Share Dealing Newbie

dchurch24

Hi,

I have never dealt in shares before, but feel like I would like to.

I don't have vast sums to invest, but am in a position where the 'expendable' part of my income will be increasing over the coming year, so I need to know if this is a cost effective way to invest money on a regular basis.

Could anyone explain to me in laymans terms how this works, which is the best (cheapest?) broker to use, if there is one on-line and the pitfalls that I might encounter?

It would be very much appreciated.

al_yrpal

The idea is:- Buy low - sell high, and, if you can, get good dividends too thats a bonus!

When betting on the gee gees study the form book. When share dealing.... erm.....

My advice - if shares appeal to you join an investment club where you'll learn what factors matter, and the logic behind what to buy, when to buy and most important, when to sell.

Deemy

dchurch24 wrote:

Hi,

I have never dealt in shares before, but feel like I would like to.

I don't have vast sums to invest, but am in a position where the 'expendable' part of my income will be increasing over the coming year, so I need to know if this is a cost effective way to invest money on a regular basis.

Could anyone explain to me in laymans terms how this works, which is the best (cheapest?) broker to use, if there is one on-line and the pitfalls that I might encounter?

It would be very much appreciated.

Try squaregain.co.uk for a broker.

They also do a self select ISA - The fees are competitive and it has a good dealing interface, i.e. allows for limit and stop orders without time limits.


As for pointers - You want to look to invest for the long-term, using simple rules for when to liquidate for example say if the price falls below the 200 day simple moving average, else hold. Also look at managed investment trusts rather than individual stocks, (you get the tools on the online charts)

Bazn

hoodless brennan are good.... i'm a share dealing novice too and their low commissions are great if you're not investing vast sums.

dchurch24

Excellent - thanks for the advice.

Do you think that it might be worth trying to start a share dealing club at work?

Deemy

dchurch24 wrote:

Excellent - thanks for the advice.

Do you think that it might be worth trying to start a share dealing club at work?

Yes, you can all learn together... though call it a shares investing club

heres something to get you started

http://www.londonstockexchange.com/en-gb/pricesnews/investorcentre/knowledge/investmentfactsheets/investclubs.htm

cheerfulcat

dchurch24 wrote:

I don't have vast sums to invest, but am in a position where the 'expendable' part of my income will be increasing over the coming year, so I need to know if this is a cost effective way to invest money on a regular basis.

Could anyone explain to me in laymans terms how this works, which is the best (cheapest?) broker to use, if there is one on-line and the pitfalls that I might encounter?

Cost effective only if you use a broker with very low charges ( even then it works out fairly expensive for *very* small purchases ). Every purchase will cost you a dealing charge + 0.5% tax. Every sale will cost another lot of commission. If you are contemplating a trade at £100 per month, the cheapest of the brokers so far mentioned ( HB ) will cost you 7.5% to buy every time. The Halifax offers a useful service for small investors, the Sharebuilder, which costs £1.50 + tax for a purchase and between £5 and £11.95 for a sale. Buying costs are so low because customers' purchases are bundled together and traded on certain set days, so you can't choose your entry price into a stock. AFAIK there is no other broker set up for regular savings as such. Another idea might be to make regular payments into one of the high interest regular savings accounts, making a share purchase when you have saved, say, £500.

Two of the biggest pitfalls are over-trading and listening to strangers on the internet . Trading too often *will* eat into your profits, no matter how sure you are that you're on to a good thing. Far better to do extensive research first, then choose your shares when you know what you're doing.

Be very suspicious of any "tips" you get from internet bbs - there is a fairly common practice called " ramping " which involves people talking up a share they own in order to make a profit.

Which brings me to the third pitfall: penny shares. Beginners often buy penny shares because they're " cheap " ( strictly speaking <£1 ) and they get lots of shares for their money. But penny shares are often not cheap at all; even shares priced at, say, 6p can be wildly overpriced! They are very popular amongst small and beginner investors - as good a reason as any to stay away from them, at least until you know what you're about.

HTH!

Cheerfulcat

SAP_Saver

I am interested in starting up a share/investment club if anybody else is, feel free to contact me on Pete_Doyle7@Hotmail.com

peterg1965

For what it is worth, I am a very small share investor and new to this form of investment. I opted for the Halifax Sharebuilder account. It seems to offer reasonably low costs of buying and selling by conducting deals on set dates. It obviously doesnt give you the ability to buy and sell in 'real time' but my aim was to build up a small portfolio of popular shares.

Thus far I am very content with the service.

Pete :rotfl: