[Closed] Stocks, shares and investment. Where to start?

Wouldn't call it gambling as if the share doesn't go the way you plan, then you can sell & won't lose all your 'stake' although you will be down a bit.

Good book to buy is The Naked Trader by Robbie Burns. I bought this and that for a while and made some money, but also had occasions where I lost a bit or just broke even.

Interactive Investor (iii) is a good site to use if you are going to be trading online. You can set an account up & then run a 'dummy portfolio' using the 'portfolio' link to see how your choices do. You can stick in the amount you would have invested and at what price for a particular share and track your good luck/misfortune.

You really need to be investing a minimum of £500 on one trade as the commission costs mean that it's rarely worthwhile otherwise.

Don't be drawn in/tricked by promises of penny shares that are just about to explode and will be worth £'s in the next few months.....

Yeah I was pointed at iii by my mates. The dummy portfolio sounds good, I will give it a go. My mate is in BEM (Beowulf mining) from 5p and is making a mint!

Invest in what you know as long as their business plan is showing sensible opportunityt for growth. ie who you shop with, bank with, buy energy from etc. If you don't know anything about chinese mining then don't invest!

I've invested heavily last year and after the .com bubble, so both times shares were at rock bottom, so you might have missed the boat on big gains 😉

when you say your mates are making money, do you mean "on paper" or in cash? You only "win" when you sell shares that went up. You can't pay your bills with theoretical gains.

In theory, I lost a few thousand pounds yesterday after a certain company got a bit of bad news, although I expect it to climb again.

Hmm, I don't think they've taken anything out yet, so I suppose they've not really made money. Is it called top-skimming when you take some out?

Yeah - cheap shares can be a go-er, but you just need to be wary.

Every now & again I'd get e-mail offers asking whether I wanted to take advantage of a special chance to buy shares in 'crackpot technologies' before everyone else.
Generally if you then tracked that share it would start trading, perhaps rise briefly before plummeting without a trace.

I stopped doing it, as I didn't really have the time to research what I was investing in.

What online account would anyone recommend for trading shares??

Interactive Investor (iii) is pretty good. Used it for a while without bother.

Golden rule.

[b]Never invest more than you can afford to lose[/b]

Every now & again I'd get e-mail offers asking whether I wanted to take advantage of a special chance to buy shares in 'crackpot technologies' before everyone else.
Generally if you then tracked that share it would start trading, perhaps rise briefly before plummeting without a trace.

Pump & dump. Classic scammer activity.

@ the OP - sounds like your friends are investing in AIM-listed stocks, and most likely natural resources-focused ones. There's been a plethora of them doing quite well recently - Rockhopper, Xcite Energy, Desire (although it's been up and down heavily), Victoria Oil & Gas and Beowulf to name a few. And on that evidence it's easy to be drawn in to what seems like "easy" money, but these are incredibly volatile stocks and you need to be prepared to lose all your money if the speculation ramping up the prices doesn't come true when the company issues an official statement. [i]"Shares can fall as well as rise and you may get less back than you invested"[/i] is is every uk stockbroker's T&Cs somewhere.

If your risk appetite is such that you're happy at the possibility of losing everything invested for the propect of triple digit percentage gains, then go for it. The message boards of www.lse.co.uk can be a source of inspiration aswell as those on iii, although you have to work out which posters are ramping up the share price for their gain (see pump & dump above) and which are giving real insight.

Personally, the majority of my portfolio is made up of "safer" mutual funds, with the odd speculative £1k in dodgy AIM stocks when I see an opportunity.

Yeah they are all in natural resources, Beowulf being most successful at the moment. I am tempted towards to fast profit stocks rather than long term investment - not looking to put in much, £1k max at the moment. However not knowing anything about mining, it's very hard to know what's good and what's not.

Be wary of people who tell about how they make money on the stock market - they're a bit like gamblers only telling you about their winners.

And on that evidence it's easy to be drawn in to what seems like "easy" money, but these are incredibly volatile stocks and you need to be prepared to lose all your money if the speculation ramping up the prices doesn't come true when the company issues an official statement. "Shares can fall as well as rise and you may get less back than you invested" is is every uk stockbroker's T&Cs somewhere.

In these situations, I think it's important to have a plan as to what you are aiming to achieve with the investment. This is quite well explained in The Naked Trader.
You basically decide 'I want to make 50% profit on this investment and I can afford to lose 15% on this investment'. As soon as the share has made you 50% profit, you sell it and move on. If it starts dropping, then you don't sit and watch your money disappear to zero, but hang on until your 15% threshold and then ditch the share. Yeah, you've lost money but you have't lost ALL your money.Likewise if the share continues to rise after you've made your 50% profit, don't bang your head on the wall wondering what might have been, just move on to the next thing.

These are the things I found most difficult to do, which is one of the reasons I don't really bother with it anymore.

i've made quite a bit with apple - or i will when i sell! they've been steadily growing for a long time. iPad2, iPhone5, all new macbook pros should keep things cooking this year. should become the worlds biggest company this year (market cap) going past exxon-mobil... crazy!

Bullbearings is good if you want to have a mess about.

Things to bear in mind:

A Trade will cost you about £13
Shares have a buy and a sell price just like currency.
You'll have to pay stamp duty on trades greater than £1000
You'll have to pay capital gains tax if you make more than £10k profit(that includes other things too like selling a house)

Just like gambling where everyone you speak to is up the same seems to go for people who dabble in shares.

You basically decide 'I want to make 50% profit on this investment and I can afford to lose 15% on this investment'.

A lot of online brokers offer a stop-loss service for just this purpose. Set your upper & lower limits & the position will close out automatically for you. I use it for spread betting, but not standard equities.

I can recommend x-o as a cheap, no-frills online broker. They charge a flat fee of £6 per trade.

For a bit of 'fun' with your £1000 you could look at say 2 or 3 AIM stocks. A 'safer' investment would be a fund.

Subscribe to money week - good straightforward magazine to get you into the markets..

Just looked up that beowolf, it is a very speculative stock. I would be getting out now if I was your mate, he must have made a fair profit over the last month or so.

Barclays stockbrokers are pretty good, you get a reasonable dealing limit and there are quite a few options to limit your losses. Dealing charges are £12 if you dont deal regularly.

You'll have to pay stamp duty on trades greater than £1000

'fraid that's not the case for most stocks - if a stock is liable to stamp you have to pay it, regardless of the value of the trade.

The only time you'll avoid stamp on trades <£1k is if they're settled on a residual basis rather than via CREST. And most UK stocks go through CREST.

What are peoples AIM tips for 2011 then?

I do not think it's appropriate to share tips here and you'd be a fool to act on it in any case.

I'm not able to deal in shares due to my profession but I know the basics from before.

The Reuters website divides the stock market into different industries and then ranks companies according to various criteria, including, usefully, analyst recommendations, dividends (I'm surprised no one has mentioned yet the need to choose between income and capital growth...), etc. The analyst recommendations are quite helpful - something with a score under 2.0 with at least 15 analysts is likely to be a safe bet, although it won't make you millions (those are the ones that haven't been tipped yet).

Look at the P/E ratio which basically tells you how good value the company is. Look your company up on Google Finance - this usefully gives you a table comparing the P/E ratio to other companies in the same industry. A lower number means the company is better value, generally.

Look at the dividend yield. Anything above 2 is good.

Google Finance also gives you thinks like the company's debt and its return on equity. If a company has less debt than its competitors and yet is still more profitable, it's good - especially if it's P/E ratio is also lower.

If all these things are satisfied, finally look at the share's 52 week high. If the current price is near that, it's risky.

Also the FT has a useful function - look up the company and then look at "Analysis" - there's a graph/table showing the maximum price analysts expect the stock to hit in 52wks, the median, and the minimum price they expect.

Do not buy a stock just because some nimrod on this site tipped it.

3 things borne out by study after study:-
- you only get massive returns if you reinvest your dividends;
- frequent traders lose money; and
- index-linked funds make most people more money most of the time than managed funds.

Oh and ETFs are widely misunderstood and often risky (lots of people are pushing these hard right now).

Hi

I have been trading for about 2 years now and have made a nice return.

As mentioned above, The Naked Trader (2nd Edition) is a good book to start off with.

Register with shareprice and set up a virtual portfolio to start with. As far as I know, this is the only website that shows live prices for FREE.

Only invest with funds you are willing to lose.

My rules are to try and make 100% then sell half and free ride with the rest. Have managed this with most of my investments so far.

Don't let greed fool you into thinking that the share is going to continue to rise. Have a plan and stick to it.

Never buy on a rising share thats already close to it's 52 week high.

I will give you some tips but please do your own reading before investing.

BOR (Borders and Southern) great BOD, rig now signed SP will move on speculation well before they start drilling. I believe the SP will be double what it is now in less than 12 months time.

ARG (Argos Resources) - again have licenses to drill in the Falklands and in close proximity to RKH's successfull Sealion drill. SP will rise with any good news from RKH who now have the drill. 100% return can easily be achieved with this one.

BMR - Just awaiting on an RNS for this one. Some people say it's a safe bet, but anything to do with Africa is going to be corrupt and will take longer than normal to push things through.

Hope that helps a little.

Register with shareprice and set up a virtual portfolio to start with. As far as I know, this is the only website that shows live prices for FREE.

Google Finance - Portfolios?

I'm surprised everyone here is talking in terms of returns of 100% - that's extraordinary. I regarded a 30% return as hitting it out of the ballpark, and a 10% return as adequate. It depends what timeframe you're talking about, of course.

I've traded in real time, been sat in front of level 1 data, on the white knuckle ride, blah, blah.

One piece of advise I would give.

Always, always, like 100% always, set a stop and stick to it.
Some trading sites/services now offer [i]intelligent[/i] stops that track a price so long as it moves in the direction you want.

BUT !. always set a stop in place.

You've been told. Never forget it.

good luck.

I wouldn't say that a 100% return in the AIM market is that extraordinary to be honest.
It's that volatile in some stocks it's not unusual to see a 30% shift some days.

Obviously though it's all about getting into a stock early. I have been lucky, it also helps knowing someone on the rig.

I thought Google Finance was 15 minutes behind with their share prices?

"BUT !. always set a stop in place."

I wouldn't do this on an AIM stock. There too up and down.

The market makers know what investors stops are set at and have been known to tree shake the stock which triggers the automatic sells.
They in return get cheap shares.

RKH for instance went from 250p a share to 50p then back to 200p a share in the space of an hour earlier last year.

Oh, I didn't know that! Stands to reason

Good call on the use of stops, crucial to protect your gains, don't set them too high though. The chart on the FT's "Analysis" page for each stock is a useful guide to what you should expect of the stock (rely on the median figure; ignore the most optimistic estimate)

RKH sounds buttock-clenching. NYSE/NASDAQ please...

Thanks for the finance chat guys. I'm learning, slowly. Decided to play with 'pretend money' for a few weeks to get the hang of it.

Im just cheating by copying what the naked trader buys/shorts while I learn the ropes properly for myself. I'll have to because he is going to stop webste trades once he gets to £1 million profit.

Working wel so far.

DO NOT play the indices! It's a mugs game, at least thats what I've heard 😳

You don't have to do very well at all to outperform an ISA.

If you can't afford to put £1,000+ a year down on buying shares, buy into one or two investment trusts/funds. It's far cheaper if you can only put away £100-200 pm, plus you're benefiting from buying into expertly managed funds (on the whole!). It's a good starting point until you're minted enough to vary your portfolio with buying stocks and shares. You can still satisfy your risk appetite with the 1,000s of different funds on offer. An investment portfolio isn't just about share buying. Think also about commodities, precious metals, currency exchange, bonds/debt, property, antiques, collectables etc.