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Right, I know nothing about shares apart from the basics of them, i.e. what they are! Would like to start getting into them but don't know where to start. When I try to find out info I see acronyms a… Read More
grdesign Avatar
1d, 7m agoPosted 1 decade, 7 months ago
Right, I know nothing about shares apart from the basics of them, i.e. what they are!

Would like to start getting into them but don't know where to start. When I try to find out info I see acronyms and charges thrown at me and I'm unsure what I'm looking at.

Anyone here have shares and know what they are doing? Would the FTSE100 or 1000 be a good start in throwing a grand at? If not, why are they always mentioned?
Could they, if things go well, make more than the same 1k would in a savings account pay 5% gross? (so 50 quid a year gross basically).

After the grand, I would hopefully know more and can start picking out other products, but until then, need to stick me toes in the water.

Any help greatly appriciated!! For the thick amongst us when it comes to shares!
Obviously not interested at all if someone said either FTSE would never make me more than 5% a year!
grdesign Avatar
1d, 7m agoPosted 1 decade, 7 months ago
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1 Like #1
My main advice to you is

If it sounds too good to be true - it is normally a boiler room scam. Read here for more details

http://www.fsa.gov.uk/pages/Library/Communication/PR/2006/053.shtml


Always seek the help of a professional advisor if possible.

Always be prepared to lose the amount you have invested - companies can and still do go bust. Even one of the FTSE 100 companies went bust (read here for more details)

http://en.wikipedia.org/wiki/Polly_Peck


If you want to do it yourself why not start reading the financial section in your daily paper? I would recommend the following which have tips sections - Daily Mail, Times, Telegraph.

The Investors Chronicle or Shares magazines are a good starting point for further reading and provides comments, news and tips.

Another good starting point would be here

http://www.thelondonstockexchange.com/en-gb/pricesnews/education/firsttimeinvestors/

Always always always deal with an authorised firm which you can check here

http://www.fsa.gov.uk/register/home.do;jsessionid=cd2befa9053d411cbdd0d8538b28752f.s6fNml1Ka34InBbv-ArJrwTPoNCNa30Qcybtah0IaNuIahiIb3yIaNfwmxiInxiOahmLc3aTc2SHc30Ka2aToi5hch0Na2TSn7bvq70KagTAqQ4InQXQ-BjF8NiKa34Qb2bMnkrDqRfzqwbMnkrDqRfzqwbynknvrkLOlQzNp65In0__

In answer to your questions buying a product linked to the FTSE might be a good starting point as it will spread your risk over the 100 constituents that form the FTSE 100.

Will it go up by more than 5% per annum? Who knows? Only by looking back will we know this - like most products in the investment world they are not guaranteed. Remember as well that to deal in shares you normally have to pay commission to a stockbroker so you would need to increase by more than 5% to cover your costs. So you need to find someone who is not going to charge you a lot if you're investing £1000.

Why not have a practice run before buying shares? You could always follow a tip(s) and invest your £1000 hypothetically and track its progress (remember to include dealing costs(buying and selling) and stamp duty which is levied on most share purchases - yep just like buying a house but a flat 0.5% of your investment.

Did you know that you can lose money in a bank or building society as well if goes bust?

This is what you are covered for in the event of most UK banks/building societies

The maximum levels of compensation are:

Deposits: £31,700 per person.

100% of the first £2,000 and 90% of the next £33,000.

Shares should be viewed as long term investments and you may not get back the amount you invested. Past performance is not necessarily a guide to future.

Hope this helps:thumbsup:
#2
Thanks mate. Knew about the savings and FSA thing which is why I have three savings accounts (not neccesarily maxed out!!).

Thanks for the info on the shares too, and the links, will have a proper look tommorow when i haven't consumed alcohol. I know £1000 is quite low, but it's just a starting point.

I feel as I'm im missing out on something with shares as I never done them, it's just a bit overwhleming with all the charges on trades etc.
#3
I appreciate it can be overwhelming.

Been in the game since 1984 so I have experienced the ups and downs.

I can honestly say that I learn something new nearly every day:roll:

Tread carefully and I'm sure you'll be okay.

Sorry I cant give out any specific advice as I'm not allowed to:thumbsup:
#4
Can you tell me whether it has been more profitable than a savings account for you?
banned#5
where can you get shares?? i was jsut think of investing £50 somewhere for a laugh. is there anywhere i can get some really easily??
#6
grdesign
Can you tell me whether it has been more profitable than a savings account for you?

In a word yes.

But, that is overall. I have lost money on some shares but, the gains made in others have more than made up for these.
banned#7
pluves1
In a word yes.

But, that is overall. I have lost money on some shares but, the gains made in others have more than made up for these.


where did you get yours??
#8
jase159
where can you get shares?? i was jsut think of investing £50 somewhere for a laugh. is there anywhere i can get some really easily??

A Stockbroker or bank will be able to help.

Dealing charges will be a substantial proportion of a £50 investment which is why many folk don't invest £50.

If you want to invest 'for a laugh' you might have more fun at the casino or a betting shop:thumbsup:
#9
jase159
where did you get yours??

From a stockbroker
banned#10
pluves1
From a stockbroker


cant you just go onto a site on the net and buy them?? like you would with an item from a shop??
#11
jase159
cant you just go onto a site on the net and buy them?? like you would with an item from a shop??

Some Stockbrokers and banks have internet dealing facilities.

Think of it like depositing money with a bank or building society - you have to undergo certain verification of identity and address checks before you can invest. This is to prevent Money Laundering.

I would suggest that if you're serious you start with this link

http://www.thelondonstockexchange.com/en-gb/pricesnews/education/firsttimeinvestors/

You really need to understand the mechanics before investing as it can be a risky game.
#12
grdesign
Anyone here have shares and know what they are doing? Would the FTSE100 or 1000 be a good start in throwing a grand at? If not, why are they always mentioned?
Obviously not interested at all if someone said either FTSE would never make me more than 5% a year!


The FTSE100 and 1000 aren't companies you can buy shares in. It's simply an index of the top 100/1000 companies on the stock exchange's share prices added up, making it easy to see whether the stock market is generally going upwards or downwards.

:)
#13
Jase, it's not quite as easy as throwing £50 in! £1000 is a tiny amount in the whole schemes of things! I know that much!

Pluves, you have any experience or comments on the halifax sharebuilder? Looks quite good for what I want.

Someone has also mentioned unit trusts to me. I'm going to have to do some serious thinking.
#14
duckmagicuk2
The FTSE100 and 1000 aren't companies you can buy shares in. It's simply an index of the top 100/1000 companies on the stock exchange's share prices added up, making it easy to see whether the stock market is generally going upwards or downwards.

:)


Ahhh, I thought you could put some money into the FTSE100 & 1000? Say £1000 would be split into £1 shares in each of the 1000 companies that build up the FTSE1000?

Therefore, it's normally lower risk as you have 1000 companies, some going up some going down (on average).

I'd probably go with the 100.

Argh, why is it all so confusing!!
banned#15
i have a halifax bank accouint online. can i do it??
#16
Jase, are you having a laugh or something?
#17
Talking about Halifax - I am using iWeb as my online broker. They are quite cheap but then I am not actively trading shares.
#18
The first and most basic question. The FTSE100 has a market price right now of 6,190. Does this mean that to buy into this I need to invest £6,190 into the FTSE100?

Then say it goes up 6.30 like it did yesterday, I make £6.30 that day? (bearing in
mind it cost me the trade fee and stamp duty, so this £6.30 would barely be covered).

If it goes down 14.30 the next day I lose £14.30 that day?

But, if I had bought in in July at 5,600, I could sell my shares for a total of £6,190 today, meaning a profit since july of £590?

I'm so confused. Maybe it's best to stick to my savings accounts!

I really am a virgin when it comes to this!
#19
The first and most basic question. The FTSE100 has a market price right now of 6,190. Does this mean that to buy into this I need to invest £6,190 into the FTSE100?

No mate - you invest in the company, and not the FTSE index. Have a look at http://streetauthority.com/terms/index/ftse.asp.

Shares all have different values depending on the company they are linked to. The value of the companies shares go up and down depending on how well the company is performing. For example if a company brings out a new product that is likely to do well, then the share price will go up. On the other hand, if the company announces losses in it's profits or does not reach it's targets, then the share price will go down.

The way you try to make money is buy buying the shares before they increase in value and then selling them when they are worth more. It works the other way too, so you can buy shares and then the value can go down and you would lose money.

The FTSE index is a representation of how shares have increased across a number of companies (the % change is totalled and divided by the number of companies). Even if the FTSE index has gone up, the shares you have bought could decrease in value.

What I have written is only the real basics but I hope it helps.
#20
If owning things gives you a buzz.
If you think a hedge is at the bottom of your garden.
If you think badgers live in SETS.
If you think people are basically honest.
....Never ever deal in shares.

Sharedealing (successfully) is for ruthless, singleminded, calculating, detached people who already have a stash and will have planned how to survive if part of it gets unavoidably lost.

I was involved in the tech shares boom of the nineties where a complete idiot could could find an online shares forum, get tips & make a grand a week easily.
Problem comes when people like me identify with the shares you own and become proud of them, when someone tells you they are really specualtive junk it feels like your baby has been slapped and you become protective of them.
That sort of attitude cost me £30,000.
Buy premium bonds - you can't lose.

Or like my Mother buy shares in a bank, she had £400 in Natwest which during her long lifetime turned into £30,000 plus (dividend re-investment).

Oh and...share dealing gets taxed too.
#21
duckmagicuk2
The FTSE100 and 1000 aren't companies you can buy shares in. It's simply an index of the top 100/1000 companies on the stock exchange's share prices added up, making it easy to see whether the stock market is generally going upwards or downwards.

:)


I thought you could invest in FTSE tracker funds?
I've seen equity funds that earn 50% a year but have a 5-10year term before fruitition iirc but obviously higher risk i think.

I would mention more but I wouldn't want to get into trouble as I'm merely a beginner.
#22
ChrisO is right. Shares are gambling. It's never going to be a safe investment...
#23
grdesign
The first and most basic question. The FTSE100 has a market price right now of 6,190. Does this mean that to buy into this I need to invest £6,190 into the FTSE100?

Then say it goes up 6.30 like it did yesterday, I make £6.30 that day? (bearing in
mind it cost me the trade fee and stamp duty, so this £6.30 would barely be covered).

If it goes down 14.30 the next day I lose £14.30 that day?

But, if I had bought in in July at 5,600, I could sell my shares for a total of £6,190 today, meaning a profit since july of £590?

I'm so confused. Maybe it's best to stick to my savings accounts!

I really am a virgin when it comes to this!

My advice to read all in the first link is still the most appropriate. In particular The London Stock Exchange website.
Read it all first and then come back if you have any further queries. All your answers are there - trust me;-)
#24
duckmagicuk2
ChrisO is right. Shares are gambling. It's never going to be a safe investment...

True

I would attach a graph of the FTSE 100 to this emai but I'm not allowed. Can a moderator help out if I PM the attachment to them?
#25
grdesign
The first and most basic question. The FTSE100 has a market price right now of 6,190. Does this mean that to buy into this I need to invest £6,190 into the FTSE100?



Although you can't buy shares in the FTSE100 there are 2 possible ways of investing in the FTSE100 (which is an index not a company or an individual share). If you have oodles of cash - in excess of £100m then you could probably do it by buying the individual companies which make up the index and doing so in the correct weightings. You'd need to buy say £5m worth of BP shares, £4m worth of vodafone etc etc for the top 100 companies. This is only really done by large companies however like prudential, standard life, newton financial management etc.

The alternative and cheaper way to buy shares in the FTSE100 is through a unit trust (or this can also be done through an ISA I think which is more beneficial if you are a 40% tax payer). Here lots and lots of people want to invest money in the FTSE100 and give their money to the trust which gathers the money and then invests the money as mentioned above in individual shares. In general for a unit trust like this you might pay a charge of between 1% and 2% per annum to cover the overall trading costs.

In general the FTSE100 is really tracking the value of the top 100 companies - not the general movement in share price of all the companies - as BP, Shell, vodafone are very large companies they have a much bigger influence on the FTSE100 index than smaller companies such as Whitbread etc. The overall vale of the top 100 companies is approx £1,300 Bn!!!!!!
#26
You can buy shares linked to the FTSE 100. For more detail see here

http://www.thelondonstockexchange.com/en-gb/pricesnews/prices/system/detailedprices.htm?sym=IE00B14X4Q57IEGBPETFSB14X4Q5IBGS

More info on this product can be found here

http://www.ishares.co.uk/submit_welcome.do

One of the most common misconceptions about the FTSE 100 is that it tracks the value of the top 100 companies - not strictly true. The index is only reviewed on a quarterly basis. What this means is that say company xyz plc fell dramatically in value and was then ranked say 106th compared to 98th then you havent really got exposure to the top 100 UK quoted companies have you? This is why unit trust tracker funds cannot track indicies point for point. Even the ishare fund cant do it but I reckon its tracking error rate is less than that of a unit trust:thinking:
#27
Thanks for all the info guys. I'm thinking its probably best I stick with my savings account for now.

I have a practice portfolio set up which tracks my shares. I have put £1000 in and have put trade prices and stamp duty into the mix. I have bought into 2 companies and will see how I do on this practice run. It's basically pretend money, but will give me an opportunity to see how I would have done with real money and to get the hang of things!

It's all a bit overwhleming, and funnily enough, no one has said to me it's well worth doing!
#28
grdesign
Thanks for all the info guys. I'm thinking its probably best I stick with my savings account for now.

I have a practice portfolio set up which tracks my shares. I have put £1000 in and have put trade prices and stamp duty into the mix. I have bought into 2 companies and will see how I do on this practice run. It's basically pretend money, but will give me an opportunity to see how I would have done with real money and to get the hang of things!

It's all a bit overwhleming, and funnily enough, no one has said to me it's well worth doing!

Don't let the complicated nature put you off.

Glad you are doing a practice run first.

Out of interest which two companies have you bought? PM if you dont want the rest of the world to know!

Did you know that the top ten UK companies account for 48.19% of the FTSE 100 index (data as at 29 November 2006) by market capitalisation?
#29
PELE and ICI just down to sheer reading and a few people stating that they reccomended them.
#30
My advice grdesign is to get a shares ISA through an online money supermarket like http://www.chelseafs.co.uk

For your first investment I'd go for a unit trust like Jupiter Income that has a very good track record and has served me well.

When I first entered the stock market I was far too hasty and was looking for a quick buck....needless to say I got my fingers burned a few times and have now settled into a far more medium /low risk investment policy spread over about 8 unit trusts and 10 company share investments.

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