Getting into shares

[Lil' Joe]

Can anyone help me, a complete novice in this area, get to grips with investing in shares; how to begin, what to look for, advice, websites to follow etc etc.

Its something I have been often advised to have as an asset but never had the time or inclination to look into properly.

Many thanks,
Joe

[14-7]

Lil' Joe said:

how to begin

Have a look at online dealing services for low rate transaction fees. You can normally get away with between £5-£10 a transaction.

Lil' Joe said:

what to look for

I think that depends on your risk level and what you can afford to lose. Obviously none of us want to lose money but it does happen.

If, as you say, you are only just starting out it is a good idea to just sit and watch share movements and see what you are interested in.

If low risk then stick with the larger companies like United Utilities, BP etc. At least you know they aren't going to go under and you can still make good little profits from them year to year.

At the moment I prefer to split my investments in to portfolios consisting of cash, bonds and shares. Then from there I decide what risk I want to take with that specific portfolio and alter the percentage of each e.g. low risk - 40% cash, 20% bonds, 40% shares in FTSE 100 companies.

Lil' Joe said:

advice

My rules, that have developed over the years, are:

1) Always do my own homework and don't listen to others.
2) NEVER pay too much attention to internet chat rooms especially when someone starts saying buy this or that share.
3) Don't buy shares with money that you can't afford to lose.
4) Be prepared to take a loss. It's not nice but sometimes it's necessary.
5) Don't put all your eggs in one basket.

Lil' Joe said:

websites to follow etc etc.

I just use free services such as ADVFN and Yahoo finance.

I have been buying and selling shares for about 14 years now (some on here will know a hell of a lot more than me) and have lost as well as gained. The hardest bit was in my third or fourth year of buying and selling. I took a gamble and put everything I'd made in those first few years in to a share that someone else recommended as the next best thing, they are doing this and that, there is a good order coming through blah blah blah. Six months later I'd lost just over £15k.

I'm sure someone with some good advice will be along shortly .

[audidoody]

Open an online trading account with £1,000

Roll over your gains. Don't sell on a paper loss.

Be prepared to lose half of it in a year if you need to sell.

Accept you are in a casino with little logic.

[Fittster]

Read books:

A Random Walk Down Wall Street

Stocks for the Long Run, 4th Edition

The Little Book of Commonsense Investing

Website:

www.fool.co.uk
www.moneyweek.com

Or just do what everyone else on PH does and buy a load of junior miners.

Edited by Fittster on Monday 21st February 11:57

[RemainAllHoof]

Fittster said:

buy a load of junior miners.

And there was me thinking the child slave trade was illegal... oh... "miners".

[NorthernBoy]

audidoody said:

Roll over your gains. Don't sell on a paper loss.

That's weird. Many years ago, back when I was learning to trade, the very opposite was drummed into me.

If a position is losing money, telling you that your original rationale was wrong, why on earth would you keep running it?

[Lil' Joe]

Thanks for all the advice guys. What would you suggest would b a good starting amount to get into the swing of things with; hundreds, thousands, tens of thousands? I appreciate its whatever I can afford to lose, which to me at the moment is say £500-1000. Is this worth it?

[lockhart flawse]

I would say no. Making money from shares is not easy although it can appear to be easy in a rising market. If you only have a small amount available you might do better to let a professional work the market for you by making monthly contributions into a fund (Unit Trust). Choose a manager with a good record over 5-10 years. WWW.CITYWIRE.COM is a good starting place.

L.F.

[Fittster]

lockhart flawse said:

I would say no. Making money from shares is not easy although it can appear to be easy in a rising market. If you only have a small amount available you might do better to let a professional work the market for you by making monthly contributions into a fund (Unit Trust). Choose a manager with a good record over 5-10 years. WWW.CITYWIRE.COM is a good starting place.

L.F.

And the fees of the professional will make taking his advice a waste of time. You're better off with a tracker than paying to a fund manager who is statistically unlikely to beat the index.