So, with savings so low...

chucky

Graham_Devon wrote: »

However, in terms of where I was coming from, leaving £1k in a savings account would have returned about £25 over an entire year.

that wasn't a criticism of what you were doing more of my hesitency to trade a higher amount.

i'll give you an example that happens to me more than once.

i always buy Gem Diamonds when it hits just under 190ish.
i always sell when it hits 250 - that's usually about 30% profit each time, i've done it twice this year.

each time i've done £3k, i always say to myself i should have done £10k. but the risk factor gets the better of me each time.

JonnyBravo

chucky wrote: »

each time i've done £3k, i always say to myself i should have done £10k. but the risk factor gets the better of me each time.

now where did i put that time machine? i know i left it somewhere safe

chucky

JonnyBravo wrote: »

now where did i put that time machine? i know i left it somewhere safe

even when i'm clicking the buy button it's a question i ask myself.

but any profit is a good profit.

crux

I finally decided that people are correct about splitting too low an amount over a number of shares. I'm now out of OTC and fully in HER with my 1k at an average after costs of 2.56p (it's a higher ave price than I would like due to dealing fees but that's a lesson learned). I'll hold HER through 2011 and see where we are by then.

If I buy another company's shares it will be with a full 1k at least.

JonnyBravo

chucky wrote: »

OTC had a nice little bump today...

More bumping today, with nice gains for HER (so crux isn't kicking himself ;-) ) and more for XTR too.

Graham_Devon

I bought into HER @ 3.16 average cost.

Was the last of the money in my account, was gonna be sensible, but the sensible ones are boring

AMC did well today too, annoying hold the least with them!

I'm into profit territory now anyway, which is nice.

julieq

With that amount, if no-one has said this already (not read the entire thread), you should be spreadbetting, not day trading. For one thing you stop paying transaction charges and stamp duty, for another you'll probably find some free money introductory offers. And you can still be earning interest on most of your capital, you only need to fund the margins. You'd be lucky to come out ahead on real trading because the charges would more than wipe out the gains.

But the more general point is this: there is a continuum of risk. Savings are at the safe end, stocks and shares are right at the other, but for some reason people seem to assume that they are the only two options. There are lower risk options which can give better returns than saving. See an IFA.

Back to shares though, the risk of ruin increases the less diverse your portfolio is, and you can assume that the market in general is better informed than you (able to move faster to pick off value or to sell when things go bad). Entering any market without detailed knowledge of what you're doing is only a winning strategy if the market as a whole is ramping, and on an individual share basis you'd really better know what you're doing. One profits warning and you're dead.

It's a truism that winners shout louder than losers, and that's particularly true for day traders and amateur investors. Rather than targeting big capital gains, you should be accepting some wins and some losses and aiming for an average of 7-8% ROI. And you should be researching carefully the companies you're investing in (or going for a tracker ISA which spreads the risk over companies likely to be successful because they're in a list of successful companies, or going for other forms of investment which are less volatile).

Looking at the business environment for next year, you can see a fragile recovery and overexuberant equity markets leading up to a very tenuous FTSE close over 6000. I would be very cautious indeed about stocks and shares until there's a clearer situation, particularly as regards the Eurozone.

julieq

Just read through the rest of the thread.

There's another point which I think Gen made, but it wasn't sustained. Success in any risky endeavour is largely a measure of ability to marginally increase the chances of favourable outcomes relative to those who competing against you. In practical terms that is about taking sensible, rational and unemotional decisions quickly.

What has characterised bear discourse in general, and Graham in particular, is emotional and often confused response to (for example) news reports and an inability to get directly down to underlying data. This means that the judgements made are less than optimum, and over a period of time are wildly inaccurate. What's worse is that correct assessments - and Hamish I'm afraid has been spot on throughout this - are summarily rejected just on the basis of who is making them, and incorrect ones accepted for similar reasons. To succeed long term investing, you have to dump what you'd like to believe and get down to what is actually true.

Of course it is possible to make money investing without skill, just as people have made money from property in recent years or made money on the stock markets leading up to 2000 (where is Mrs Cohen these days?), because the underlying market is ramping. That can lead to exaggerated self belief and overstretching which is very dangerous indeed. If you have even exposure to a ramping market you will make money, but you are just following the tide. Even so, as you reduce the number of individual companies in your portfolio, you increase your risk of ruin, because the risks are no longer spread evenly over the whole market and one event can be catastrophic. If the tide goes out as a whole then you will lose money almost regardless unless you've anticipated that it's going to turn.

JonnyBravo

More OTC, HER, XTR rises.
EMED joining the party :-)

:j <-- me and possibly even "woe is the world" Graham

Graham_Devon

JonnyBravo wrote: »

More OTC, HER, XTR rises.
EMED joining the party :-)

:j <-- me and possibly even "woe is the world" Graham

LOL. Not sure what's going on really, but I'm certainly not complaining.

Just hovering under 100% profit on one share (AMC).

XTR is now 60% profit.

HER 20% profit.

And the boring ones, Tesco is around 0.87% profit, BP down 8%, BT down 5%.

Made far more than I could in a savings account anyway, lets put it that way. Just wondering whether to sell out of AMC for now and put that money elsewhere. Surely have to see some falls from these highs. They are not even on the back of any news.