Have spare £1000. Wanna dip my toe in share buying. Where do I start??

lancslass2008

Firstly, I am aware that where there is money, there's likely to be crooks, so am not foolish enough to just go on Google and subscribe to an AMAZING get rich quick scheme.

Call it luck, intuition, whatever you like, but I seem to have this knack of saying to myself........Hmmmmm, xxx company are not doing well at the moment. I bet the shares in xxx company are cheap. Anyway, to cut a long story short, 6 months later I am kicking myself for not buying some shares.

My problem is...........While I am well educated, I just don't have a clue where to start. I imagine there are agents/brokers.

Do they deal with clients with just £1000?

What is my 1st step?

I'm not sure if this is relevant, but would prefer to deal in cash to by my shares, for my own reasons.

Thanks all

Manics_2

Do you mean you want to go to a counter and hand over cash for a share certificate? Most share trading is electronic these days which means you need a broker to electronically hold the shares for you.

I use http://www.tdwaterhouse.co.uk

These guys will let you buy and sell shares after a few clicks of a button.
You can buy any amount of shares, you could buy 1 share of British Airways at £1.35 if you wanted.....the problem is you're going to get charged £10 to trade plus commission so buying in such volume is clearly not viable.

Most people will tell you you need to invest around £5k per trade to get a decent weighting of profit after expenses.
If you invest £1k and the shares rises 10% thats £100 profit....but expenses will take quite a chunk from that profit (both buying & selling commissions).

For more information on strategy, sectors and shares check out http://www.fool.co.uk

1984ReturnsForReal_2

I'm not sure if this is relevant, but would prefer to deal in cash to by my shares, for my own reasons.
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Tour gonna have trouble then..

Cozworth806

Then you will be looking at about £35 minimum to buy and sell each block of shares so out of your £1000 you will spend a huge percentage in fees.
Where do you start? You don't! Give it up as a bad job, or go to a bookies.

Blah99

lancslass2008 wrote: »

Firstly, I am aware that where there is money, there's likely to be crooks, so am not foolish enough to just go on Google and subscribe to an AMAZING get rich quick scheme.

Call it luck, intuition, whatever you like, but I seem to have this knack of saying to myself........Hmmmmm, xxx company are not doing well at the moment. I bet the shares in xxx company are cheap. Anyway, to cut a long story short, 6 months later I am kicking myself for not buying some shares.

My problem is...........While I am well educated, I just don't have a clue where to start. I imagine there are agents/brokers.

Do they deal with clients with just £1000?

What is my 1st step?

I'm not sure if this is relevant, but would prefer to deal in cash to by my shares, for my own reasons.

Thanks all

Your first step is to buy a book called "Naked Trader 2" by Robbie Burns. That will show you what your knowledge gap is. Don't even attempt to buy shares before reading it.

Execution only brokers will let you buy shares with around £100, so £1000 is no problem. It's the absolute minimum I'd recommend you invest per company, because fees and stamp will kill you otherwise. I recommend you actually aim to invest £2000 per company, as that gives you a more realistic profit point (I think the £5k suggested above is a bit excessive as a mimimum). A website like iii.co.uk will show you your profit point based on investment amount.

If you would prefer to deal in cash, you're out of luck. You'll be credit checked to open an execution only (or spread betting, or cfd etc) account, and you'll have to deposit by transfer (switch payment, bacs, whatever). There is no way you'll be able to turn up with a grand in used fivers and give it to someone, that's an entirely different industry.

Here's a hint. If you're hoping you can use share dealing to quickly hide cash in opaque assets, you're way off.

JoeCrystal

That me out then. Share buying and selling are really expensive in many respect. :eek: One to two thousand pounds in a company sound rather risky unless it is perfectly normal? Do people spend that much on one company's share only?

tradetime

JoeCrystal wrote: »

One to two thousand pounds in a company sound rather risky unless it is perfectly normal? Do people spend that much on one company's share only?

Perfectly normal, assuming you have that money to allocate to investing. One or two thousand would not be a big holding.

Aegis

JoeCrystal wrote: »

That me out then. Share buying and selling are really expensive in many respect. :eek: One to two thousand pounds in a company sound rather risky unless it is perfectly normal? Do people spend that much on one company's share only?

I saw people boasting about having tens of thousands in Northern Rock while it was going down, certain they were going to make a massive profit out of it. I just hope for their sake that it was money they can afford to live without!

If you're looking to invest without buying shares, consider unit trusts, OEICs and ETFs. These products all (potentially in the case of ETFs) buy into a number of companies, allowing you to diversify your holding without requiring a large spend. They might be more suitable for your desire to invest.

JoeCrystal

... What can I do with ten thousand pounds... About enough money to last me for a year and tad more without a job...

Someone politely wrote the list of risks and potential returns for me and shares was one of the highest risk of all. So yeah, unit trusts, OEICs and ETFs would seems to be best. :beer:

Are there any good book or website about them and them alone? I am at the moment saving up for lump sum deposit of full allowance on 6th April to go into ISA. I am also expanding my emergency fund to take into account of inflation and such. Leaving about two hundred pounds a month to 'invest' in 'Investing'. Large majority is still going into my 'Savings'

Lokolo

Um although a lot of people recommend some good reading its quite hard to learn to know everything. I usually go about, look at HL (Hargreaves Lansdowne), iii for their fund filter, morningstar, trustnet. Look at funds, work out what means what and ask questions on here.

McSaver

JoeCrystal wrote: »

That me out then. Share buying and selling are really expensive in many respect. :eek: One to two thousand pounds in a company sound rather risky unless it is perfectly normal? Do people spend that much on one company's share only?

If you use halifax's sharebuilder the commission is £1.50 per trade which would be more suitable for smaller investments. But using the sharebuilder would mean you wouldnt be able to buy at the moment you wanted the shares at a price you would like to buy at.

My minimum trade on stocks and shares is £500 with a £10 a trade broker which is a 4.5% fee.