The Shares thread

[The Doctor]

What's the difference between that and a normal Isa? do they put your money into shares of a company of your choice?

they invest part of the money into shares, not sure whether you get to choose which company though.

[blue blood]

they invest part of the money into shares, not sure whether you get to choose which company though.

a self invested ISA account allows you to trade shares up to £10200 a year and all profits are tax free.

[Bellend Sebastian]

If people are talking about investing serious money in the stockmarket (I mean thousands rather than hundreds, or at least a significant part of their actual wealth), for goodness sake PLEASE only invest in single shares if you've got a VERY good idea of what you're doing.

It's notoriously difficult to make money buying and selling shares as an individual. To make an informed prediction about the movement of a stock you've got to have a pretty good knowledge of that company's accounts, trading activities, the market in which it trades, etc etc etc, and let's be honest as individuals we don't have this, or indeed any interest in it. You can still pick a stock on a hunch and see it soar in value, but in most cases that's going to be down to luck as much as anything and it doesn't make you a share expert.

Unless you're unusually well informed on such matters or have a burning desire to study markets in minute detail, buying stocks and shares is actually a lot like going down the bookies and you should apply the same rules as you would there, that we've already mentioned (only bet money you're prepared to lose, know when to stop etc).

HOWEVER

Although single shares are a bit frightening and fraught with risk (don't forget that a lot of companies fail, even big ones, and your share holding can become worthless) us mere mortals can participate in stockmarkets via what are generally called 'collectives'. A collective is basically a big pot of lots of different shares, and you then buy shares or units in the big pot, so you effectively end up owning lots of different shares, thereby spreading the risk. Unit trusts, OEICs, and ICVCs are the most common sorts of collectives (they're much the same thing to all intents and purposes) and the most likely place you'll encounter them is if your bank tries to flog you one via a Stocks and Shares ISA. I think you can still get single company ISAs, but to be honest I never see them and I'm at a loss as to why anyone would really want them as they're ridiculously high risk.

Collectives fall into two main categories, actively managed and passively managed. Actively managed means you've got a fund manager who is making decisions on what to hold as part of his or her fund, and is actively buying and selling in an effort to boost the fund's performance. Passively managed means that the fund replicates an index, like the FTSE 100, and will just contain the stocks that make up that index, and because a computer can do that, these funds are usually a lot cheaper. Debate rages over whether it's worth paying for active management over passive, mainly because if you compare an average actively managed fund with a passive one, there's not that much difference in performance, but that's the AVERAGE, and of course there are fund managers out there who are much better than average.

There are thousands of different collectives available, but compared to individual shares they're relatively easy to research. They're not risk free by any stretch of the imagination, and if you buy the wrong sort at the wrong time they can still plummet in value. If you buy an actively managed fund though, its very purpose is to provide a return and you can be sure that the fund manager will be doing all they can to achieve that as that's what they're paid for.

I don't know if this is helpful or if it will have you all running for the hills

[blue blood]

If people are talking about investing serious money in the stockmarket (I mean thousands rather than hundreds, or at least a significant part of their actual wealth), for goodness sake PLEASE only invest in single shares if you've got a VERY good idea of what you're doing.

It's notoriously difficult to make money buying and selling shares as an individual. To make an informed prediction about the movement of a stock you've got to have a pretty good knowledge of that company's accounts, trading activities, the market in which it trades, etc etc etc, and let's be honest as individuals we don't have this, or indeed any interest in it. You can still pick a stock on a hunch and see it soar in value, but in most cases that's going to be down to luck as much as anything and it doesn't make you a share expert.

Unless you're unusually well informed on such matters or have a burning desire to study markets in minute detail, buying stocks and shares is actually a lot like going down the bookies and you should apply the same rules as you would there, that we've already mentioned (only bet money you're prepared to lose, know when to stop etc).

HOWEVER

Although single shares are a bit frightening and fraught with risk (don't forget that a lot of companies fail, even big ones, and your share holding can become worthless) us mere mortals can participate in stockmarkets via what are generally called 'collectives'. A collective is basically a big pot of lots of different shares, and you then buy shares or units in the big pot, so you effectively end up owning lots of different shares, thereby spreading the risk. Unit trusts, OEICs, and ICVCs are the most common sorts of collectives (they're much the same thing to all intents and purposes) and the most likely place you'll encounter them is if your bank tries to flog you one via a Stocks and Shares ISA. I think you can still get single company ISAs, but to be honest I never see them and I'm at a loss as to why anyone would really want them as they're ridiculously high risk.

Collectives fall into two main categories, actively managed and passively managed. Actively managed means you've got a fund manager who is making decisions on what to hold as part of his or her fund, and is actively buying and selling in an effort to boost the fund's performance. Passively managed means that the fund replicates an index, like the FTSE 100, and will just contain the stocks that make up that index, and because a computer can do that, these funds are usually a lot cheaper. Debate rages over whether it's worth paying for active management over passive, mainly because if you compare an average actively managed fund with a passive one, there's not that much difference in performance, but that's the AVERAGE, and of course there are fund managers out there who are much better than average.

There are thousands of different collectives available, but compared to individual shares they're relatively easy to research. They're not risk free by any stretch of the imagination, and if you buy the wrong sort at the wrong time they can still plummet in value. If you buy an actively managed fund though, its very purpose is to provide a return and you can be sure that the fund manager will be doing all they can to achieve that as that's what they're paid for.

I don't know if this is helpful or if it will have you all running for the hills

Very informative!!

My own strategy using money i won at a casino (money i never had and i can afford to loose) is to invest accross multiple companies in multiple sectors. This for me spreads the risk. The bit about doing research is actually quite fun! there are some well known websites like www.iii.co.uk www.advfn.com etc that have a wealth of information on companies one is looking to invest on. I find BB's very hit and miss and its only worth listening to about 1% of posters as the othere 99% dont really have much of a clue.

If one has a strategy, sets tight stop losses (8% for me) and does indepth research then it is possible to beat a traditional savings account

[Tommy G]

Made £400 last year when the Lloyds shares plummeted, bought low and sold a few months later. I mean they were never going to go out of business were they.

I would have put some into BP a month or so ago but it's a bit too late now and the price is recovering

[Bellend Sebastian]

Very informative!!

My own strategy using money i won at a casino (money i never had and i can afford to loose) is to invest accross multiple companies in multiple sectors. This for me spreads the risk. The bit about doing research is actually quite fun! there are some well known websites like www.iii.co.uk www.advfn.com etc that have a wealth of information on companies one is looking to invest on. I find BB's very hit and miss and its only worth listening to about 1% of posters as the othere 99% dont really have much of a clue.

If one has a strategy, sets tight stop losses (8% for me) and does indepth research then it is possible to beat a traditional savings account

It sounds like you give it a lot more thought than most, and are realistic about your expectations too. Aiming to beat a savings account is a good benchmark - anything more really is a bonus.

Made £400 last year when the Lloyds shares plummeted, bought low and sold a few months later. I mean they were never going to go out of business were they.

I would have put some into BP a month or so ago but it's a bit too late now and the price is recovering

I agree that Lloyds were unlikely to go out of business, but then again no-one thought Lehman Brothers would fail and it did.

It's true though that perfectly sound companies get caught up in negative sentiment when a sector is struggling, and Lloyds is a good example of this. This is when there are often bargains to be had - it's just that it's not always easy to tell which are the companies with fundamental problems and those that are just out of favour

[blue blood]

It sounds like you give it a lot more thought than most, and are realistic about your expectations too. Aiming to beat a savings account is a good benchmark - anything more really is a bonus.

I agree that Lloyds were unlikely to go out of business, but then again no-one thought Lehman Brothers would fail and it did.

It's true though that perfectly sound companies get caught up in negative sentiment when a sector is struggling, and Lloyds is a good example of this. This is when there are often bargains to be had - it's just that it's not always easy to tell which are the companies with fundamental problems and those that are just out of favour

so true. I think the yanks allowed Lehman Brothers to go under - and we all know the repurcussions of that one!! I think for another Lehman Brothers to go under would 100% bring on the double dip, if BP went under then that would have had the same effect too.

I made a few hundred out of Barclays but the banking sector is far too volatile at the moment. The FTSE100 & S&P500 etc is all over the shop at the moment and boundaries seem to be tested every week. Bargians are out there.

just last week i was looking at Micro Focus (MCRO) on the back of large director buys - they were around 290 and today they are at 350!! missed the boat there but there is no point trying to chase a plane down the runway, I will wait for the next plane.

With my inital investment i aim to hit 25% profit each year, reinvesting as i go along i aim to have a nice little next egg in 10-15 years. i think 15%-25% is a good target. The bit i am still learining is when to turn a paper profit into a profit in the bank.

[cambridgefox]

It sounds like you give it a lot more thought than most, and are realistic about your expectations too. Aiming to beat a savings account is a good benchmark - anything more really is a bonus.

I agree that Lloyds were unlikely to go out of business, but then again no-one thought Lehman Brothers would fail and it did.

It's true though that perfectly sound companies get caught up in negative sentiment when a sector is struggling, and Lloyds is a good example of this. This is when there are often bargains to be had - it's just that it's not always easy to tell which are the companies with fundamental problems and those that are just out of favour

I made 5k in less than a week with lloyds shares,however i dont think they are a good buy at the moment as when the gov bought them out they were,i think .75p.if they reach that the gov might release some shares,and this could bring the price down.is this right BS?mind you my shares before in lloyds were about 25k before the crash and now worth a tenth of that.my wife gets saye with them,so get more shares each month for the money.Its a long term thing for me and the shares are deducted before the pay and the bank match them.so when i get my divs back and my portfolio gets bigger and if the shares go up in the longterm im laughing!(again)

[Bellend Sebastian]

I made 5k in less than a week with lloyds shares,however i dont think they are a good buy at the moment as when the gov bought them out they were,i think .75p.if they reach that the gov might release some shares,and this could bring the price down.is this right BS?mind you my shares before in lloyds were about 25k before the crash and now worth a tenth of that.my wife gets saye with them,so get more shares each month for the money.Its a long term thing for me and the shares are deducted before the pay and the bank match them.so when i get my divs back and my portfolio gets bigger and if the shares go up in the longterm im laughing!(again)

I'm really not an expert in holding individual shares (and my status as an expert in anything is questionable) but I don't think that this should have any noticeable effect on existing shares as they're just releasing more of the capital value of the company. Can anyone else shed any light on this?

Your story neatly sums up the pros and cons of holding individual shares - you can make big money quickly, but you can lose it quickly too.

It obviously makes sense to make use of a share save scheme as you're acquiring shares at a bargain price, but if you've been in it a long time and got a massive shareholding then I'd be a bit wary about having all your eggs in one basket. I'm not really sure how share save schemes work, but presumably you can dispose of part of your holding if you want to? Not that I'm telling you that you should, always seek the advice of a properly qualified and authorised individual.

[James.]

I'm really not an expert in holding individual shares (and my status as an expert in anything is questionable) but I don't think that this should have any noticeable effect on existing shares as they're just releasing more of the capital value of the company. Can anyone else shed any light on this?

Not sure what the poster means by the government "releasing more shares" but in a general sense additional share issuance shouldn't affect the value of your investment as you will be given the option to buy these additional shares at a discount (thus offsetting the dilution effect of increasing the number of shares available). That's what happens in a rights issue anyway, not sure what the government are planning with Lloyds.

[Tommy G]

Not sure what the poster means by the government "releasing more shares" but in a general sense additional share issuance shouldn't affect the value of your investment as you will be given the option to buy these additional shares at a discount (thus offsetting the dilution effect of increasing the number of shares available). That's what happens in a rights issue anyway, not sure what the government are planning with Lloyds.

I think what he might of meant, hence might...is that Lloyds issued a load of new shares at a cut price of the current market value at the time. I think it was 33p when the live price was about 70 odd p. Anyone who had a holding at a particular date could buy up to 2/3 of their holding at that price and were allowed to sell immediately.

I did that but didnt sell straight away, If I remember the share price held ok for a while then dropped and was up and down for a while, I managed to sell at a peak. I probably could have made more If I had sold straight away.

I know a guy who made just over a million in a few weeks on RBS when their share price was around the 20p mark. Not very nice capital gains tax though

[Bellend Sebastian]

Not sure what the poster means by the government "releasing more shares" but in a general sense additional share issuance shouldn't affect the value of your investment as you will be given the option to buy these additional shares at a discount (thus offsetting the dilution effect of increasing the number of shares available). That's what happens in a rights issue anyway, not sure what the government are planning with Lloyds.

I presume - perhaps completely wrongly - that Lloyds was partly taken over by the tax payer, and that this capital is now being reintroduced to the market. That does sound like a rights issue when I put it like that, doesn't it?

I did an exam on crap like this last year. It's hard to believe that I passed it. At least I've retained it all, ho ho

[cambridgefox]

I'm really not an expert in holding individual shares (and my status as an expert in anything is questionable) but I don't think that this should have any noticeable effect on existing shares as they're just releasing more of the capital value of the company. Can anyone else shed any light on this?

Your story neatly sums up the pros and cons of holding individual shares - you can make big money quickly, but you can lose it quickly too.

It obviously makes sense to make use of a share save scheme as you're acquiring shares at a bargain price, but if you've been in it a long time and got a massive shareholding then I'd be a bit wary about having all your eggs in one basket. I'm not really sure how share save schemes work, but presumably you can dispose of part of your holding if you want to? Not that I'm telling you that you should, always seek the advice of a properly qualified and authorised individual.

The SAYE scheme works well if you are patient.They roll out tax free after 5 years(depending on how many you can sell in that tax year) The wife opts in £50 and the bank matches that(example to make the math easier) =£100 the shares are 50p each which gives her 200 shares.In 5 years these 200 shares mature.you can keep them in your portfolio or for example the shares are now £5(i wish) thats £1000 .for that month.The down side is the shares were £5 several years ago so her portfolio is only growing by 20 shares a month at present as she only got that for her £100.The bank only match upto a certain amount.ive probably confused everyone with the explanation,but after 5 years your portfolio grows each month and the bank have paid for some.i cant wait to get onto profit sharing schemes!

[DJ Barry Hammond]

Right then - I've decided I'm going to have a closer look at this shares thing, first off all by simply looking, and then possibly purchasing thereafter. I've set up a regular investor trading account through TD Waterhouse to practice with first and have earmarked a companies below that appear interesting.

Focus Solutions

Pace plc

Inmarsat

Centrica

Hargraves Lansdown

Any guidance or tips on what to look for would be appreciated, espcially in companies that aren't as well know.

I've looked at the sector these companies are in and what they do, then looked at their performance with the turnover and net profit appearing to be in good positions and with a low debt to asset ratio from what I can make out.

[Tommeh]

Really new to this share game but had a bit of spare cash knocking around my account so brought £1k of GKP the other day and £500 in Solo Oil.

Expecting to keep them for a good year or so to get the right price.

Doing quite well on the GKP's brought at £1.17, now sitting at £1.42. Been advised they shoul hit £2.50 by 2012.

Probably going to get another couple of hundred in the next week somewhere,

[cambridgefox]

Doing quite well on the GKP's brought at £1.17, now sitting at £1.42. Been advised they shoul hit £2.50 by 2012.

Probably going to get another couple of hundred in the next week somewhere,

Well done! £250 in a week.

[blue blood]

Right then - I've decided I'm going to have a closer look at this shares thing, first off all by simply looking, and then possibly purchasing thereafter. I've set up a regular investor trading account through TD Waterhouse to practice with first and have earmarked a companies below that appear interesting.

Focus Solutions

Pace plc

Inmarsat

Centrica

Hargraves Lansdown

Any guidance or tips on what to look for would be appreciated, espcially in companies that aren't as well know.

I've looked at the sector these companies are in and what they do, then looked at their performance with the turnover and net profit appearing to be in good positions and with a low debt to asset ratio from what I can make out.

dude have a read of the naked trader by robbie burns, will give you a good overview of what to look for (sounds like you are already on the right tracks)

Once you are happy with the companies you have to choose your entry and exit points, see what price you are willing to invest in and at what price you will sell on. Also think of a price you will sell on if the company does not perform as you plan.

[blue blood]

Doing quite well on the GKP's brought at £1.17, now sitting at £1.42. Been advised they shoul hit £2.50 by 2012.

Probably going to get another couple of hundred in the next week somewhere,

in my opinion GKP may become a proper company one day this company is still young and sitting on potentially very good assets.

Always do your own research.

[DJ Barry Hammond]

So it's been a while... How are we all doing (past couple of days aside)?

[Bellend Sebastian]

As per f-ing usual, the slump comes when I haven't got any money.

I'd be piling it in if I did

[SOCCERROO FOX]

Haven't brought any in a while but may give it a week or two and buy some more whilst the market is down. "Most" major banks within the countries that have a decent economy will be able to ride this slump out all right it think.

Or if the strong banks are out of your price range do your research before buying but the next few weeks will be the time you can make some cash if you're willing to sit on them for a bit

[Alexikokopops]

The closest I've come is through the share save scheme with work. I'll have just over £3600 to buy the shares at the end of it for the price set last year (about £5.70). They're currently worth £13.89, so fingers crossed things don't go tits up. To be fair though, if the share price does plummet I can just take the £3600 anyway.

Well they went up to about £20, but are now back down to £13.87, pretty much exactly the same as when I made this post. I need them to rise by November 2012, that's when I can exercise my option. I want to go travelling with this money!

[coale39]

What does everyone think about Lloyds?

[Wymsey]

Got some in Dunelm Mill. (Luckily my Father helped me)

Doing quite well and have great potential.

[cambridgefox]

What does everyone think about Lloyds?

You wont get any divs for another year at least,tough one they dont move much these days.so dont try and make a quick buck on them.