Investing in Shares. Idiots guide
Discussion
I would like to swap across my ISA and place a small sum (say 10k) into shares, I was wanting to look at fintech.
Is this something I can do with my ISA by converting it, or am I limited in the choice of shares?
Also whats the idiots guide to buying shares in a lump sum and setting aside XXX money a month to be added to a portfolio.
Many thanks in advance.
Is this something I can do with my ISA by converting it, or am I limited in the choice of shares?
Also whats the idiots guide to buying shares in a lump sum and setting aside XXX money a month to be added to a portfolio.
Many thanks in advance.
Du1point8 said:
b
hstewie said:
hstewie said: Is your current ISA a cash ISA or a S&S ISA?
cash and want to fix it.- Open a S&S ISA
- Transfer your cash ISA to it
- Buy shares/funds/whatever
Choose your platform carefully because:
- Transfers take time
- Trading and holding fees vary between platforms
- Different platforms offer access to different markets and types of investment
Du1point8 said:
Can I dictate the shares I want or is it from a list only?
Say I wanted facebook or something more obscure?
(examples)
I have a few I want to buy in myself, but if my cash Isa can do it thats cool too
You can dictate but the platform you use has to offer the ability to buy the shares you want.Say I wanted facebook or something more obscure?
(examples)
I have a few I want to buy in myself, but if my cash Isa can do it thats cool too
Keep in mind if you want to buy these shares using cash you have in the bank you can have a Cash ISA and a S&S ISA so long as you don't exceed the allowances around what you can pay into each year.
My point being if you have £10K sitting in your bank account you don't need to take £10K out of your Cash ISA, you could open a S&S ISA and put in money from the bank account and leave the Cash ISA alone (provided you're within your allowances).
Important point that may not be obvious: Make sure you do a transfer of your ISA balance from your existing ISA to a new S&S ISA.
This is not the same as withdrawing everything from your existing ISA and then attempting to pay it into the new ISA. Doing this will use up some of this year's ISA allowance, and if you've already used it all then you won't be able to do this.
You need to tell your existing ISA provider and your new ISA provider that you want to transfer your balance, and follow their instructions.
As an aside, if you're new to stock market investment I would strongly advise against choosing individual shares to purchase. I would recommend that you invest in a global index tracker fund.
This is not the same as withdrawing everything from your existing ISA and then attempting to pay it into the new ISA. Doing this will use up some of this year's ISA allowance, and if you've already used it all then you won't be able to do this.
You need to tell your existing ISA provider and your new ISA provider that you want to transfer your balance, and follow their instructions.
As an aside, if you're new to stock market investment I would strongly advise against choosing individual shares to purchase. I would recommend that you invest in a global index tracker fund.
Dr Mike Oxgreen said:
As an aside, if you're new to stock market investment I would strongly advise against choosing individual shares to purchase. I would recommend that you invest in a global index tracker fund.
I agree with this point, but it depends whether you also want to learn more about business, equity investing, markets, etc..
You will learn far more by being actually involved yourself, so put most into a tracker, but in addition perhaps gradually build your own individual holdings. You will take far more interest in the particular businesses that you part own, and therefore gain knowledge as you go along.
Follow sensible rules though, because the odds of being able to pick the next Microsoft, Apple, etc. is close to zero.
History shows that thinking long-term does work. Hopefully when you reach retirement, there will be a worthwhile steady and increasing flow of dividends going into your bank account every month. History has also shown that dividends do form a significant part of overall returns. Prepare for share prices to fluctuate, but if a business can increase their earnings over time, then the share price will (eventually) follow.
Many large companies now have dividend yields over 5% which in isolation is satisfying, when comparing the present interest received on cash (savings accounts).
Good luck and enjoy your equity investing.
Edited by Jon39 on Sunday 9th September 21:03
Dr Mike Oxgreen said:
As an aside, if you're new to stock market investment I would strongly advise against choosing individual shares to purchase. I would recommend that you invest in a global index tracker fund.
It's all relative. 10k could be 1% for all we know, and therefore 'play money' and happy to lose it. ReaperCushions said:
Dr Mike Oxgreen said:
As an aside, if you're new to stock market investment I would strongly advise against choosing individual shares to purchase. I would recommend that you invest in a global index tracker fund.
It's all relative. 10k could be 1% for all we know, and therefore 'play money' and happy to lose it. Jon39 said:
Dr Mike Oxgreen said:
As an aside, if you're new to stock market investment I would strongly advise against choosing individual shares to purchase. I would recommend that you invest in a global index tracker fund.
I agree with this point, but it depends whether you also want to learn more about business, equity investing, markets, etc..
You will learn far more by being actually involved yourself, so put most into a tracker, but in addition perhaps gradually build your own individual holdings. You will take far more interest in the particular businesses that you part own, and therefore gain knowledge as you go along.
Follow sensible rules though, because the odds of being able to pick the next Microsoft, Apple, etc. is close to zero.
History shows that thinking long-term does work. Hopefully when you reach retirement, there will be a worthwhile steady and increasing flow of dividends going into your bank account every month. History has also shown that dividends do form a significant part of overall returns. Prepare for share prices to fluctuate, but if a business can increase their earnings over time, then the share price will (eventually) follow.
Many large companies now have dividend yields over 5% which in isolation is satisfying, when comparing the present interest received on cash (savings accounts).
Good luck and enjoy your equity investing.
Edited by Jon39 on Sunday 9th September 21:03
1. Buy individual shares. Realise they haven't got an edge and in fact are getting nowhere near the returns they should be getting given the level of risk they are taking.
2. Buy hot funds: Realise the fund managers haven't got an edge and in fact are getting nowhere near the returns they should be getting given the level of risk they are taking.
3. Buy global trackers
Derek Chevalier said:
I think a number of investors' journeys goes something like the following
1. Buy individual shares. Realise they haven't got an edge and in fact are getting nowhere near the returns they should be getting given the level of risk they are taking.
2. Buy hot funds: Realise the fund managers haven't got an edge and in fact are getting nowhere near the returns they should be getting given the level of risk they are taking.
3. Buy global trackers
LOL! Probably about right!1. Buy individual shares. Realise they haven't got an edge and in fact are getting nowhere near the returns they should be getting given the level of risk they are taking.
2. Buy hot funds: Realise the fund managers haven't got an edge and in fact are getting nowhere near the returns they should be getting given the level of risk they are taking.
3. Buy global trackers
Must admit we have some cash ISA money, which frankly we should have put into stock ISAs a few years back....but right now I would be a bit nervous to convert that to stock
My *personal* and *probably wrong* (!) view is that the markets have been on a general bull run for a long time now, & are due for some correction.
Clearly some 'experts' have been saying that for some time, & the market has continued up, so who's to say it won't keep on rolling.....but *personally*, I'd be nervous. & I would consider myself a med-to-high risk investor (the cash ISAs were just a side bet
bhstewie said:
hstewie said: How much emphasis do people put on dividends?
I always struggle with how it's OK to have your investment eroded if a business loses its capital value yet keeps paying 4% or am I seeing it through very different eyes to some who may be reliant on a dependable income?
Would you invest in property and ignore the rental income?I always struggle with how it's OK to have your investment eroded if a business loses its capital value yet keeps paying 4% or am I seeing it through very different eyes to some who may be reliant on a dependable income?
sidicks said:
Jon39 said:
The UK market (FTSE 100 excl. divs) has not continued up this year.
Down 5.31%.
Why exclude dividends? They are part and parcel of equity investment.Down 5.31%.
Answer - simply laziness, sidicks.
Most newspapers, TV, radio all just seem to quote the basic FTSE 100 Index.
b_tchstewie said:
How much emphasis do people put on dividends?
I always struggle with how it's OK to have your investment eroded if a business loses its capital value yet keeps paying 4%, or am I seeing it through very different eyes to some who may be reliant on a dependable income?
I always struggle with how it's OK to have your investment eroded if a business loses its capital value yet keeps paying 4%, or am I seeing it through very different eyes to some who may be reliant on a dependable income?
I think you are quite right, b_tchstewie.
It is slightly strange to receive an income, when in reality it is already our own money.
I don't know, but is it an historic arrangement, because shareholders like the system?
Mr. Buffett does not like dividends.
For those that do like that 'income', this year in the UK capital growth is weak, but percentage dividend increases are quite strong.
(your username seems to be triggering the censor)
sidicks said:
Would you invest in property and ignore the rental income?
No, but is it the same thing?I know house prices can go down but most people buy houses on the assumption they are also a capital investment rather than simple a yield, don't they?
Genuine question as when I look at the likes of Vodafone or BT they don't look like they'd have done well for an investor unless they were only interested in the pretty bankable dividend?
It depends on how the tax system is set up from time to time.
IMO with the government looking at ways to increase tax revenue it's entirely possible a new "unearned income surcharge" could be introduced, collecting more tax from share investments and pulling yet more tax out of the BTL sector. It might be seen as an easy political win, in line with St Theresa's pledge to "keep taxes down for ordinary working people". If she doesn't do it, Corbyn will!
- Waaaay back in the 1970s top income tax rate was 83% on earned income and there was an additional 15% charge on dividends etc. So a top income tax rate of 98%. (Yes, I really do mean that 98% figure). In contrast capital gains were taxed at 30%.
- By 2000 under New Labour the situation was completely different, with income and capital gains both taxed the same with a top rate of 40%.
- Now we have up to 45% tax on income and only 20% on capital gains (and an 8% CGT surcharge on residential property).
IMO with the government looking at ways to increase tax revenue it's entirely possible a new "unearned income surcharge" could be introduced, collecting more tax from share investments and pulling yet more tax out of the BTL sector. It might be seen as an easy political win, in line with St Theresa's pledge to "keep taxes down for ordinary working people". If she doesn't do it, Corbyn will!
Gassing Station | Finance | Top of Page | What's New | My Stuff