27 replies to this topic

[Dan_05]

Anybody here have a dabble on the stock market?

Would be interesting to hear what stocks people are in and share any tips and experiences!

I've been 'playing' the markets for about a year or so now, built up a small portfolio and I expect like most peoples it's a mixed bag with some success stories and some disappointments!

[David]

Remember the value of stocks can go up as well as down...

[Damsel]

Tell me about it. I have (or should that be had (as they're now worth jack)) shares in Lloyds Banking Group.

I knew I should have sold them when they were trading at £13 a share

[shortguy]

Tell me about it. I have (or should that be had (as they're now worth jack)) shares in Lloyds Banking Group.

I knew I should have sold them when they were trading at £13 a share

Ha ha! Should have bought them when I did at 64p a share......oh hang on they have halved....Damn ...but who knows in 10 years time? Always buy in the knowledge that you might lose all the money and it could take years to make some (But potentially much, much more than a savings account)

Other than that I have a few others, but the best thing is an Index tracker...easier, safer and cheaper! mine has returned 27% so far, try getting that at a savings bank.

[Dan_05]

I invested in Sound Oil last year, an oil exploration firm in Italy, all the brokers were pointing to a 'sound' future as they kept putting, I'm currently down 50% of my investment as the stock dropped through the floor and hasn't made a come back yet. As with all shares though, it's only a loss if you sell.

Made a few mistakes on the other end of the spectrum too by being too greedy, had a share which was up 50% in a month, wanted to wait until it was a little bit higher to sell, that day didn't come and I'm back to being 20% up now, going to wait for the next rise on that one.

Best share I have at the moment, but only for those who like high-risk high reward shares is a company called Red Emporer, they have 20% of an oil drill in Somalia, the country which our Government are amazingly all of a sudden wanting to help as much as possible on the prospect that they are about to become a big oil player. The share is at 21p at the moment, if they find the black stuff, which we should know in the next month, it's going to see some big gains overnight. I've been in them since Christmas at 13p and it's all looking very positive at the moment.

[CmdKeen]

Investing in the stock market, without applying the correct frame of mind will always be "disappointing", you could always have sold at the perfect peak or bought at the perfect trough, bought more, sold less.

My main tips (in no way professional advice *legal warning* ) are the simple ones. Invest long term, far too many professionals play the market short term and they use vast amounts of technological and mental wizardry. Plus the commission costs for small traders will require you to either invest very large amounts or get massive gains in a short timeframe to make a net profit.

If you want to play the individual stock picking game, and a bit if you want to invest in funds (exchange traded or otherwise) then there are several aspects to think about:

• Foreign or domestic exposure? The UK isn't growing as quickly as emerging markets (or the US). Do you want to expose yourself to foreign shares. You face exchange rate fluctuation, but funds that invest in foreign shares can offset this by hedging out the currency risks. Emerging markets are probably best left to funds because you likely don't have the language skills to do the necessary analysis
• Growth or blue chip? Do you want the value of the investment to go up or are you looking for a decent dividend return. Plenty of stocks, blue chips, are paying dividend rates well above what you'll receive in interest from a bank. Alternatively you have corporate bond funds to invest in.
• Risk? How comfortable are you with it? If no risk then stay away. Low risk is probably blue chips, index trackers and funds that advertise as low risk. Higher risk = pick your own stocks, jump into emerging markets, special situations funds etc

If you do pick stocks yourself think about several things. Valuation currently, is it undervalued? There are plenty of bargains to be had in any time of uncertainty. Does the company have good long term prospects, does the market it operate in have good long term prospects? Is there a barrier to entry that stops a competitor coming along and eating into the margins?

Another thing to consider is George Soros' idea of one way bets. Is the potential downside so low compared to the upside for some reason that the risk / reward ratio is skewed compared to the price?

If you pick decent companies with solid long term prospects and invest for a number of years you should come out well from the experience. Sit through the highs and lows.

However there is also a degree of bide your time. I bought my first shares in the summer when the market was at rock bottom. I'll explain my decision making process for some of them:

• RBS - 32% return. Implicit state guarantee meant it just wasn't going to fall further. The share price had fallen about as far as it could in my opinion. It was flogging off the bad stuff, laying off staff and poised for a rebound. The potential downside was losing my investment, the upside was huge (if it returned to anything like the prices of non-bailed out banks). Each stock is still worth very little but it is worth more so I'm happy
• Admiral - 31% loss. My only currently net loss. My brother works there are I didn't do my research properly. Lesson learnt. Long term it should work as a cash cow (the dividend rate is good) so I'm going to hold it and not realise my loss.
• Apple - up 47%. My one foreign investment. Apple has a P/E of 15.45 and was ~13 when I bought in. Which is absurdly low for a company with the profit growth it has. It's products are still selling quicker than they can build them and 1/5th of the company's value is cash the company holds. Long term it looks safe if it still this profitable during the recession.
• BP - up 7%. Hasn't really paid off yet. This was another "I don't think it will go lower" buy post Deepwater. The company should be a decent long term bet as long as it gets its safety house in order. Again it pays decent dividends.

I do hold other ones as well, but some of those give away who I work for so I probably shouldn't do that on a discussion about stocks!

Finally - use an ISA!!! You get a much higher limit on a stocks and shares ISA than a cash one as well.

[Merlin820]

For anyone who might be interested but would like some experience before you spend real money, this site is pretty good.

Link: Halifax Building Society

[CmdKeen]

Google Finance is also a decent place to do basic research, they also let you put together a portfolio tracker, real or imagined.

As a stock broker I can recommend Hargreaves and Lansdown who have a pretty decent online setup and offer decent discounts on some managed funds. They also publish lots of share research (available to the public I believe) on their website. Useful to check if only because it aggregates together several different analysts ratings of stocks so you can see if a broad consensus (Buy, Hold, Sell) exists for a stock.

[Dan_05]

[list] My brother works there are I didn't do my research properly. Lesson learnt.

Some very good points CmdKeen!

I think you hit the nail on the head with the research line, research is definitely key before jumping into a stock, the market works in funny ways and news being released by a company which appears to be good can sometimes end up with a drop in share price. Happened to me this week, nice gas discovery announced, share price opened up, was down within the hour, but ultimately the fundamentals for the company are good and I'm happy to hold as I'm still in profit and believe we will see decent gains in the near future.

Emerging markets wise, I've had some excellent returns in the Aberdeen Emerging Markets fund, my late Grandad who was very into share dealing swore by them and said they were an excellent place to keep your savings for a few decades in an ISA.

[CmdKeen]

Aberdeen are good, and I do hold one of their unit trusts as an automatic monthly investment as there aren't any fees associated with buying them.

That said they are a competitor to my employer so they aren't the best

[Dan_05]

That said they are a competitor to my employer so they aren't the best

haha hope they don't know your PS.com username!

[DukeDan]

I've been into shares (and previous metals) for just over a year now. My mum started a few months ago and is annoyingly doing better than me even though she'll buy shares for a alcoholic beverage company "because everyone loves alcohol".

I've actually got about 5 times more cash in my trading account than the value of my shares! I've been too reticent in past 6-9 months, but seeing my mum doing well and my current portfolio doing the same, I'll probably get back in.

I use The Share Centre whom I chose because of their low rates, their dealing options and their fund supermarket. I can't say how it compares to others in service but I've never had any complaints about them.

[Dan_05]

A good rise over the past few days in Red Emporer which I mentioned the other day, it's now upto 27p, annoyed I didn't buy more at 13p now!

I lost patience with one share today and sold out, only a couple of hundred quid profit as it just didn't seem to be going anywhere, on the look out for the next one to dip my toes into now!

[Reado]

I am getting £250 + 35% in shares for my company for the next 3 years, Sell them at the end at what ever level they are are and get a house, jobs a good one


Did it with £100 last year and I could by a new car, or invest it....

[Kellym82]

I need some simple advice - I'm looking to buy some shares in a company over a long period of time (i.e. I don't want to be trading day in day out) - what is the best way of doing this?

I literally want to buy shares in said company, and then leave then to grow (hopefully!)

Thank you

[CmdKeen]

I need some simple advice - I'm looking to buy some shares in a company over a long period of time (i.e. I don't want to be trading day in day out) - what is the best way of doing this?

I literally want to buy shares in said company, and then leave then to grow (hopefully!)

Thank you

Get a Stocks and Shares ISA through any one of many providers, your bank will do one, I use Hargreaves and Lansdown, others have been recommended. That way you don't pay any tax on dividend income or capital gains (when you sell the stock for a profit).

You'll pay a commission for each transaction so your best bet is to buy all the shares in one go. Small value transactions will look really nasty due to the commission, but it tends to be fixed cost (apart from Stamp Duty, a tax) so £1000 worth costs the same as £100.

Then just sit there and leave it...

[DukeDan]

CmdKeen, can I ask about ISAs? I'm not quite clued up on them. I don't have an ISA shares account and I don't make enough profit to have to pay CGT. Is there still an incentive for me to get one?

[Dan_05]

Disaster of a day on the markets today, all my shares are down, I was planning to short a share yesterday as I could see it dropping day by day but was still waiting for some funds to clear so didn't get the chance, the share dropped by £1 today, gutted!

[CmdKeen]

They're recovering a bit today though, and my one bad performer Admiral is up 11% at the moment on good results. Still down 27% overall but a nice recovery and shows the benefit of waiting stuff out if you think the company isn't on the skids.

In terms of ISAs they are Individual Savings Accounts which the government set up to encourage saving. The idea is that you can pay in a set amount per year (~£3k for cash and ~£6k for shares) which are then protected from tax. I believe the shares one is a higher amount because the nation gets a benefit from money being invested rather than stashed in cash.
You should always max out your ISA allowance in any year before doing any other forms of saving (though paying off debt* is always No 1 on the financial good ideas front).

The idea is that basically you don't pay tax on the proceeds of the return, which for cash is the interest paid and for stocks will be any dividend and the profit made on any sale.

Also once things are in an ISA they are there until you take them out. So if you whack in a couple of thousand pounds a year for 10 years you'll have a fairly hefty chunk of money sitting there free of tax. So whilst you might not face a tax liability now it means you don't reduce your ISA allowance in a future year adding them to the ISA when you decide to add them. There is (as far as I know) no downside to having an ISA so you are not disadvantaged by placing them in there.

Plus it takes a little bit of time to set one up, as with any account, so getting it done now rather than finding some killer deal in the future that you need to invest in NOW NOW NOW could be of help, albeit unlikely.


* Mortgages and student loans don't count here, I mean credit cards and loans that you can repay early

[Dan_05]

A very good day today for me, Red Emporer my main holding released news that they have discovered gas and oil half way down their drill site in Somalia, they are up 31% to 33p, plenty to go with this one too as the broker targets are over £1 if this well is successful, the risk on this has been significantly reduced today with this news, can see this being a share of 2012.

One point on ISA's I would highlight which we unfortunately have recently discovered with the passing of my grandad, you have to pay a small fortune in probate to get the ISA transferred if it was only in the holders name. We have been quoted £5,000 to do the probate to sort out the contents of the ISA!

I would recommend for anybody with a family, at some point put a loved one on the account just incase anything happens to you so the gits don't take aload of your hard earned money when you die.

Edited by Dan_05, 07 March 2012 - 06:28 PM.

[DukeDan]

Thanks CmdKeen, all useful stuff. I'll +1 you in another post where it counts, probably regarding a subject that we disagree on to fufil my daily quota of irony. And Dan_05, I shall look into an additional person on the account.

[stevo1001]

Was not aware you could put someone else on an isa... The idea of "individual savings account" states that. Good idea but unfortunately not an option, can only do taxable savings and or term deposits with or on the basis of another individual

[Dan_05]

Quite right, you can't have another account holder, but you can apparently look at 'trust' options, though the FSA don't seem to like the idea by the looks of things and just want the money, they see no problem in taxing an ISA after death regardless of it there is a spouse.

There is quite a bit of information out there now on the 'ISA trap', we were told by the bank the other month that a number of companies now offer ways to avoid having expensive probate charges to deal with ISA's and Pep's.

[Dan_05]

This has been a pretty good month on the market, seems a lot of stocks are regaining their 2011 losses, with the US economy starting to look better, should see some nice gains, FSTE approaching that 6000 point barrier today. I've now seen Red Emporer rise over 100% in less than 2 weeks, hopefully more to come if they strike oil in Somalia in the next few weeks

[Griffin]

I'm in a works scheme that I have mixed feelings about.



Basically I save £x for 3 years, and then we can use that fund to buy shares at a price set at the outset, or if the share price is lower than the offer price you get your investment back. There's also a small bonus if you stay in. The downside is that if you leave the firm, you just get your contributions back and you have to leave the scheme


I really want to join the regulars, so in a weird way I'm hoping that I don't reach the 3 years.... So far we're about 60p a share up 9 months in :-)


correction, just looked and we're 70p per share up.

Edited by Griffin, 14 March 2012 - 09:41 PM.