Halifax ShareBuilder advice - do you use it?

Doomcow

take it the £5 to sell up to £250 means that £5 to £250 total you get back? hmm

all a bit confusing.. mind you £13 to buy & sell doesnt sound too steep? what about this stamp duty / CGT? hows that work?

Loughton_Monkey

You have every right to do what you're doing. But it seems rather a strange strategy - having only just come out of CC and OD debts (well done) and then to put half your money into volatile shares - with a 'plan' to sell them in a year or so. Even if they have plummeted?

Share dealing costs. Bid/offer spread. Stamp duty. Huge risk per single company compared to well spread risk in funds.... These are all reasons why most of us who have built up 'our pile' would not do this, until we have a hell of a lot more locked away in cash and funds - preferably in a tax free environment.

Up to you, though.

Theyarv1

as Loughton say, obviously it's up to you and there have been a number of other good posts on the topic.

Personally, I would try and work out what a minimum investment would have to be for me given the costs, and work out a long term view of what i wanted to do.

For instance, if i was happy to buy just 1 or 2 shares over a year, i think i could convince myself to buy in £250 chunks (so perhaps every 2-3 months for you). This would mean that out of £250, £1.50 goes to the buy, and £1.25 to stamp duty. This makes up just over 1% of your purchase amount (ignoring spread). Say you did this 4 times in a single share, and then sell (£10), you would have total costs of £21 on your £1k investment. This means that to break even your shares will have had to have risen 2.1% in one year from the offer to the bid (so probably more like 2.2%).
If however you were going to put in £100 into 12 different companies over the year, you would likely run into trouble. Your buying costs would now be 12*£1.5 + 12*0.5 (stamp duty) = £24, but your sell costs would now be £120. So out of £1200 invested, you would have costs of 144, which is over 10%. I would personally not view this as worthwhile.

Personally I would only do this first strategy if i was happy to hold these shares for a minimum of 2 years, and potentially longer. Having said that, all my strategies are about long term holdings since I don't like trading. I would not even consider the 2nd option.

Good luck in whatever you decide

slapmatt

I thought the idea was that you should make small investments simultaneously?

So for example, if I had £100 to invest and I wanted to buy shares in M&S, Sainsbury’s, HSBC and Ted Baker each month - would I pay £6 (4*£1.50) a month or simply £1.50?

Theyarv1

you would pay £6

edinburgher

For what it's worth, paying off debts doesn't really sit well with the 'fun' of stock picking unless you really know what you're doing (which, as someone who's obviously knows they're new to investing you probably don't fully)

Personally, paying back debts early is simply a case of putting a set amount of cash aside each month via DD into an account that will dissuade you from spending it before term (for example, a one year regular saver or a 'Christmas' type account that penalises withdrawals before 11/12 months). There are plenty of fun enough ways to try and make (cash) saving more enjoyable - the Debt Free Wannabe board is chock full of advice. It's a fairly dull process, but strikes me as one of those life things that you just have to suck up and stick with. Before you think I'm just being a rude sod, I paid off £7-8k of unsecured student debts fairly recently.

Trying to invest over a period as short as one year just sounds like you're trying to 'game the system' and the odds are stacked against you making any money. Still, it's entirely your choice - best of luck with whatever you decide

uptomyeyeballs

I'm currently making regular purchases every month through the Halifax S&S ISA. I'm investing £100 a time, and that costs £1.50 plus Stamp Duty (if it's due). All you need to do is pick

a) Regular funding date
b) Investment date
c) Shares to buy

You can change these at any time within the confines of the account, and it keeps track of how much ISA allowance you still have in the current tax year.