How do we go about doing it?
We have no idea whatsoever so advice please.
How do we go about doing it?
You need to open a share dealing account .
Fee's vary between providers (trading costs) so shop around.
I use halifax, Hargreaves landsdowne are also popular.
Remember to fill your ISA allowance first, if that's applicable
It's easy! I use XO who charge £5.95 per transaction (cheap). Or, if you use internet banking, it is often quite simple to set up a trading account.
With XO you just pay funds into the account (e.g. £2000) and set a buy order on your chosen company at market price, or if the price is currently too high you can choose to trigger the transaction at a specific price.
If you know nothing about share dealing, then it might be safer to invest in investment funds through people like Fidelity rather than individual shares. If buying individual shares I would not do this inside an ISA as the likelihood of you making enough to encounter tax implications are low unless you are dealing in large values. Capital gains tax is only on profit over something like £9k. If this is unlikely there is no point wasting your ISA allowance on it, better to use that on your 'safety' cash first and investment funds. In my un-educated opinion.
Having said which, I'd recommend using an ISA account because, as well as being free of Capital Gains Tax (as TGO mentions above), you also won't get taxed on the dividend income that you receive. Dividend income represents a significant proportion of any gains that you'll be making.
I"ve used http://www.iii.co.uk/ for my ISA account, has worked pretty well so far. Access to their analysis (P&L accounts, graphs etc), plus options for stop loss, conditional purchases etc.
However, it's VERY difficult to get ahead of the market (in my experience and opinion). Whilst hindsight is a marvellous thing (if only I"d invested all my portfolio in company X five years ago ...), in practice it's all about controlling your exposure to risk.
The safe way to start investing is to use a low cost FTSE tracker fund, again available inside an ISA wrapper (I've also used the one from Legal & General http://www.legalandgeneral.com/investments/products-and-funds/index-tracker/).
I'd also recommend reading Benjamin Graham's "The Intelligent Investor (http://en.wikipedia.org/wiki/The_Intelligent_Investor gives an overview).
However, this is just my opinion - it's your money, remember that as you decide on any purchase. Caveat Emptor!
Unit Trusts are the easiest way in to investing, I use both Hargreaves Lansdown and Close Brothers who both give the most useful information I've found.
@zippy - is this a one off thing, is it something you intend to do regularly, do you want to trade in and out frequently, something for the longer term. The answers to these questions will dictate the best approach.
In responce to a couple of points made above;
You don't have to try and beat the market, I invest generally to track the market
As for isa's etc depends on your answers to the questions above, you (and your partner/wife if applicable) get£10,000 a year of tax free capital gains so you have to make quite a lot of profit before you need shelter from that.
As for "don't" - the additional risk in shares isn't for everyone but they generally outperform bank deposits buy a lot and other investments such as insurance polices quite handily too. The risk is you can lose big too.
well, dividends in ISAs already have tax (10%) deducted). It's just that they don't have to be declared on your tax return and you're liable for any more tax if your income gets bait higher..
Is it for play or for your retirement? i.e. risk profile or whatever you'd call it..
Good posts above but I would just add:
The brokers charging below 10 gbp a trade, just check the stock prices as they aren't making any money on the trade fee.
There are c 10 stocks in the ftse 100 paying >5% yield on their dividend, if you are risk averse you could pick a bundle of say big pharma, oil, insurance & reinvest the dividend as it is paid.
Any of the above stocks listed in NY also pay quarterly so you get a nice paycheck every 3 months. Spreading your cash around can give you a monthly income.
I use sharetrade at 12.50 a go, plus the 0.5% stamp duty & turn the stocks over to bank profits. This is my first year & I am undecided whether I would be better just leaving the portfolio in place or banking the profits.
Good luck, spread the risk by diversification & keep some cash aside so you aren't forced into selling anything. Some of my biggest gains have started off as big losses, the market always overreacts, up ^ down.
There are people who have grown their share ISAs to over £1million! Not bad for £10k / annum invested since 1999!
Our situation is that the mortgage is paid off next month so we will have a few quid spare.
Our friend dabbles a bit and seems good at it.
He has gone with The Halifax to trade, only because its the first one he found.
On signing up they seem to want a Halifax account and there's not one near us.
So thought I would explore the options.
We are not expecting to make millions just more than we currently make on the lottery. (Nothing ever!)
So just a bit of fun really.
1)Avoid using Nat West Stockbrokers.
2)Download the Naked trader on Amazon.
3)FTSE Trackers are an easy option to start with.
4)The markets are manic depressive.
5)I think this is a very good time to be involved with the stock market.
6)I would think about investing in.
Lowland Investment Trust
Ruffer Investment Trust
BT and Vodafone.
I have used iii in the past (as have a few others above.
I read The Naked Trader, which is a light hearted guide to trading that i found quite helpful.
You can always pretend to trade once you have an account set-up. You can look for shares, 'buy' them , add them to your profile and track them to see if you have a clue what you are doing or not. Might be worth doing for a few months to see how you get on.
Take everything said on the forums/bulletin boards with a massive pinch of salt (same as on here, really). There are people crying out with the next best thing or advising that you dump X shares as they are about to completely dive. Most of what is written/advised is absolute nonsense.
FWIW, I was placing very small trades and didn't really know what I was doing. On the whole I ended up +ve, but decided to stop doing it as I didn't really have the time to invest in it or the money to trade in more than small amounts. It was quite good fun though and at the time the money was surplus to requirements so I could have lost it all and not been overly worried about it (although it obviously would have been annoying).
Short term trading is very hard to do, particularly in the current environment, so go into it planning to lose all your money. If you're doing it in small size and not using leverage you will probably have to stick to higher beta sectors; mining, industrials, financials etc. I would suggest finding a couple of companies that you understand and trade them. You'll eventually get a feel for how they react to different bits of economic data etc.
Valuations are generally quite stretched at the moment (unless you believe the world is in a great place) and as a complete novice i would suggest if you're trying to trade you do so on a demo platform.
Beware of the costs associated with foreign stocks, usually hidden in the forex. Also if buying longer term with dividend income there is frequently a witholding tax which can be around 30% ie your net is 70% of gross div.
If you're thinking of investing your free capital for the longer term, building it up gradually over time without constant input/monitoring from you, then some of the larger investment trusts are worth looking at. Funds like City of London, Ruffer and perhaps RIT Capital. Some direct emerging market exposure with one of the established managers and perhaps some added fun with something like the Throgmorton Trust. Trackers can be good but again, check the charges. Ishares are typically quite expensive, DB-X trackers not so. Also FTSE100 typically gets dragged into the whimsical latest thing with subsequent boom and busts so perhaps look at FTSE250 if you want a long term generic tracker.
If you're looking to save for the longer term then it is worth speaking to a stockbroking firm. Whilst their charges for advice may seem more upfront the execution will often be better and if buying funds they often swerve a lot of the charges.
Here is another idea - depending upon the amounts you can set up a self invested personal pension and do the stock trading inside that. The benefit is that you get tax relief on the way in at your highest tax rate. The downside is you need a reasonable amount to get this started and the money is "trapped" inside the pension.
Certainly just buying shares is more flexible and you can decide what to do with the profits and unto £20k is tax free per anum (assuming you are a couple).
I've been known to dable from time to time, probably as many losers as winners, what I think is a good idea is to have access to the "market" - you can do this by buying funds (or ETFs - look them up) which track the FTSE (you do pay an annual charge "hidden inside the fund" but generally they track reasonably well, to beat the market you have to have a skill)
I've been using Alliance Trust Savings which gives you and Investment Dealing Account (also ISA and SIPP if you want). You can buy their own Investment Trust, at decent rate, or can buy most other funds, equities, gilts and so on.
I've also got a small investment plan with Personal Assets Trust - another investment trust - which is almost worth it just for the read of the quarterly newsletter - they are cautious (almost obsessively so) but have a good deal of experience, and their analysis is well argued and entertaining - also brutally honest if they get it wrong (see also Ruffer I think).
makes intersting reading this thread, ive been toying with having a dabble myself, but like zippy im totally clueless.
i just want to have a bit of play really, a few hundred quid maybe - im not looking to make a sound financial investment or owt.
Buying and selling costs will be high for a low amount like that - with equities anyway.
Jaffe,stick your money on one bet,maybe Vodafone.
@jaffefoffer yes that amount is too small really to spread around. Pity you didn't post earlier as that amount in the Post Office float would have been good. It was a gift from the Government of our money to the market.
If it's really a punt and yo can afford to loose it (or see a loss of 50%) buy a tech stock - Apple, Google, Facebook, Twitter - something like that - hold it for 6 months or a year and then re-assess. FB bombed at issue but would have been a decent buy after a few months - 20/20 hindsight of course !
Quite interested in this too - great advice guys - thanks
Dont think you,ll get many apple stocks for a couple of hundred pounds.Not sure I,d want to invest in them anyway.Think they maybe on the slide.
A £750 bet on the Royal Mail has proved a very decent bet indeed.Could skyrocket in the next few years as well.Baring disaster.
And that is why I have just sold my Royal Mail shares.....bird in the hand and all that...Gamble what you can afford to lose, spead your risks and buy what interests you seem to be wise words.
Think you might regret selling up wally.
Charles Stanley Direct works well. like Hargreaves Lansdowne but 'clean' funds so should have lower annual costs.
If you want to top up pension then open a SIPP with one of the above but if you want to spend it before you are retirement age (Im not sure what age applies here) then just fill your ISA allowance first but CS and HL allow you to choose what funds or shares go in the ISA.
Another good option is Fundsmith - a long story but basically brilliant. you can only buy direct not via any third party at all but dont let that put you off. Terry Smith has an awesome track record.
RM through (my insiders) fair value price today. Bit more froth then take some profits IMO.
You must log in to post.