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  #1  
Old 23-10-13, 07:36 AM
ShaunB-91 ShaunB-91 is offline
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Stocks & Shares

Morning OC3D,

I'm just wondering if anyone has any knowledge or has ever bought stocks/shares before, I want to buy some, kind of just for fun but it might make me money as well!

I really don't know where to start, I just Googled "How to buy stocks and shares" and my bank came up offering an account for doing this, it seems they take a % off you, I don't know if this is like monthly, or if you get a profit etc. They were actually offering an account were they give you 10k to start, WHAT! (I obviously don't want that, I'm just doing this for fun).

Any ideas?

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Old 23-10-13, 08:07 AM
akzy akzy is offline
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A good place to start for UK stocks and shares would be http://www.iii.co.uk/. It's a good place to start as you can make fake portfolios so you can see how it works before you put money in. It also shows you many different types of investments you can make, not just shares!

For a lot of these, unless you plan on adding a lot of money, you'll be thinking more long term shares as there is a fee (like on all sites) for buying a share.

Hope this helps.
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  #3  
Old 23-10-13, 08:27 AM
ShaunB-91 ShaunB-91 is offline
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Originally Posted by akzy View Post
A good place to start for UK stocks and shares would be http://www.iii.co.uk/. It's a good place to start as you can make fake portfolios so you can see how it works before you put money in. It also shows you many different types of investments you can make, not just shares!

For a lot of these, unless you plan on adding a lot of money, you'll be thinking more long term shares as there is a fee (like on all sites) for buying a share.

Hope this helps.
Thanks, I'll check that site out. So everywhere is going to ask for a fee, is there no kind of direct way of buying, why does it have to pass through another company to buy them?

I didn't plan on putting much in, it's just for fun really, I've seen a share cost $11, so say I bought one (if thats possible), if their market goes down then I'd loose that money? Plus would there be some sort of conversion charge because it's US and I'm in Britain? Like if I make a payment to a US company my bank charges me £1.50 if I remember right.
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Old 23-10-13, 08:38 AM
WeLikeLead WeLikeLead is offline
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Originally Posted by ShaunB-91 View Post
Morning OC3D,

I'm just wondering if anyone has any knowledge or has ever bought stocks/shares before, I want to buy some, kind of just for fun but it might make me money as well!

I really don't know where to start, I just Googled "How to buy stocks and shares" and my bank came up offering an account for doing this, it seems they take a % off you, I don't know if this is like monthly, or if you get a profit etc. They were actually offering an account were they give you 10k to start, WHAT! (I obviously don't want that, I'm just doing this for fun).

Any ideas?
Hi,

Since this is going to be your first foray into Stock trading I would suggest that you put money into 'well' known and Global brands such a Vodafone or Shell to list two examples. Then have a smaller capital pot which will be used to place into less known companies, which could yield better returns for the investment. However these companies are also just as likely to lose you that investment.

In regards to the banks, they take a brokers fee (%) of any trade you order, whether you make or loss money makes no difference to them, as your brokers they will collect their fee. So do not get caught trading short if the market suggests everything is going long.

You should look at commodities, riskier form of trading but the payouts are higher as a result.



Thanks,
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Old 23-10-13, 09:11 AM
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SparkleDJackson SparkleDJackson is offline
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Dad used to do the stocks till his trader screwed him. Dad said if x drop to level y sell. The trader never sold. Dad lost a very very large sum of money. Basically all he had made in the period he was trading. Be very cautious broseph
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Old 23-10-13, 09:21 AM
ShaunB-91 ShaunB-91 is offline
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That's unlucky, nobody will be trading on my behalf!

It's just confusing, that website the akzy listed ask for at least £10 a month, I don't see why I should pay them £10 a month.
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Old 23-10-13, 09:44 AM
jamesriley94 jamesriley94 is offline
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It depends how much you've really got to spend.

You go through companies/stockbrokers when you buy stocks and shares (unless you've got loads to invest) - so you tell them who you want to invest with and they charge you a transaction fee (usually about £8 in the UK). Unless you're intending to invest a couple of hundred at least, it's actually pretty unlikely that you'd make much profit in the short term if you even manage to cover the £8...

For example - say you're only wanting to invest £50, the stocks of the company you've invested in would have to go up 16% just for you to cover the £8.

That's just something to bear in mind - I know it sounds insignificant, but I'm just trying to illustrate how pointless it is unless you have at least a couple of hundred to invest.

Now then, onto who to invest with:
You get high risk and low risk shares. Low risk would be the bigger companies like Sainsburys, McDonalds, etc... Who you know will grow and make you money in the long run, but you know they're never going to come up with a world changing business plan that's going to double your money over night, but you would expect to make several % in a year which still would be better than a bank these days.

Smaller higher risk companies however, (a Pharmaceuticals for example) - if they discover a new drug, they can get a 20 year patent for producing that drug, be the only company legally allowed to product and sell it, and so effectively make you loads in a short space of time. However, if you invest in company A, and company B discovers the drug and gets the patent, then you don't make anything, and could easily end up losing all of your money. Think of it like a 1/20 chance if you go this way.

How much money do you actually have to invest?

As appealing as high risk investments sound, if you do it with a few hundred quid - maybe even a couple of thousand, you'll most likely end up losing your money. The point of trading is to spread your money out across multiple companies so if one fails, you've not lost everything. But, as I said in my first paragraph, due to fees, you can't really do this unless you have several thousand pounds to invest.

As for what you say in the OP about banks offering it...that's not entirely true. The banks that will offer it will give you say 3/4% a year and then pool everyone's money together and go and invest themselves. Chances are they'll do this in low-medium risk companies so you're unlikely to lose your money, but if the bank makes 10% on your money for example, chances are you'd only see half of that as the bank will make profit on it too. This isn't really trading stocks however - it's more like a low risk bank account, where you may see more % interest than you would in an ordinary bank account.

You also get government guilts, which is similar to the bank account investing the money, but the government back up all the money you give them so you can't ever lose the money you invest (you may not make money, but at least your safe).

I sense you're just wanting to do this for a bit of a hobby yes? In which case, I doubt the bank accounts or government bonds would apply to you as you don't really do anything with it.

As I've said a few times though, if you're just wanting to do this to have a bit of fun, and only have a couple of hundred £ to invest, then invest in lower risk companies - you might make more than if it were in a bank, but if it's only a few hundred pounds, then that probably won't matter. Don't invest in higher risk, because you'll just end up losing all your money, and tbh, with the amount of money you're likely to have, you'd probably have better odds playing roulette.

This is probably the first time a degree in Economics has come in useful on these forums
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Old 23-10-13, 09:52 AM
WeLikeLead WeLikeLead is offline
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Quote:
Originally Posted by SparkleDJackson View Post
Dad used to do the stocks till his trader screwed him. Dad said if x drop to level y sell. The trader never sold. Dad lost a very very large sum of money. Basically all he had made in the period he was trading. Be very cautious broseph
Did he have the instruction to sell in writing?

@ShaunB-91

Because you cannot trade without a broker... As you are not a qualified broker you will require someone to hold 'your' account, as such most non-bank based trader/brokerage houses will effectively charge a subscription in order for you to use their account as a 'holder' for your own. Your bank will not as you by default already have an account with them etc.




Thanks,
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Old 23-10-13, 09:56 AM
ShaunB-91 ShaunB-91 is offline
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Thanks for clearing that up jamesriley/welikelead.

Meh, more difficult than I thought then and I wasn't looking to invest a load of money either. :\

What about spreadbetting, any limitations on that?
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Old 23-10-13, 10:02 AM
jamesriley94 jamesriley94 is offline
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Originally Posted by ShaunB-91 View Post
Thanks for clearing that up jamesriley/welikelead.

Meh, more difficult than I thought then and I wasn't looking to invest a load of money either. :\

What about spreadbetting, any limitations on that?
Speadbetting is about the same in terms of how much you actually have to invest to make a profit.

Still probably not worth it unless you have a few hundred.

As a bit of an example, at my University there's 'Investment and Trading Society' (not that I go, but my housemates do), they all have to pay £40 at the start of the year, then pool all the money together and spread bet it all, then share out the profits at the end of the year.

So in total with 60ish members, they had £2500 or so to spreadbet with. At the end of the year, they made £4 profit each - and these are meant to be clever minds with a keen interest in the stock markets. That just shows how difficult it really is to make money in stocks unless you have a fair bit to invest in the first place.
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