Discussion
I have been saving some money for a while whilst being a student for the last year or so and would like to buy some shares as an investment. I have never bought any before, what or where is the best place to start?
Should I buy them through my bank, a broker or through a website such as selftrade.co.uk?
I am looking to invest about 2-3000 over a period of about year-18 months to start with.
Any advice would be helpful,
Thanks
J
Should I buy them through my bank, a broker or through a website such as selftrade.co.uk?
I am looking to invest about 2-3000 over a period of about year-18 months to start with.
Any advice would be helpful,
Thanks
J
Take a look at Motley Fool - their Sharedealing account is free until the end of the year. They do bunch the trades up together - trades after that will be £1.50 and you can DRIP (Dividend Reinvestment Plan) them which should compound nicely over a few years..
Worth a look at least!
http://www.fool.co.uk/news/investing/investing-str...
Of course it depends on how long term you want to be about all of this!
Worth a look at least!
http://www.fool.co.uk/news/investing/investing-str...
Of course it depends on how long term you want to be about all of this!
Don't do it!
A much better idea, in my opinion, is to decide what you are prepared to lose.
What you are prepared to lose, put in ultra speculative, very highly leveraged investments.
What you are not prepared to lose, put in something ultra safe. With that sum of money, that would be any bank account as it's guaranteed by the treasury.
A much better idea, in my opinion, is to decide what you are prepared to lose.
What you are prepared to lose, put in ultra speculative, very highly leveraged investments.
What you are not prepared to lose, put in something ultra safe. With that sum of money, that would be any bank account as it's guaranteed by the treasury.
Retard said:
Don't do it!
A much better idea, in my opinion, is to decide what you are prepared to lose.
What you are prepared to lose, put in ultra speculative, very highly leveraged investments.
What you are not prepared to lose, put in something ultra safe. With that sum of money, that would be any bank account as it's guaranteed by the treasury.
Actually very wise advice - be prepared to consider it lost, otherwise you'll be disappointed. If you lose an amount, you won't be disappointed!A much better idea, in my opinion, is to decide what you are prepared to lose.
What you are prepared to lose, put in ultra speculative, very highly leveraged investments.
What you are not prepared to lose, put in something ultra safe. With that sum of money, that would be any bank account as it's guaranteed by the treasury.
Something else that occurs to me, is transaction costs. I've no idea whether this is a competitive rate (in fact it almost certainly isn't), but Barclays are quoting £12 a trade for low volumes, which I would hope is what you were intending to do. So if you buy 5 shares and hold them for a year and then sell you will incur £120 of transaction costs. I.E. You've lost 4% before you begin. If you assume that your share portfolio returns 9%, a very risky assumption, then you've done worse than putting the money in a bank.
I'm also not sure what you will "learn" from doing this, as you have no way of knowing whether you did the right thing. If you turn that 3000 into 10000 this could be through by blind luck; conversely you might be the next Warren Buffett and lose all of it.
My "take huge risks with a small amount of money" seems a much safer and more honest approach to me.
Edit to add that obviously the transaction costs at the motley fool thing above make this a bit moot, but look very closely at the spread between their bids and offers.
I'm also not sure what you will "learn" from doing this, as you have no way of knowing whether you did the right thing. If you turn that 3000 into 10000 this could be through by blind luck; conversely you might be the next Warren Buffett and lose all of it.
My "take huge risks with a small amount of money" seems a much safer and more honest approach to me.
Edit to add that obviously the transaction costs at the motley fool thing above make this a bit moot, but look very closely at the spread between their bids and offers.
Edited by Retard on Thursday 15th November 08:13
Long term equity returns average 8%.
A portfolio of for example; Premier Foods, Lloyds TSB, Shell, and United Utilities will yield around 6.5% before capital growth.
This would IMO be a sensible start for a long term buy and hold portfolio with some nice capital appreciation upside.
IF any of the above companies shares fall to zero....then most likely there has either been a nuclear war, a major meteor impact or global economic collapse in which case your shares will be the least of your worries.
As for starting out with a small amount, again IMO, that's the best way, it takes time to get a taste and feel for what/when to invest.
A portfolio of for example; Premier Foods, Lloyds TSB, Shell, and United Utilities will yield around 6.5% before capital growth.
This would IMO be a sensible start for a long term buy and hold portfolio with some nice capital appreciation upside.
IF any of the above companies shares fall to zero....then most likely there has either been a nuclear war, a major meteor impact or global economic collapse in which case your shares will be the least of your worries.
As for starting out with a small amount, again IMO, that's the best way, it takes time to get a taste and feel for what/when to invest.
Agree on the LLoyds, have some of theirs kicking around for years, quite a dull investment though.
I really would be cautious of options at this stage, you really need a reasonable understnding to play, personally I use out of the money strikes as a hedge against an investment asset,(many different strategies) you would need to be aware which type you bought and even with the possibility of incresed value through gamma appreciation it could mean it is wortless due to decay at expiration (see enough B.S. in one sentence to put you off!) walk before running etc....!
maybe worth checking out some of the weekly/sunday share column tipsters, track their progress for a while before actually playing for real, you will get some idea, there would be nothing worse to your confidence than barrelling in and losing money straight off without an appreciation as to why this has occurred.
I really would be cautious of options at this stage, you really need a reasonable understnding to play, personally I use out of the money strikes as a hedge against an investment asset,(many different strategies) you would need to be aware which type you bought and even with the possibility of incresed value through gamma appreciation it could mean it is wortless due to decay at expiration (see enough B.S. in one sentence to put you off!) walk before running etc....!
maybe worth checking out some of the weekly/sunday share column tipsters, track their progress for a while before actually playing for real, you will get some idea, there would be nothing worse to your confidence than barrelling in and losing money straight off without an appreciation as to why this has occurred.
clubsport said:
maybe worth checking out some of the weekly/sunday share column tipsters, track their progress for a while before actually playing for real, you will get some idea, there would be nothing worse to your confidence than barrelling in and losing money straight off without an appreciation as to why this has occurred.
It's worth spending 6 months or so watching tips, reading the financial press, and getting a clear picture of why you think a certain stock is worth buying.
The biggest mistake that retail investors seem to make is going from being "chuch mice to street hookers" in one bound... what I mean is that one minute there putting everything into cash or housing, then next they're buying .com stocks or small cap miners.
Not suprisingly they invariably run up a big loss, quit investing and slump off muttering that "you might as well throw money down the drain"
thewave said:
What would you consider VERY high risk?
Say I wanted to 'gamble' 500 nippers on something that could make loads, but lose the lot. What would you suggest, because for £500 most investment houses don't want to know do they?
Might as well go the financial spreadbetting route.Say I wanted to 'gamble' 500 nippers on something that could make loads, but lose the lot. What would you suggest, because for £500 most investment houses don't want to know do they?
Read here: http://www.financial-spread-betting.com/
Practice here: www.tradindex.com
Lose here: www.igindex.co.uk (also has live graphs)
shadowninja said:
Although some people say never listen to tips.
-Darren
PS buy Toad. Please?
Sure, but if you are starting out and you see that some of the tipsters are often wrong you can be cautious and if a share you were considering anyhow is tipped, you can perhaps see a marginal bid on a moday morning -Darren
PS buy Toad. Please?
...You get to have an opinion on tips without advice..I do recall the madness of dotcom boom,,,,mates at a large US house were tipping (to market professionls purely for fun), a car wash that would take bookings over the internet and create a customer base...the main reason we all got involved was that they were going to use chimps to wash the cars
...enough people got involved for the stock to rise for a day or two before reality set in!clubsport said:
I do recall the madness of dotcom boom,,,,mates at a large US house were tipping (to market professionls purely for fun), a car wash that would take bookings over the internet and create a customer base...the main reason we all got involved was that they were going to use chimps to wash the cars ...enough people got involved for the stock to rise for a day or two before reality set in!
...enough people got involved for the stock to rise for a day or two before reality set in!
Love it.
I was working for an equity house at that time, before everything collapsed I remember some pikey engineering firm in Manchester anncounced that it was going to become a .com, just like that the shares doubled, I'm absolutely sure the directors just decided that they wanted to offload most of there retirement stock and just made it all up so they could get a great price.
It was a mad time wasn't it.
To Retard. If any of those stocks dropped by 50% they'd be yielding over 12% ..... you can't rule anything out, even a meteorite impact....but that doesn't make it very likely.
Edited by LeTim on Thursday 15th November 10:36
clubsport said:
Sure, but if you are starting out and you see that some of the tipsters are often wrong you can be cautious and if a share you were considering anyhow is tipped, you can perhaps see a marginal bid on a moday morning ...You get to have an opinion on tips without advice..
but that is the next level, really. Problem is that beginners just listen to tips and buy without doing their own research....You get to have an opinion on tips without advice..clubsport said:
I do recall the madness of dotcom boom,,,,mates at a large US house were tipping (to market professionls purely for fun), a car wash that would take bookings over the internet and create a customer base...the main reason we all got involved was that they were going to use chimps to wash the cars ...enough people got involved for the stock to rise for a day or two before reality set in!
...enough people got involved for the stock to rise for a day or two before reality set in! I had this idea of selling buckets of Reading soil online. (Obviously taking the piss out of people who set up companies that would have not been set up without the dotcom boom.) I could have made a million, I'm sure.shadowninja said:
but that is the next level, really. Problem is that beginners just listen to tips and buy without doing their own research.
They also have habbit of buying small illiquid stocks, which are highly volatile, and have a huge bid-offer spread...as you say on the basis of a single tip they read on motleyfool of found on some e-board.Still it's ever been thus.
shadowninja said:
I had this idea of selling buckets of Reading soil online. (Obviously taking the piss out of people who set up companies that would have not been set up without the dotcom boom.) I could have made a million, I'm sure.(Although they did disappear to France the next day)
Edited by Retard on Thursday 15th November 10:42
Not saying research at this stage, but just by following tips, you can see which companies and sectors are being reccomended and also if any of the tipsters are actually hot for a while, that could be of value?...or indeed the lesson of how how much bo110x is involved in all of this could also be learnt at an early stage 
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