Student Loan into shares?

JoeCrystal

@pjrobertson Taking into account of your status and the fact you are student, I would strongly advise against investing in shares or funds. After all, you cannot afford to lose money.

If you want to lock money away then look at ISAs or something safe and dull.

Still... if you want to invest in shares and such, you can do so, just do not expect guaranteed returns, just potential returns and potential losses. Are you willing to see £3000 into £1000 or £2000 because the shares you invested into did not do well?

pjrobertson

Thanks for all the advice people.

I currently have my ISA filled (obviously will have a new one in a few days) so am really just looking for something to do with my money!

Great post adambro.
I'll take your advice on not trading overseas to avoid complications and not getting sentimental over shares!

Maybe the FTSE 250 instead of the 100.
Do people honestly think the market is going to go down further for the next 3 years? (I'm on a 4 year course so another 3 in uni)
Obviously you all know better than me, that's why I'm posting here!

As I have another 3 years in uni I (effectively) have 3 years interest free so I think I'm safe in saying I'm ready to invest for 3+ years easily to 5.

@k8r4u
My friend's parents invested ~£10,000 in the FTSE 100 a year or so ago so I know all about the losses!

I think finding the naked trader will be a good idea, but just get the feeling that if I wait it may all be over and the share prices will be sky high again.
(I set up a portfolio @ google finance over x-mas when I wanted to buy Apple shares (I was only 17 then) and I could have made £300 on £1500 if I'd invested then!)

Dave101t

opinions4u wrote: »

The current prize pool is 1% pa. With the chance of no win.

im basing figures on what i have won, im luckier i guess

MsHoarder

pjrobertson wrote: »

As I have another 3 years in uni I (effectively) have 3 years interest free so I think I'm safe in saying I'm ready to invest for 3+ years easily to 5.

Just checking you've read the small print, you will be charged interest whilst you are still a student, it is just that you will not have to begin to repay the loan until you leave university. So not quite interest free.

Manual_Reversion

OP: Go for it. If you're young and single with no responsibilties I'd invest borrowed student loan money, although only since the money is borrowed cheaply and with lenient repayment rules. If you've got 3+ years before graduating, I'd say you can afford to risk the money on the stockmarket, although you'd have to have very good knowledge and / or balls the size of a planet to invest in individual stocks. If I was in your position I'd invest in funds and wrap everything you can in an ISA. Hopefully when you graduate you'll have a nice tax-free house deposit. Or you might just be able to buy one outright given the current market correction. Good luck, and make sure that whatever you do, you could live with yourself if you lost the lot.

pjrobertson

MsHoarder wrote: »

Just checking you've read the small print, you will be charged interest whilst you are still a student, it is just that you will not have to begin to repay the loan until you leave university. So not quite interest free.

Thanks for that. I said 'effectively' interest free because of this. From what I gather student loans are interest free, just they add interest due to inflation (and the current interest is ~1%)

Manual_Reversion

I'm definitely leaning towards investing, and will take yours (and everyone else's) advice on not investing in individual stocks.
I'll keep an eye on the FTSE 100 & 250 to see what's happening with them.

I'm still tempted by Apple shares as I feel I've heard rumours of new product releases, new operating system (this year) and such. I feel technology is not going to do badly at the moment as everybody is so reliant on it.

About opening a stock & shares ISA, where does everyone reckon the best place to do this is. Is Hoodless Brennan a good bet (they say they charge £50 a year for the ISA, plus transfer fees of course)

gozomark

pjrobertson wrote: »

I'm still tempted by Apple shares as I feel I've heard rumours of new product releases, new operating system (this year) and such. I feel technology is not going to do badly at the moment as everybody is so reliant on it.

do you believe you know more than the average investor, ie a fund manager who spends all day looking at stocks, and talking to analysts who do the same ? If not, what you say is already in the price

Manual_Reversion

gozomark wrote: »

do you believe you know more than the average investor, ie a fund manager who spends all day looking at stocks, and talking to analysts who do the same ? If not, what you say is already in the price

Spot on.

If you have an emotional attachment to Apple then by all means fulfil it by investing in its' company shares. Just make sure it's a small-ish percentage of your portflio in order to mitigate against you making a bad call. I'm thinking 5-10% depending on your confidence of the call.

I genuinely wish you best of luck; I think you could potentially graduate with a handsome pot of cash, good education, into a finacial lanscape where cash is king, for whatever you choose to do with it. It's yours for the taking.

sabretoothtigger

Apple is obviously going to suffer short term as its customers cut back from premium products but they are an innovative and unique company and maybe a good long term bet but I would not be looking to rush into paying todays prices for the promise tomorrow of some returns

I think students still get this cash in a lump sum, I'd place that lump sum in an interest account and use it as a feeder account for gradual accumulation of share and fund positions.
Lots of companies welcome small regular investment by direct debit, etc

Assuming the Ftse is low risk means you are off to a bad start and have much to learn on the best returns for the least risk, best to take it slow and avoid lump sum investing.
I speak from painful experience


Also dont pick shares by your personal experience as a consumer, that is only one minor part of the business and good companys can and do go broke.
Lots get caught out with personal bias unfortunately, its a negative in your judgement imo

mrposhman

adambro wrote: »

The other thing I would say is get a copy of The Naked Trader by Robbie Burns. It is an ideal introduction into share trading.

I'd have never guessed you'd read the naked trader.

Your post looks like you've cut and pasted it from the book!!