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rbs shares, to buy or not to buy?

Hello fellow money savers!

My father is going to give me a nice sum of cash for my 21st and has advised me to buy 3-4k worth of RBS shares. Now i know this is a gamble, but i would love to here your thoughts on this one.

I will be holding onto them 3-4 years.

Much thanks!
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Comments

  • Masomnia
    Masomnia Posts: 19,506 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    If they are nationalized then the money will be gone, do you really want to risk that?

    I personally don't think they're that good a choice in terms of long term recovery, but I know others here disagree with me. Even 3 - 4 years I don't think you're going to get a return worth the risk of losing the lot.

    If it were me I'd buy some FTSE100 companies that are solid fundamentally but going cheap, and paying a reasonable dividend.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • adambro
    adambro Posts: 243 Forumite
    There is no appetite now to further nationalise RBS and little need to. As such, I'd feel reasonably confident that in 3-4 years time, RBS shares will be worth much more than they are today. I, and others in many family are holding a sizeable number of RBS shares that we've acquired via a number of different ways and we certainly aren't considering selling at the current time. That doesn't mean we'd want to increase our exposure to RBS though by buying more shares but it obviously depends on your individual circumstances.

    If you are young with few commitments then you can afford to take more risk because you have time in your working life to earn cash. If you are older, approaching retirement, obviously you're appetite for risk has to be much reduced.

    So, would I consider buying some RBS shares now? Certainly but I am unlikely to do so whilst I'm fully invested in other companies which are making me a good return. Whether you do will depend a lot on how 3-4k compares to your total wealth. Obviously you don't want to put all your eggs in the one basket. If you do go ahead and buy 3-4k of RBS shares though, make sure you make use of your ISA allowances to shield you from future potential capital gains tax liabilities.
  • McSaver
    McSaver Posts: 609 Forumite
    RBS??? And thats a lot of money to be placing into a risky stock. If your not bothered and afford to lose the money then you can go ahead with the investment. However I would rather be looking at LLOY or BARC as more shrewd alternatives.
    Had £80,000 in Savings - All GONE!!! BYE BYE
    :A Single, 27, Aspie, Gooner :A
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    edited 7 April 2009 am30 7:18AM
    robsaves wrote: »
    My father is going to give me a nice sum of cash for my 21st and has advised me to buy 3-4k worth of RBS shares.
    Okay, you may well make a lot of money on them, but you could also lose a decent wedge of it too. Should you really put all your eggs in one basket?

    I know nothing about your circumstances, but you need to plan your savings and investing around you life objectives.

    What purchases do you want to make in the future? Holiday? Car? House? If you've invested in shares and their value is down 50% when you need the capital for something else, then you're not in a good position.

    When I was 21 I saved. I didn't invest. I wanted to buy my first house, and I didn't want to risk my deposit losing significant value. Had I invested in shares over a 2 year period prior to buying I'd almost certainly have lost money and wouldn't have been able to buy my house for a further 5 years.

    If you have little or no savings elsewhere, I'd bang the first £3,600 in a cash ISA paying 3% or more and open a regular savings type account (4% to 6%) to try and build up bigger savings.

    If you really fancy a punt on the markets, consider:

    a) Single share = high risk
    b) Half a dozen selected shares = quite high risk
    c) An index tracker fund (not necessarily FTSE) = medium risk (depends on the index tracked!)

    You could also consider buying in to an index tracker for £50 a month, rather than chucking everything at it.

    I like Dad's style - he's given you absolute choice as to what to do with the money and you might do very well out of it (but know that the risks of losing are VERY high).

    Don't let greed cloud what you really need to do with that money though. Are you in a position that allows you to gamble? Or are you in a position that allows you to build steadily for your future?
  • Trollfever
    Trollfever Posts: 2,051 Forumite
    Has all the toxic lending on their books actually been revealed and provisioned for?

    .
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    Trollfever wrote: »
    Has all the toxic lending on their books actually been revealed and provisioned for?

    .
    You don't know it's toxic until it goes bad!

    BUT: The Asset Protection Scheme should just about mitigate any more nasty stuff impacting negatively on the share price, providing the platform for recovery and growth.
  • Buddy195
    Buddy195 Posts: 144 Forumite
    McSaver wrote: »
    RBS??? And thats a lot of money to be placing into a risky stock. If your not bothered and afford to lose the money then you can go ahead with the investment. However I would rather be looking at LLOY or BARC as more shrewd alternatives.

    Wouldn't say any banks are shrewd at present. I've dipped in and out of bank shares making quick small profits and buying back in when price goes down.
  • latecomer
    latecomer Posts: 4,331 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    I'm considering doing the same although not on the same scale.

    out of interest, who do people recommend for just doing the odd share trade? Simple and quick is all I need.
  • ricll
    ricll Posts: 115 Forumite
    Bought £1000 in RBS shares 2 days ago and if were to sell today would be making around £30. That's more than my £12K savings pay per month in interest. That said I will be doing just like Buddy195, buying and selling for quick small profits, wouldn't risk a lot of money for a long period of time.
  • mr_fishbulb
    mr_fishbulb Posts: 5,224 Forumite
    Part of the Furniture Combo Breaker
    ricll wrote: »
    Bought £1000 in RBS shares 2 days ago and if were to sell today would be making around £30.
    Taking into account broker fees?
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