Stocks and Shares...
Discussion
I have always had a keen interest in regards to investing in the stock market and I have plenty of enthusiasm for it but one thing I lack is knowledge.
I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
Robatr0n said:
I have always had a keen interest in regards to investing in the stock market and I have plenty of enthusiasm for it but one thing I lack is knowledge.
I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
My 2 cents would be not to bother. Pay a couple of percent and get professionals to do it for you. That is after all what they do all day every day and are rewarded with megabucks for it. Either go passive and cheap by buying a FTSE tracker or more active and expensive by looking at actively managed funds offered by every man and his dog, Artemis and Jupiter spring to mind.I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
If you really want to invest in stocks and shares then only do it recreationally with money you are prepared to lose. This shouldn't be your pension money. You probably don't have time to track more than ten positions even vaguely and hence be prepared to have some spectacular blow ups - heard of Bear Sterns or Northern Rock?
Plenty of retail investors such as yourself losing their shirts there.
If it is just some fun then it can be extremely interesting I just wouldn't hope to get rich quick.
There are simply hundreds of books on this and more content on the net than you could possibly hope to read.
Personally for a good introduction I would watch some Kramer (Mad Money with Jim Kramer on CNBC). He is clearly just trying to put on good TV but the investment principles that he employs are what the majority of the professionals look at.
Investopedia could probably tell you all the acronyms you will need to know to understand what the hell he is talking about.
Finally I really want to reinforce that this should be play money you invest and not your future - at least at the beginning - think of it as a hobby and don't put more money into it than you would into a hobby.
Read all of Warren Buffett's letters to investors on the Berkshire Hathaway website and possibly buy the FT Guide to Investing for starters.
walm said:
Robatr0n said:
I have always had a keen interest in regards to investing in the stock market and I have plenty of enthusiasm for it but one thing I lack is knowledge.
I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
My 2 cents would be not to bother. Pay a couple of percent and get professionals to do it for you. That is after all what they do all day every day and are rewarded with megabucks for it.I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
Many advisory brokers will tell you to buy all kinds of s
t just to make their commision. Stay away from anyone who tries to get you into small caps and penny shares (IMO). Not all brokers are bad but finding a good one is getting increasingly difficult.
Broken Hero said:
walm said:
My 2 cents would be not to bother. Pay a couple of percent and get professionals to do it for you. That is after all what they do all day every day and are rewarded with megabucks for it.
My 2 cents would be to do your own research and then go to an execution only broker. That way if you fvck up its all down to you. Many advisory brokers will tell you to buy all kinds of s
t just to make their commision. Stay away from anyone who tries to get you into small caps and penny shares (IMO). Not all brokers are bad but finding a good one is getting increasingly difficult.
I specifically meant buying index tracker funds or using a proper fund manager who will manage your risk and exposure for you (across a significant number of stocks and/or asset classes).
Anyone recommending one or two stocks has something to sell.
walm said:
Robatr0n said:
I have always had a keen interest in regards to investing in the stock market and I have plenty of enthusiasm for it but one thing I lack is knowledge.
I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
My 2 cents would be not to bother. Pay a couple of percent and get professionals to do it for you. That is after all what they do all day every day and are rewarded with megabucks for it. Either go passive and cheap by buying a FTSE tracker or more active and expensive by looking at actively managed funds offered by every man and his dog, Artemis and Jupiter spring to mind.I have dabbled with spread betting and managed to end up pretty much where I started off but I will be the first to admit that I did not fully understand the market and mainly stuck to buying/selling gold and silver which seemed to pay off at the time.
I understand the differences between common stock and preferred stock but I have no idea where I would be able to gather the best information in order to read the market. It all seems like a foreign language to me at the moment but I guess that everyone has to start somewhere!
Would anybody be able to offer some advice as to how to setup and start investing in the stock market?
If you really want to invest in stocks and shares then only do it recreationally with money you are prepared to lose. This shouldn't be your pension money. You probably don't have time to track more than ten positions even vaguely and hence be prepared to have some spectacular blow ups - heard of Bear Sterns or Northern Rock?
Plenty of retail investors such as yourself losing their shirts there.
If it is just some fun then it can be extremely interesting I just wouldn't hope to get rich quick.
There are simply hundreds of books on this and more content on the net than you could possibly hope to read.
Personally for a good introduction I would watch some Kramer (Mad Money with Jim Kramer on CNBC). He is clearly just trying to put on good TV but the investment principles that he employs are what the majority of the professionals look at.
Investopedia could probably tell you all the acronyms you will need to know to understand what the hell he is talking about.
Finally I really want to reinforce that this should be play money you invest and not your future - at least at the beginning - think of it as a hobby and don't put more money into it than you would into a hobby.
Read all of Warren Buffett's letters to investors on the Berkshire Hathaway website and possibly buy the FT Guide to Investing for starters.
Paid megabucks to underperform the index - as you say in your next sentence, a tracker may be the way forward.
Not convinced that Cramer is all that good - although he makes for good TV.
NoelWatson said:
"Pay a couple of percent and get professionals to do it for you. That is after all what they do all day every day and are rewarded with megabucks for it"
Paid megabucks to underperform the index - as you say in your next sentence, a tracker may be the way forward.
Not convinced that Cramer is all that good - although he makes for good TV.
By definition ON AVERAGE fund managers will underperform the index (they charge a fee, the index doesn't).Paid megabucks to underperform the index - as you say in your next sentence, a tracker may be the way forward.
Not convinced that Cramer is all that good - although he makes for good TV.
That's why you should choose a fund manager with care.
Generally those who perform are paid megabucks and those that don't are still paid for a while, then fired.
I didn't mean to suggest buying on Cramer's tips (his Bear Sterns call is a particularly good example of when not to) but just that if you want an introduction to public market investing, understanding what he is saying is a place to start.
Pick a sector you have some knowledge of.
Do LOTS of research, poking around, e-mailing companies etc, may sound unorthodox, but works. I've contacted companies asking questions, some will deny, some will say 'no that's not us' so you can start to narrow things down.
Also, it's not what you know, it's who you know. I have a 'contact' who gave me some information on a certain order a company was making. Doing my research, I found that this order was not for existing work, but would be in advance for future work, and no news release had been made. Needless to say, that, coupled with high oil prices made a me a fair wedge.
However, i've waited 3 years to make a profit on one share, but I believed I had done my research correctly, and stuck with it.
I've lost lots on companies I didn't look into thoroughly. I don't make uninformed decisions anymore.
Do LOTS of research, poking around, e-mailing companies etc, may sound unorthodox, but works. I've contacted companies asking questions, some will deny, some will say 'no that's not us' so you can start to narrow things down.
Also, it's not what you know, it's who you know. I have a 'contact' who gave me some information on a certain order a company was making. Doing my research, I found that this order was not for existing work, but would be in advance for future work, and no news release had been made. Needless to say, that, coupled with high oil prices made a me a fair wedge.
However, i've waited 3 years to make a profit on one share, but I believed I had done my research correctly, and stuck with it.
I've lost lots on companies I didn't look into thoroughly. I don't make uninformed decisions anymore.
walm said:
NoelWatson said:
"Pay a couple of percent and get professionals to do it for you. That is after all what they do all day every day and are rewarded with megabucks for it"
Paid megabucks to underperform the index - as you say in your next sentence, a tracker may be the way forward.
Not convinced that Cramer is all that good - although he makes for good TV.
By definition ON AVERAGE fund managers will underperform the index (they charge a fee, the index doesn't).Paid megabucks to underperform the index - as you say in your next sentence, a tracker may be the way forward.
Not convinced that Cramer is all that good - although he makes for good TV.
That's why you should choose a fund manager with care.
Generally those who perform are paid megabucks and those that don't are still paid for a while, then fired.
I didn't mean to suggest buying on Cramer's tips (his Bear Sterns call is a particularly good example of when not to) but just that if you want an introduction to public market investing, understanding what he is saying is a place to start.
All of the above is good advice.
Avoid Advisory. Read up on Boiler Rooms, have a laugh and walk away. You'll have run out of money long before you find one of the good ones.
2 choices: Execution Only or Managed.
If Managed then 2 sub choices:
Big bucks? Put out to a professional discretionary manager.
Small bucks? Look into an ISA and buy a good tracker using Cost Price Averaging. Cheap and will guarantee benchmark performance.
If Ex only then there are hundreds of thousands of companies out there to invest in and you do not stand a chance in hell of knowing what is going up or down unless you pick a focus and stick to it.
Rule 1: Do absolutely nothing with small caps. They are pure rubbish and you will lose massively on market spreads, illiquidity and strange irrational price movements. It's a muppets game in the long run but the easiest to make sound glamourous.
Rule 2: diversify your risk. Choose a selection of stocks from across the main sectors.
Now, the above is pure factual common sense and if you ignore it you will lose money in the long run. Below is my personal perspective:
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Then, stick to your own market. Don't bugger about taking on currency risk to trade US or EU stocks, unless you are talking huge trades where it is financialy viable to hedge out the currency exposure.
Stick to stocks that you know and see in everyday life. Don't invest in something that you've never physically seen. You don't stand a chance of ever truly appreciating what they are.
Reckognise that the 7/8 biggest stocks in the UK ARE the FTSE 100. the Index cannot possible move without one of them moving. All other companies are tiny by comparison.
Also note that all of these top companies are household names, all have the tightest spreads, all are in the news every day and all of them represent the most important economic sectors in the world.
This is your group of stocks to invest in or trade in. Simple as that. No point in looking at anything else.
Study these companies, read about them each day in the papers, follow their price movements.
In a very short period of time you will suddenly realise that you have an extremely good understanding of when a price looks fair or when it is over valued, compare them to their peers int he same group.
These stocks move every day so are good for trading, while at the same time you can buy blocks each month, or quarter in an ISA etc for long term growth.
I have considerable experience at this game and have the huge privelage of watching people ignore my advice every day and lose all their money.
Avoid Advisory. Read up on Boiler Rooms, have a laugh and walk away. You'll have run out of money long before you find one of the good ones.
2 choices: Execution Only or Managed.
If Managed then 2 sub choices:
Big bucks? Put out to a professional discretionary manager.
Small bucks? Look into an ISA and buy a good tracker using Cost Price Averaging. Cheap and will guarantee benchmark performance.
If Ex only then there are hundreds of thousands of companies out there to invest in and you do not stand a chance in hell of knowing what is going up or down unless you pick a focus and stick to it.
Rule 1: Do absolutely nothing with small caps. They are pure rubbish and you will lose massively on market spreads, illiquidity and strange irrational price movements. It's a muppets game in the long run but the easiest to make sound glamourous.
Rule 2: diversify your risk. Choose a selection of stocks from across the main sectors.
Now, the above is pure factual common sense and if you ignore it you will lose money in the long run. Below is my personal perspective:
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Then, stick to your own market. Don't bugger about taking on currency risk to trade US or EU stocks, unless you are talking huge trades where it is financialy viable to hedge out the currency exposure.
Stick to stocks that you know and see in everyday life. Don't invest in something that you've never physically seen. You don't stand a chance of ever truly appreciating what they are.
Reckognise that the 7/8 biggest stocks in the UK ARE the FTSE 100. the Index cannot possible move without one of them moving. All other companies are tiny by comparison.
Also note that all of these top companies are household names, all have the tightest spreads, all are in the news every day and all of them represent the most important economic sectors in the world.
This is your group of stocks to invest in or trade in. Simple as that. No point in looking at anything else.
Study these companies, read about them each day in the papers, follow their price movements.
In a very short period of time you will suddenly realise that you have an extremely good understanding of when a price looks fair or when it is over valued, compare them to their peers int he same group.
These stocks move every day so are good for trading, while at the same time you can buy blocks each month, or quarter in an ISA etc for long term growth.
I have considerable experience at this game and have the huge privelage of watching people ignore my advice every day and lose all their money.
What is your aim ?
If you don't have one, have a good hard think about articulating one. Once you've done that, try hard to tie everything you do back to the aim. I am not saying you need one, but if you don't really have one, you're probably gambling, which is fine, as long as you realise this and put in the appropriate amount of money.
"oh well I'll let this loss run a little more as I think it's a good long term investment" - well if your aim is short term punting, you have already lost discipline. I have done this and probably all professional and amateur investors have made similar mistakes.
Make sure you keep asking yourself - what am I trying to do here.
Discipline and patience are the two most important skills in making money, it sounds oh so easy to master them, but it's not.
If you don't have one, have a good hard think about articulating one. Once you've done that, try hard to tie everything you do back to the aim. I am not saying you need one, but if you don't really have one, you're probably gambling, which is fine, as long as you realise this and put in the appropriate amount of money.
"oh well I'll let this loss run a little more as I think it's a good long term investment" - well if your aim is short term punting, you have already lost discipline. I have done this and probably all professional and amateur investors have made similar mistakes.
Make sure you keep asking yourself - what am I trying to do here.
Discipline and patience are the two most important skills in making money, it sounds oh so easy to master them, but it's not.
Horse_Apple said:
Rule 1: Do absolutely nothing with small caps. They are pure rubbish and you will lose massively on market spreads, illiquidity and strange irrational price movements. It's a muppets game in the long run but the easiest to make sound glamourous.
...
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Do you mean micro-caps and penny stocks? Small caps are slightly less liquid but are often a more interesting area to follow since they are less well followed and hence slower to react to news, allowing the little guy more of an edge....
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Investopedia defines small caps as $300m to $2bn. That would include plenty of interesting names: Dixons and Comet (Kesa), Premier Foods, Greene King, the Bing... (most of them total shockers but you get the idea...)
On the spreads - WTF?
If you have an execution only account then you are going to be paying pretty much a flat fee per trade. The spread on anything but the micro caps is tiny. Even the world's most comedy airline Silverjet is showing a <4% spread. We are not talking about spread betting here are we?
walm said:
Horse_Apple said:
Rule 1: Do absolutely nothing with small caps. They are pure rubbish and you will lose massively on market spreads, illiquidity and strange irrational price movements. It's a muppets game in the long run but the easiest to make sound glamourous.
...
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Do you mean micro-caps and penny stocks? Small caps are slightly less liquid but are often a more interesting area to follow since they are less well followed and hence slower to react to news, allowing the little guy more of an edge....
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Investopedia defines small caps as $300m to $2bn. That would include plenty of interesting names: Dixons and Comet (Kesa), Premier Foods, Greene King, the Bing... (most of them total shockers but you get the idea...)
On the spreads - WTF?
If you have an execution only account then you are going to be paying pretty much a flat fee per trade. The spread on anything but the micro caps is tiny. Even the world's most comedy airline Silverjet is showing a <4% spread. We are not talking about spread betting here are we?
What concerns me the most is that (although I know this is all good advice) as soon as anyone gets technical they may aswell be speaking Italian to me!
I definatly need to sit down and study a choosen Market until I understand exactly what I need to.
Horse Apple, is this something you do for a living by any chance?
I definatly need to sit down and study a choosen Market until I understand exactly what I need to.
Horse Apple, is this something you do for a living by any chance?
walm said:
Horse_Apple said:
Rule 1: Do absolutely nothing with small caps. They are pure rubbish and you will lose massively on market spreads, illiquidity and strange irrational price movements. It's a muppets game in the long run but the easiest to make sound glamourous.
...
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
Do you mean micro-caps and penny stocks? Small caps are slightly less liquid but are often a more interesting area to follow since they are less well followed and hence slower to react to news, allowing the little guy more of an edge....
Stick to blue chips. Tightest spreads, so cheapest to deal. Most heavily monitored stocks in the world so the lowest risk to adverse news, ie the CEO's helicopter crashing, or a bear raid or spiv trading etc.
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