to run the fund for you. Many people consider that to be money well spent, because the manager should be an expert with access to mountains of detailed research into the individual companies.
As a beginner it's worth looking at the websites of businesses like Fidelity, who offer a comprehensive retail service at low cost.
One thing worth remembering is that it's almost certainly cheaper to buy funds through someone like Fidelity than to buy the same fund directly from the fund manager. They are, in a way, the equivalent of a Tesco.
These days it's highly unusual to own a stock market share directly and hold a share certificate in your hand. Everything is electronic, and private individuals are simply a name on some intermediate business's computer system. That intermediate business tells you how many shares you've got and tells the company that you own them.
One of the key principles of investing is to "spread your risk". The easiest way for most retail investors (you and me) to do this is to buy "funds" rather than individual shares. A fund is like a club which pools money from several investors and buys shares in several companies.
Another key principle of investing is to try to keep costs to a minimum. Unfortunately it's generally more expensive, as a percentage, to be small investor than a large investor. There is a small annual cost involved in owning a fund because you are paying a manager to run the fund for you. Many people consider that to be money well spent, because the manager should be an expert with access to mountains of detailed research into the individual companies.
As a beginner it's worth looking at the websites of businesses like Fidelity, who offer a comprehensive retail service at low cost.
One thing worth remembering is that it's almost certainly cheaper to buy funds through someone like Fidelity than to buy the same fund directly from the fund manager. They are, in a way, the equivalent of a Tesco.
Following my other post this could be a thread for me.
Sometimes the best way to learn is to have a go and there are intermediaries like Hargreavss Lansdown that allow you to set up dummy accounts that allow you to obtain virtual shares and have a play without handing over any money. You could practice on there whilst you learn the basics.
That's how I started getting into in and it seems to working out so far.
I also agree with the point mentioned above about it being more costly as a percentage for a small investor due to the commission fees on each trade (buy and sell).
Sometimes the best way to learn is to have a go and there are intermediaries like Hargreavss Lansdown that allow you to set up dummy accounts that allow you to obtain virtual shares and have a play without handing over any money. You could practice on there whilst you learn the basics.
That's how I started getting into in and it seems to working out so far.
I also agree with the point mentioned above about it being more costly as a percentage for a small investor due to the commission fees on each trade (buy and sell).
This is my job.
And I am going to sound like a broken record but I basically agree strongly with Mr Buffett.
Just invest regularly into index trackers.
If you think you are going to pick great stocks and outperform the market then you are wrong. You won't.
However, if you want to have "fun" treating investing as a hobby (which costs money) and being able to understand a bit more about the business news say, then fine - get stuck in.
But under no circumstances consider that your investments are going to make you rich and enhance your pension/savings.
That said, I am more than happy to answer any questions you have on PEs, EPS CAGR, ROIC, lease adj ND/EBIDAR etc...!
And I am going to sound like a broken record but I basically agree strongly with Mr Buffett.
Just invest regularly into index trackers.
If you think you are going to pick great stocks and outperform the market then you are wrong. You won't.
However, if you want to have "fun" treating investing as a hobby (which costs money) and being able to understand a bit more about the business news say, then fine - get stuck in.
But under no circumstances consider that your investments are going to make you rich and enhance your pension/savings.
That said, I am more than happy to answer any questions you have on PEs, EPS CAGR, ROIC, lease adj ND/EBIDAR etc...!
Greshamst said:
walm said:
That said, I am more than happy to answer any questions you have on PEs, EPS CAGR, ROIC, lease adj ND/EBIDAR etc...!
Brilliant, the guy says he struggles with the lingo and you give him a load of industry based acronyms. Helpful 
There are a lot of confusing acronyms!
Ozzie Osmond said:
Buying shares = driving with a manual gearbox. Totally hands-on.
Buying actively managed funds = driving with an automatic gearbox. Costs a bit more to buy and uses a bit more fuel but does a lot of work for you.
Buying tracker funds = passenger.
I think that's a near perfect PH analogy. Buying actively managed funds = driving with an automatic gearbox. Costs a bit more to buy and uses a bit more fuel but does a lot of work for you.
Buying tracker funds = passenger.
Also happy to help out if I can.
Not the same type of experience as Walm or DA, but basically self taught trader been doing this full-time since 08.
Started off with literally no knowledge of the markets just learnt along the way, and yes it is been one hell of a learning curve.
I will warn you the reality is you will experience more misery than you can imagine at first.
Not the same type of experience as Walm or DA, but basically self taught trader been doing this full-time since 08.
Started off with literally no knowledge of the markets just learnt along the way, and yes it is been one hell of a learning curve.
I will warn you the reality is you will experience more misery than you can imagine at first.
twinturboz said:
Not the same type of experience as Walm or DA, but basically self taught trader been doing this full-time since 08.
Started off with literally no knowledge of the markets just learnt along the way, and yes it is been one hell of a learning curve.
You have way more relevant experience than I!Started off with literally no knowledge of the markets just learnt along the way, and yes it is been one hell of a learning curve.
My own approach is straight out of kindergarten. No "trading" as such, simply "investing" in broad sectors/categories/geographies which appear to have opportunity for decent returns over the medium to long term - let's call that 5 to 10 years.
Some of the basic question include,
Something often overlooked about stock exchange indexes is that,
http://www.stockchallenge.co.uk/ftse.php
Some of the basic question include,
- Big companies or small companies?
- UK? USA? Far East? Global?
- Banks? Oil? Pharmaceuticals? Cars? Supermarkets? Airlines?
Something often overlooked about stock exchange indexes is that,
- FTSE 100 is the top 100 companies.
- FTSE 250 is NOT the top 250 companies! It's the NEXT 250 companies, i.e. numbers 101 to 350
- Also the FTSE 100 is NOT a collection of 100 similarly sized big companies. In reality a few mahoosive companies at the top dominate the index. For instance, at the moment the biggest company, HSBC bank, is 25 times bigger than Croda at number 100. HSBC is also double the size of Lloyds which is sitting right up at number 10!
http://www.stockchallenge.co.uk/ftse.php
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