Buying Shares

Truly.Yours

I am a student. I have about £100 to spare which I am looking to invest for the long term. I will not be needing this cash. (but still want it of course).

The prospect of owning shares appeals to me, and after reading many posts here on this forum, I too, would like to start my own portfolio.

I have read the various articles and posts by Martin and other than that, and looked into how to buy shares.

As it will be a one off purchase, it seems http://www.hoodlessbrennan.com/ are the cheapest with an £8 charge on buying. (and then £8 for selling later).

I have considered which shares and after looking at many posts I am conisdering Lloyds TSB, and purchasing shares in the Lloyds Banking Group.

I am looking to buy about £100 worth. Is this adivisable?

I understand that any advice is given by fellow users, who may not be experts. But you will definalty know more than me.

Thank you.

ricll

i don't think it's worthy spending less than £1,000 in shares because of the charges

McSaver

www.iii.co.uk portfolio builder is more advisable for a £100 trade since the fees are £1.50 per trade.

ozzage

1.5% is still very high. I would suggest you're better off saving a bit longer before going in.

You might also consider investing in funds. That way you get some diversity and can make monthly contributions of as little as £20 per month. Much safer than picking one share and going for it.

Doshwaster

ricll wrote: »

i don't think it's worthy spending less than £1,000 in shares because of the charges

Yes, absolutely right.

Trading costs are around £10-15 depending on who you use. That means with £100 in shares that your investment would have to increase by 20-30% before you would even get your money back.

A low cost alternative would be an index tracker inside an ISA which typically has fees of less than 1%. Put your £100 in there and then forget about it. You can then add any extra spare money whenever you have it - or setup a monthly standing order.

bagsacash

Well your hundred pound isn't much, granted, but if you intend investing your £100 for a long time then shares are the way to go, I think you would do well to invest it in shares rather than earn a crummy 2.5 to 3.5% interest in an isa. At the rate of 3.5% after 5 years the isa would have earned £17.5, assumming interest rated ramain at 3.5%

As for shares, after dealing costs,and stp duty you would have about £85 that would get you 303 shares of RBS at around 28p ps. Hold on to the shares for 5 years and they could be at £2 per share that would net you around £600 if you sold at that price. Then there is the dividend you might get once the bank starts making profits.

Then again the bank could collapse and you lose £100.

spalding

McSaver wrote: »

www.iii.co.uk portfolio builder is more advisable for a £100 trade since the fees are £1.50 per trade.

Would agree with McSaver with this or maybe Halifax who offer the same they ower iii anyway, then you could maybe add in time and still keeping costs down

bagsacash

www.iii.co.uk portfolio builder is more advisable for a £100 trade since the fees are £1.50 per trade.


Buying and selling shares requires timing and Portfolio builder does not allow one to buy or sell shares at the time they need to be bought or sold. By time the shares are bought using this method the share price could have moved significantly, the same is true for selling. Hence £1.50 per trade,

tradetime

bagsacash wrote: »

www.iii.co.uk portfolio builder is more advisable for a £100 trade since the fees are £1.50 per trade.


Buying and selling shares requires timing and Portfolio builder does not allow one to buy or sell shares at the time they need to be bought or sold. By time the shares are bought using this method the share price could have moved significantly, the same is true for selling. Hence £1.50 per trade,

For a long term investment strategy timing as imposed by that portfolio builder is not that important.

sabretoothtigger

bagsacash wrote: »

£85 that would get you 303 shares of RBS at around 28p ps. Hold on to the shares for 5 years and they could be at £2 per share that would net you around £600 if you sold at that price. Then there is the dividend you might get once the bank starts making profits.

Then again the bank could collapse and you lose £100.

Rbs was 2 pounds last august before further shares were issued and the government became 74% holder.
For them to recover to 2 pounds now would require a higher overall valuation then previously thought before the market crash, its unlikely to happen in 5 years or 10 even

Masomnia

sabretoothtigger wrote: »

Rbs was 2 pounds last august before further shares were issued and the government became 74% holder.
For them to recover to 2 pounds now would require a higher overall valuation then previously thought before the market crash, its unlikely to happen in 5 years or 10 even

Exactly. People look at previous share prices and look at 'recovery' in those terms, ignoring that the number of shares in issue has probably doubled since then. It will be a long, long time before prices such as those are reached again.