Investing in shares

ebonylight

Not right now but in the future I am thinking of buying some shares - however I don't know the first thing about shares and the stock market!

Any advice - and do feel free to treat me like a blonde - I act like one!

Thanks

cogito

If you don't understand an investment, don't do it. The banks bought investments they didn't understand and look what happened to them.

G_M

Investing in individual company shares is a risky business requiring knowledge of the company you are investing in. If the company goes bankrupt (Woolworths?) you lose the lot.

For a beginner, investing in unit trusts or investment trusts is more sensible. The trust then uses your money + lots of other peoples, and buys shares in a spread of companies. If one of them goes bust it doesn't matter too much cos (hopefully) the others will be making money so the value of your 'units' is less affected.

Of course, if the stock market as a whole goes down as has been the case over the last year, your units will still drop in value, but this year is probobly a good time to start thinking about investing - the huge drop in value across all shares/trusts means that the chances are they will not drop further (or at least not much further!) and should start to rise again (sometime).

Plus, if you use your ISA allowance when investing in unit trusts, any gains you make will be tax free.

You still have a huge choice of investment types: unit trusts can specialise in geographic areas (UK, Europe, Asia etc) and in market areas (telecoms, mining, retail etc) so you still need to do research to decide where to put ypur money........

Blah99

Buy a book called "The Naked Trader 2" by Robbie "where'd me hair go" Burns. That book will show you how much you don't know and what you need to learn before you put your first penny into the markets.

sabretoothtigger

You dont have to buy something to be interested in its progress.

We're in a bear market which means everything is generally getting cheaper, theres no rush to commit money afaik so why not choose companies you like and watch them get cheaper till you like the price

adambro

Blah99 wrote: »

Buy a book called "The Naked Trader 2" by Robbie "where'd me hair go" Burns. That book will show you how much you don't know and what you need to learn before you put your first penny into the markets.

Seconded. I'm no newbie to the world of investing but have that book currently by my side and finding it a very good read.

Presumably, if the OP has 10k of debt they'll be looking to get that sorted before they can afford to potentially loose money on shares so they will hopefully have plenty of time to read up and learn.

Definitely investigate making use of your ISA allowance. This year I'm using 3.6k for cash and 3.6k for shares and building up a nice pot of money to trade with without incurring capital gains tax.

stamfordblue

A good book to read is Come Into My Trading Room by Dr. Alexander Elder.

Reaper

adambro wrote: »

Definitely investigate making use of your ISA allowance.

Not essential for many people. In the coming tax year you can make £9,600 profit before you start to get taxed.

mr_fishbulb

Reaper wrote: »

Not essential for many people. In the coming tax year you can make £9,600 profit before you start to get taxed.

Although investments shouldn't be cashed in after 1 year

adambro

Reaper wrote: »

Not essential for many people. In the coming tax year you can make £9,600 profit before you start to get taxed.

Sure but even if you don't expect to realise profits of £9,600 in year one, you can build up a nice big pot of money which you can continue to trade with and eventually (hopefully) realise profits of more than £9,600. Be optimistic! If you are serious about trading you want to plan ahead and plan to be successful. You don't want to suddenly get a few years down the line and realise you've not used anything of your ISA allowances and are now having to pay capital gains tax to HMRC.

I currently don't do all of my trading within an ISA and obviously everyone's circumstances are different but anyone interested in trading needs to at least research ISAs to understand how they can potentially be helpful.

tradetime

mr_fishbulb wrote: »

Although investments shouldn't be cashed in after 1 year

Comes down to the same old arguement that comes up every so often with saving vs Investing, and how they aren't the same. People often use the term "trading" to refer to anything to do with the market. Trading essentially encompasses daytrading, swing trading, and position trading, investing is anything longer. I have recently opened an ISA for the purposes of investing, and it certainly would be of little use to most styles of trading.