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Discussion Starter · #1 ·
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!
 

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Very high area of risk to play with my friend. Would never recommend someone to invest directly in shares unless they knew what they were doing and are prepared to accept that all monies could be lost.

Have you thought of other areas that are safer but equally - yield returns based on the markets. Investments are a mind field areas im just beginning to expand my knowledge on and its my job.
 

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Discussion Starter · #3 ·
Very high area of risk to play with my friend. Would never recommend someone to invest directly in shares unless they knew what they were doing and are prepared to accept that all monies could be lost.

Have you thought of other areas that are safer but equally - yield returns based on the markets. Investments are a mind field areas im just beginning to expand my knowledge on and its my job.
When you say other areas, you talking bonds and stuff? Looked at these and you need to lock your money for a couple of years to gain an extra 0.4% on top of what you could get in instant access savings, so kind of wrote that one off!
 

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Was thinking along lines of unit trusts, ones i deal with over last 3yrs have returned around 12-13% but obviously past performance is no guarentee of future performance. High risk areas like the the us jap markets, where prices have great fluctuation daily, but again these are medium to long term investments like 5yr+. You can get at monies anytime but have encashment charges to pay.

Some of the charges will more than likely be management charges for looking after the funds...etc... unless you buy and sell directly yourself...

You fancying yourself as abit of a stock broker?......
 

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Interesting this one... I've been talking recently with a fellow family member who invests in stocks and shares and has done for the past couple of years...

It is a risky business, which at first he did quite well but then lost alot of profit that nearly put him back to square one....

IMO what ever you invest, you have to write this money off as a dead asset! If it performs well then great, but if you lose it all, then just bite the bullet.... and try something else.

He studied the market for over one year before he invested... so I don't think it matters how well you get to know the market, it still can go pair shaped.
 

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Discussion Starter · #7 ·
Thanks.

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!
 

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Right graham, basically each company in the FTSE100 has a share price, and it goes up and down daily, at a set point each day is the buying and selling time, and you buy or sell at that particular time. So if Shell are worth ?1.27 a share 3 days later you sell at ?1.79, the growth is profit, minus any fees etc...
 

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Thanks.

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!
Graham,

What you're on about is how they measure how a particular market is performing generally. Consider it a high level overview.

Thought about a stocks and shares isa instead of a normal savings account? There are a good few providers outside the high street players like AIB, High Fidelity, etc

Have a look at http://www.moneysavingexpert.com/savings - perhaps ask on their forums and link back to this thread? I'm sure others would be interested.
 

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AFAIK, no. The number they give it is just a measure f the index's performance currently. The FTSE 100 is the 100 biggest publicly traded companes in the uk. the figure you quoted is just a measure of how well it is performing. I think. if anyone knows i'm talking crap, please correct me. check out fool.co.uk or money saving expert as someone else said for more info.

Have a look here mate.. : http://www.fool.co.uk/school/2005/sch050822.htm?source=EDSP
 

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As above, the FTSE100 is an index; you've got the wrong end of the stick Graham mate.
Its basically an imaginery stock portfolio of the most important companies. Its used to give you an idea of how the whole market is performing - to 'invest' in the FTSE100 you would need shares in 100 companies with the appropriate proportions. However the FTSE100 was decided in 1984, so the companies its made up of are not as reflective of the whole market these days. Put simply the economy used to be about resources? -? oil, power, pharma, and bluechips. Now its also about software, consulting, knowledge, internet. As such , the FTSE 100 is a bit out of date and ignores many major tech/software/internet business. There are newer indexes like the FTSE Fledgling and FTSE250 (updated quarterly) that try to make up for that.
Stocks and shares are risky but I know a few people who play it and do very well. Its much easier? as a begginer to make cash from property though IMO, don't put big money into stocks unless you know what you are doing or are particuarly good at insider trading and finding out about MBOs or hostile take overs before the targets do. Which is of course illegal, but still....
 

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Discussion Starter · #12 ·
Was thinking about a BTL property. However, as soon as I started to research I found never ending posts of crashes etc, and withthe interest rate going up, I kinda got all uptight and decided it's no good for me at the moment. MAYBE when/if it does crash, getting in there when you THINK it's at a low may be a wise move and something I may do, but thats a gamble too, trying to decifer when it's hit the bottom.

Everythings a gamble to be honest, unless you take the very very low risk, but possibly worst investment, savings accounts.
 

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I know what you mean. [:)]?We have all discussed this here many, many times, everyone has an opinion...but?
http://www.housepricecrash.co.uk/ is my favourite site. Doomsayers and nay sayers, and yet every single time you log on, all the live index arrows point up. LOL. At the bottom of the predictions is a guy named David Pannell, who predicts a 45% drop in the next two years. That was in Feb 2004. OOPS, times up mate, not to mention he saves his 'direst predictions for Liverpool', which arguable is one of the biggst ares for MAJOR redevelopment and restructuring in the whole UK at the moment and where prices are on the rise....Don't believe everything you read is all I can say.?
IMO Rates are low (4.5, 5, 6... its all low. 8,9,10%..thats when you worry if you ask me), mortgages can be fixed, everyone needs somwhere to live. The guy who decided to wait in Summer 03 is still waiting 3.5 years later, but that flat he wants has gone up at least 25%. Food for thought anyway
 

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Discussion Starter · #14 ·
The best thing for me personally at the moment would be for interest rates to hit say 7% gradually over the next couple of years.

That should have a negative effect on house prices, which for me, will have given me a better return on savings and then can look at buying. But like you say, I could still be waiting in 10 years when my money is worth 6 x less than what it is now!

The above is pure selfishness though as 7% and a crash would ruin peoples lives.

I have got into following it all though, it's all a massive learning curve for me. Your not worrying about your rental then and getting jittery about it falling in price?
 

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Hi mate, Since the FTSE100 is quite high at the moment, I wouldn't invest in that. I bought a tracker fund in OCT 2002 when the FTSE was jus under 4000. Since then ive been chucking in money into the fund regularly and the returns are very nice. But the increase has become a bit stagnant so i wouldn't bother.

If hower you can afford to "chuck" ?1k into something that you wanna see nice returns consider other funds that are more specialised. I recently went from my Fid UK Special Sit. fund to the Fid Asia Special Sit. excl Japan. Ive got a few friends in the "business" and they were suggesting I go with this one. The FT risk is medium but if you can afford the loss, I personally think its a worthwhile "gamble". I trade with www.iii.co.uk. they are reasonably priced and the websites pretty helpful.

But as someone has already mentioned. Since your just starting off, consider the FTSE250. Much better than the outdated 100. HTH
 

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Very high area of risk to play with my friend. Would never recommend someone to invest directly in shares unless they knew what they were doing and are prepared to accept that all monies could be lost.
How right you are. i put ?1000 into a company called screen Fx last April.......the value today ....about ?150 . I also lost a shed load when British Energy decided to *^%$*&^%(&^ about with their plant.

The morale of the story is.Don't come to Caeclyd for financial advice !![:D]

ps

I have also made a few bob with other shares over the years.

The way I look at it is Ying Yang...the balance. The Lord giveth on one hand and grabs more with the other.
 

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I've got no investment experience at all, apart from the the few Abbey National and BT shares I was given. however If I were to invest I would choose high risk investments into single companies rather than managed funds with low returns. If you do your research, (and I mean absolutely thorough research into R&D budgets, management team, future product timeline, etc) you can glean enough to steal a march on the rest of the market. In the case of Apple for example, I have known this company and the industry well for over 15 years. In 1996 their shares were at a low trading at $13 and I really wanted to invest a token ?500 - ?1k, but I had no funds at the time. Within a couple of years it hit $50 and shortly afterwards the stock was split. It's now reaching $100 AFTER a stock split, so in real terms it's more like $200, and rising fast. That ?1000 @ $13 a share investment would have been very handy to cash in about now!

For me at the time there was no doubt about Apple going up and I should have borrowed the money to invest. Over 10 years of watching Apple has always gone up despite what the casual industry analysts have predicted. If you know an industry as well as this or are closely associated with a company you might feel more confident about investing in it rather than some anonymous index. always stick to what you know, and watch it like a hawk.
 

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I guess you have to decide whether you can afford to risk the money you have - and whether you want a short term or longer term return on your investment.

Have a look into 'penny shares' - these are risky but carry the best opportunity of a short term gain - e.g if you brought 1000 at a penny and they go up to 2.5p - then your money grows quite nicely! But if they go down to 0.25p, then the majority of your investment will be lost. I've got a friend who invested a grand into a company when they slumpted to a penny - sold them at 27p. Very tidy return.

I have gone with the safe bet, I own approx 3500 shares in Tesco. A nice solid investment as I brought a load for a couple of quid back in 2002 - and they are now over 4 quid apiece.

But you have to do your homework - get some literature and really understand the terminolgy, risks involved and the fees you may be required to pay to certain parties - and capital gains tax too.

Have a look for businesses involved in mergers or takeovers, that can sometimes be a good bet. A customer of ours used to stay at home all day watching working lunch and studying the financial press for news and movers. Sometimes you will hear of undervalued shares, in 2002 they were saying that Tesco shares should be 3.50-4.00 each - bloody good job they were right!

You can buy share portfolios through your bank, they will spread your investment over the most successful FTSE100 companies - and they will usually guarantee your money back - could be a safe introduction.

There is clearly some serious money to be made if you are willing to take calculated and educated risks...

Cheers.
 

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Discussion Starter · #19 ·
Well, since this post, I can give you my practice portfolio assesment!

I have invested ?600 in Shares & Units and taken into account comission and stamp duty.

In 5 days I'm down ?2.96. I have 4 shares (well 4 companies) I have bought into and 1 investment fund. The investment fund, well, this is the one I'm looking into. Up 2.84% over 6 days. So I already made a profit of ?2.04 on that one and my holding value is ?260. This trust was reccomended by 2 people.

Not a bad return at all over 6 days on 260 quid. That one updates every 7 days with the profit / loss, but I can see the increase or decrease every day.

I followed peoples 'tips' for the shares, and they are all stagnant or loosing. I know full well this should be long time, but it's really interesting following what's happening.

I'll see how it goes for a couple of months, kick myself if this trend with the fund continues and then may dabble in actual real money.
 

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You are going to hate me [:)] [:p]
The investment fund, well, this is the one I'm looking into. Up 2.84% over 6 days.?So I already made a profit of ?2.04 on that one and my holding value is ?260.?Not a bad return at all over 6 days on 260 quid.
but....

In 5 days I'm down ?2.96.
I'm sure you know, but don't forget its your portfolio you care about. Portfolio theory is the basis of stocks and shares really. You can't split your investment and say you made ?2.04 on a ?260 sum and ignore the loses...would be nice if you could! But your portfolio isn't just the professionally managed fund, it contains shares you have made a ?5 loss on yeah? It doesn't matter if A rises ?500 a day if B drops ?1000 a day. A weeks a bit early to judge of course but if you made decisions now, what you are currently doing would be sort of 'day trading'; there is no reason why you can't jump on a share and sell out at a profit within 24 hours.

BUT obviously having more than one share type is a good idea, avoids the 'all your eggs in one basket' problem. You can do whats called 'hedge your risk', the same thing Hedge Funds do. The idea is you buy two shares that are 'opposites' or as close to oposites as they can be, so if one drops the other will most likely rise. Of course if you get that match 100% spot on (unlikely in the real world anyway), you would always make zero, so how 'risky' you want to be determines how close a match they are. Say, you could put ?100 in oranges and ?100 in apples on the basis there is a 70% chance if people aren't buying oranges, they are buying apples. So even if the figures don't match - say you make a loss of ?20 on your oranges and a ?10 gain on apples - at least you have cut your loses a bit. You would have lost ?20 on the oranges if you hadn't bought the apples.?

But then?you need to consider whats called systematic and market risk, and...oh god Ive fallen asleep.?

[:p]

Shares can be fun and very rewarding if you know what you are doing of course. I just thought I would say the above not to criticise but make sure you understand how the market works before you spend any real money on it...would suck to get too excited too soon and blow alot of cash!?

I followed peoples 'tips' for the shares, and they are all stagnant or loosing.
Then why not sell short on the falling shares! [:)] You can make money in a rising and a falling market...?
 
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