ProperCharlie

never bought any shares before, but i am looking to make one or two modest investments. i've set up an online account, but haven't got a clue as to what to buy. i am not looking for something that will double my money over night; more like something stable that will pay a dividend and not go down the pan. the only thing i can think of is Sainsbury's, cos i spend so much money in there, but that's not a very good reason to buy them, is it? They do seem to pay out a reasonable div. though. anyway. any advice appreciated, and yeah, i know my investment may lose value etc etc

(accidentally posted this in muppets - they seem rather disinterested in the subject )

Wish

iTrader: (2)

Marks & Spencers would be a safe bet. Ive got a couple of grand in them and there share price seems to be low but stable at the moment.

I only play with shares so dont listen to me. Im no expert

Chip

Eurotunnel. Theyve got about £5billion of debts but so did Orange a few years before their shares went up by 1400%.

Chip.

imlach

Have a look at spread betting instead of normal share dealing. The profits are free of CGT (not a problem if you're under £7k/year of profits on normal share dealing).

IG Index

Edited to add that obviously you won't get dividend payments on spread betting, but you may make more money....(or lose more!).

[Edited by imlach - 12/13/2003 1:49:17 PM]

ProperCharlie

chip - i looked up eurotunnel on selftrade website and it says the shares are not tradeable? is that a mistake, or is it just cos it's saturday or something?

imlach - i have had a look at IG Index before, but as i know jack sh*t about markets i can only see myself loosing money.

Chip

Heard a lot about this spread betting. How does it work?

Dabbled in shares for years and done very well out of it(paid of mortgage, car etc) but not really looked into this spread betting lark.

Chip.

ADP

For goodness sake, how can you say M and S is a good bet?? No it isnt, well no more so than ANY other stock - thats very dangerous talk.

Take it from me, and a few others on here you should be VERY carefull about what you invest in. Yes, it can be easy to make a quick buck, infact at the moment Im well into a share thats outperforming the FTSE100 by 237% - equally I have some duffers too. Ive made money, Ive lost money, Ive learned by my mistakes and in all honesty I bet you will too.

Before you do anything, work out how much you want to spend, then ask yourself can you afford to loose this? Then if you can afford to loose the money, then read, read and read some more. I recomendhttp://www.fool.co.uk there are discussion forums on there for every stock, and it also sends you handy daily emails. There is also a very good book on the fool site, Id recomend buying it.

Once youve done some reading, If you want some basic advice - buy stocks that have a sensible chance of staying alive ie lower risk, such things as Shell, Lloyds TSB, BT etc are relatively low risk when you ask the question are they likely to be here in 5, 10 15 years time, the answer is probably Yes? Next thing to consider is how to diversify your portfolio, by this I mean dont buy in to 5 banks and nothing else. Id advice picking various companies from various sectors - by doing this you are taking away some risk ie if youd bought into all techs a few years back youd find that most of your stocks would be down, if youd diversified only some would be down. You also need to remember the cost of buying and selling. No good buying £100 worth of shares only to find it costs £20 to sell them, leaving you needing a 40% return to make £20.
Another question you should is ask, is what is your time frame for return and how much are you wanting to get back? Some people set themselves hard and fast rules ie they sell once theyve made 20%. This isnt a bad way to do things, it can stop you from being greedy.

Finally, read, but dont take individuals words to be gospel. No one can tell exactly what will happen, however some people will put some very good cases together as to why you should buy or sell - they may or may not be right - only you can press the buy button at the end of the day.

And if anyone wants to know what stock is 237% outperforming? mail me, but dont cry if its a penny share on Monday.

AP

(worth doing a search on this topic too)


[Edited by ADP - 12/13/2003 2:17:30 PM]

ProperCharlie

ADP - thanks for the pointers. i'm not looking to make my living out of shares. anything that i put into it i would be prepared to lose (not exactly what you want to happen, though, is it?). Like i said, i am not looking for a quick buck, i want to build up a bit of a portfolio over a few years. the idea is, i have a little spare cash now, if i stick it into shares i will be less likely to spend it than if it's just sitting in the bank. if i manage to stay wealthy over the next 10 years or so, it would be nice to have some investments at the end of it, rather than just a knackered liver and a big gut

imlach

On IgIndex, you can spread bet on ANY FTSE/DOW/NASDAQ share. You can buy futures for up to 3-6 months ahead, so it is not just for day-trading.

If you're not bothered about dividends, go for spread betting. It is free of CGT and I can see no reason why one would want to go down the traditional route rather than spread betting.

ie, as an example, lets take Vodafone (currently about 136p).

Buy 1000 shares of Vodafone traditionally, and it will cost you 136p*1000 = £1360.
If they rise 10% (150p), you'd make £136 minus any dealing costs & buy/sell spreads etc.

With spread betting, lets limit your max risk to same, £130. So, you bet £10/per penny of movement that Vodafone will rise. You set your stop at 123p so that your max loss is £130. If Vodafone falls to 123p, you lose £130. However, if Vodafone rise to 150p, you make £140 (14px£10). If it rises further, your gains are unlimited. So, if it went to 180p, you'd have made £440 (44p x £10) but only EVER with max risk of £130.

However with spread betting, your max exposure to the market was only £130 and therefore only tying up £130 of your funds for that period. With traditional share buying, it was tying up £1360 for that whole period.

This is called gearing. So you could have ten such bets for £1360 going, rather than just the one with your ordinary share buying.

Obviously you have to set stop loss points such that they are not too low and get activated too early with daily/weekly fluctuations etc. In the case of Vodafone, a stop at 120p might be too high.

[Edited by imlach - 12/13/2003 2:41:15 PM]

imlach

As a guide, by spread betting on the $/£ last week and the DOW, I turned £200 on Wednesday evening into £1300 by Friday morning.

That's 600% in 2 days.

ADP

bet it doesnt always go that well though eh? if it does, I need to get into it!

imlach

No, it doesn't always go THAT well, but can usually turn in a profit most days I turn my hand to it (even if some days it is only £40).

If I start the day with £200 and make a "win" of £400, I'm more tempted to raise the stakes with the £400 I never had at the start of the day, hence the gains can multiply quite quicky (as can the losses).....but still end the day with my original £200.

However, one can be quite strict and keep half the gains, and bet the other half, that way being quite conservative.




[Edited by imlach - 12/13/2003 2:50:46 PM]

douglasb

I would think that this is a very good reason to buy shares in Sainsburys. They are obviously doing something right if you keep going back as a (presumably) satisfied customer. People will always need food. Assuming that Sainsburys are trading profitably, they aren't about to go broke. I'd guess that Sainsburys would be a good solid share to have; unlikely to be a spectacular performer, but should give you some capital growth over the longer term.

Doug

chaos.

What sort of company is that then? Why do you think will be worth pennies when they start traiding again?

Why didnt you just sell when you were ahead if you believe they will be crap?

sorry I dont understand stock dealing


cha0s

Lust4Life

He's not saying its crap, just saying that if it does blow up then don't come crying to him.

Phil

Butkus

I've just had a look at IG index, and spread betting looks interesting, but don't you get killed on the spreads? In their examples they are quoting a sell at 670 and a buy at 675 in HSBC. Probably better for longer term trading? Am I correct or not?

[Edited by Butkus - 12/13/2003 5:02:35 PM]

imlach

Yes....for individual shares, the spread kills it for day-trading unless you are expecting a large movement. I don't really play on the individual shares, but if I was in it long term, I would.

I play the indices and the $/£ as the spreads are comparitively small compared to the daily movement. I also play the binaries - worth a read on them, as they are a good way to accumulate cash.

imlach

Worth checking out some of the other spread betting sites, as they may have tighter spreads on individual shares - deal4free perhaps?

ADP

http://www.moneyextra.com/stocks/LSE/TFC

like I said, enter at your own risk, its interesting though, because its a company that many of us probably use - RAC Navtrak, TrafficMaster etc...............

Butkus

I currently trade the S&P 500 futures, so haven't really paid much attention to UK indices. This could be interesting though, as the methods I use will work on anything.

Do you day-trade the indices and the currencies using spread betting?

imlach

Yes, I day-trade the indices and currencies using spread betting.

Butkus

Do you know of any good charting packages that are available for UK shares and indices?

V45DSM

Plough yourself a few thousand into 'Confederate Slave Holdings'. They took a bit of a dive back in 1863 and haven't really done much since, but hey, when at rock bottom there's only one place you can go.

TopBanana

My humble opinion on trading is that unless you're going to spend huge amounts of time researching (preferably do it full time), you can't expect to outperform the markets. Even then, you're not going to be ale to retire on it. I'd personally rather invest my free time in my own product / business. Just my $0.02

Butkus

jlanng,

I do it full time, and it's a nice way to earn a living. You can outperform the markets, and you can certainly do well from it.

You have to do whatever makes you happy though.

TopBanana

I'm sure you do. My point was that you can't expect to dip in and out of it and do so well.

imlach

jlanng - err...yes, you can dip in & out and do well. ie, when the Nasdaq hit 2000, I reckoned it was a fair bet we'd see some profit taking. So, I sold the Nasdaq. It fell.

Same with dollar/pound - we are at multi-year highs for the exchange rate....so bound to see some dips along the way.

If you are selective about when & where you go short/long on these indices, you can selectively make money.

Another example, if we've risen 5% on the week on the DOW, some profit taking usually kicks in. Short it & win.

Double D

how much does it cost to start an account with ig, i had an account with gci and wasn't happy with the way they done things, the trading platform seemed very slow,

imlach

IG only needs the amount deposited that you want to risk if you want a std limited risk acct.

If you want a credit account, I think you need to prove 5k worth of liquidity.

chaos.

Can you make a good living out of share buying/selling?
Is there a guide somewhere on the net that has a basic run down?
Whats the best sort of companies to buy into and whats a sensible amount of money to start gambling with?


cha0s