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Starting Sharesave when company is at a high
OGM
Posts: 16 Forumite
I'm considering signing up to my company's Sharesave scheme but am wondering if it matters that the share price is currently near the all-time highest levels reached in 2000 and 2007.
I understand that I can get my money back if the shares are worth less than my option when the scheme matures in 2016, so all I have lost is 3 years of meagre interest in a savings account, but I'm wondering if there is any point given the shares are very high at the moment?
Thanks to the 20% discount on the option I can still make a profit even if the shares fall somewhat, but would I be better off waiting for next year's scheme?
Long story short: how should I interpret a company's share price being near the all-time high? Is the only way down?
I understand that I can get my money back if the shares are worth less than my option when the scheme matures in 2016, so all I have lost is 3 years of meagre interest in a savings account, but I'm wondering if there is any point given the shares are very high at the moment?
Thanks to the 20% discount on the option I can still make a profit even if the shares fall somewhat, but would I be better off waiting for next year's scheme?
Long story short: how should I interpret a company's share price being near the all-time high? Is the only way down?
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Comments
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Do you have some reason to think it will be lower next year? It may be treble today's price.
Was 'the only way down' last time it reached an all-time high?0 -
IME I have always taken them as it is a good way to save some money in any event. As you say if they tank just take the savings. If not take the option and enjoy the profits."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Heads you win. Tails you break even.
Pile in and stop over-analysing.0 -
What I did was to take out the sharesave and then after a year if the price had dropped I would cancel it and take out the next years one. If the shareprice had gone up I'd keep it.0
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Nearly 100% of the time a company sharesave is better than any other investment/savings you can possibly do.
Normally you get a 20% discount, and a free shot at big money if the shares rocket, and if they crash you dont lose a penny.
Its like a very high risk investment, without the risk.0 -
What they all said. I always took as much as I could, and even when they were out of the money I never regretted it.
I did cancel one so as to be able to apply for the max on a later one after the share price crashed. The loss of interest was trivial, and will be even more trivial now - are they paying any interest on SAYE option plans?"Things are never so bad they can't be made worse" - Humphrey Bogart0 -
No, they aren't paying any interest at all, so I would just get back whatever I had put in. Hadn't considered the fact I can just pull out after a year and reinvest at the lower price, so it really is no-lose. Think I'll dip my toe in at 50 quid a month and if I'm happy with it go for more in the new scheme next year. Thanks all.!0
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From my last companies share save scheme they were not allowed to give interest on the account - worst case you lose 3 years worth of interest - best case is you gain significantly. As others have said - if the share price really bombs over the next twelve months you could pull out and start again provided thats something the company scheme allows.0
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opinions4u wrote: »Heads you win. Tails you break even.
Pile in and stop over-analysing.
No he doesn't break even, he loses some savings interest.
Did you not read his post before commenting and giving advice, or was it too difficult for you to understand?
(Of course, savings interest is currently very little, but it may be significant.
I agree the sharesave scheme looks a very good deal for the OP, but thats beside the point.)“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
No, they aren't paying any interest at all, so I would just get back whatever I had put in. Hadn't considered the fact I can just pull out after a year and reinvest at the lower price, so it really is no-lose. Think I'll dip my toe in at 50 quid a month and if I'm happy with it go for more in the new scheme next year. Thanks all.!
Don't worry about it. Personally I would stick as much in as possible.
Putting £50 per month into a 2.5% ISA would only get you about £70 over three years. The shares could go up a lot in that time. If they tank, then you are only £70 worse off.
http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php0
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