Shares - Laymans terms

Katnipp

Hello,

I have a small amount of money (£100) that I wanted to use to 'experiment' in shares.

Is this a very foolish time to do so? Is it unlikely to make any profit? Should I stick it in savings instead?

And keeping it very simple - how does it all work?

Thanks!

debbie42

£100 isn't enough to warrant purchasing "real" shares. The overheads (dealing charges, spreads, stamp duty) would mean that the share would have to increase in value by a very large percentage beforeyou stood to break even, let alone make a profit.

Katnipp

What should I do with my little bit then?

I already have an ISA, where I've got savings as Instant Access as I'm saving for a mortgage, but I wanted to 'branch out' into some long term saving

sciencegeek

I would suggest saving your 100 for now because as the previous poster rightly said the dealing charges make this kind of amount unecconomical.

In the meantime, open an account with a stockbroker of your choice (you dont have to pay) and this will allow you to 'play' the stockmarket using fake money.

You obviously wont make any profits (or losses) doing this but it will enable you to get an idea of how the stockmarket works and allow you to practice researching a company before you decide to invest in it.

Once you have saved a bit more you should have a pretty good idea if you you still think the stockmarket is the type of investment for you.

G_M

National Lottery tickets?

Nah. Money down the drain.

Premium bonds. At least you get to keep your £100, and as Sciencegeek says "Once you have saved a bit more you should have a pretty good idea if you you still think the stockmarket is the type of investment for you."

OK OK I know! Premium bonds offer hopeless returns, but there's always that tiiiiiny chance....

Masomnia

G_M wrote: »

Nah. Money down the drain.

Premium bonds. At least you get to keep your £100, and as Sciencegeek says "Once you have saved a bit more you should have a pretty good idea if you you still think the stockmarket is the type of investment for you."

OK OK I know! Premium bonds offer hopeless returns, but there's always that tiiiiiny chance....

Better than no chance... and I think I'd rather have that tiny chance to win a million than £2.50 after a year.

dudes_2

You could try spread betting if you want to play with shares

mr_fishbulb

Why don't you use some of the £100 to buy a dummies guide type book to investing?

mrposhman

dudes wrote: »

You could try spread betting if you want to play with shares

Not exactly the greatest advice I've ever seen on here to someone thats clearly not really been involved in the market in the past.

Ignore this "advice" from dudes, spreadbetting is not for rookie investors and not the way to learn about the market imo.

sciencegeek

if you do decide to look at spreadbetting always remember the 3 most important things

1) stoploss
2) stoploss
3) stoploss

if you dont know what a stoploss is yet you are not ready to hit the spreadbetting market yet.

sabretoothtigger

A regular sharebuilder would allow purchase of shares for a few pounds, that might be possible

100 isnt enough for spreadbetting unless you are right every time right on time, unlikely or you get a trial account that will allow tenths of a share which is the same as buying 10 shares I think