Advice and ideas on stock market, tracker funds, etc please.

runciblespoon

BestInvest have a list of trackers - from their funds search just pick 'Index tracker' from the 'Investment theme' list. These are unit trust or OEIC trackers: if you buy from the right place there's no initial or transaction fees, only the annual fees. As these fees are a percentage there are no extra costs for dealing in small quantities

There are also ETFs, which incur a fixed dealing fee (between £1.50 and £15 to buy or sell irrespective of the deal value, depending on who you do it with). That means it becomes more costly to hold small stakes, but typically the annual charges are much lower. Morningstar provide a list of ETFs. Usually you buy ETFs using the same broker you'd use to buy shares.

Both those sites will allow you to filter the lists with various criteria.

There are differences for taxes and other reasons - can anyone give a rundown?

Blah99

You need to be careful when looking at major index (FTSE, S&P etc) trackers. Read this article:

http://www.londonstockexchange.com/en-gb/pricesnews/education/interchange/Authors/mikelenhoff/andnowtherecessionthatequitymarketsarediscounting.htm

Mamzie

You lot are great, really helpful.

What does p/e actually mean please? There is so much I don't understand yet, spread, etc that I find that article slightly confusing.

Blah99

p/e ratio stands for "Price to Earnings ratio", and it's the current share price divided by the earnings per share ("EPS"). The EPS is how much cash from its profits a company allocates to each share.

PE ratios are quite hard to understand in absolute terms. The way they are normally used is to compare historic data on "value", or compare the "value" of a company/share to its peers. I've put value in quotes and I'll leave its definition out of this post.

For example, ACME Oil might be listed on the FTSE but it's a 100 man operation that turns over £50m a year. BP is a massive operation that turns over billions. Both are in the same market sector, but how do you compare them? You can't directly, but you can using the PE ratio. If ACME's PE ratio is around 30, and BP (and the sector's average) PE ratio is around 15 then you can say that investors believe there is "more growth" possible in ACME's business than in BPs and the rest of the sector.

http://www.investopedia.com/terms/p/price-earningsratio.asp

If you're interested in this stuff and you want to get started on share dealing buy a book called The Naked Trader 2 by Robbie Burns. It's a very good introduction to basic principles and will get you started on the right road.


*edit* Oh, and the spread is the difference between the bid and offer price of a share. If a share's bid offer spread (also called the "touch", oo-er missus) is 100p - 110p, if you bought the share then sold it immediately you'd buy it at 110p and sell it at 100p. So you've immediately made a 10p per share loss, excluding trading fees and stamp duty.