Stock market newbie, any advice?

AndiW_2

I have briefly looked into the stock Market before but don't know how to get started. I won't start until I am confident I know what I am doing, but I want to start as soon as possible. How do I buy and sell the shares, through a stock exchange? If so, what one would anyone recommend? And also, if I research the company's stock price history and buy low, they should eventually rise shouldn't they? If they are a solid business I mean. And how would i know if they are about to rise? (not asking for an easy answer here) I mean what do you research into to find how the price of the stocks is going to go?

And also how much money is the minimum you should really put down? Because I know if you put to little, fee's eat up your money.

I hope I have made some sense but as I am not too confident with understanding stock prices I am pretty useless and would really appreciate anybodys answers or input. Thanks.

jellygoodfellow

Your on the wrong forum .

Savings and Investments are here http://forums.moneysavingexpert.com/forumdisplay.php?f=17 your see a share dealing discussion area.:D

nehpets81

Or, if you find that post a bit daunting, I will try and answer a few of your Qs...

In order to start dealing you need a stock broker. Traditionally these have been people you phone up and then purchase your shares. If you are starting out, the easiest thing to do is probably to look for an online self trade platform - I'm with TD Waterhouse who allow you to trade on the UK exchange as well as a number of other big players around the world but I think Interactive Investor is another popular one, and they have a very interesting forum. It's very easy - once you are set up, buying and selling shares is done with a few clicks of a mouse. You can set up things like fill or kill orders which I have found very useful as you can specify the maximum you are willing to spend on each share and the broker will then do his best to fulfill this order - if he/she can't get this price the order will be cancelled.

As for the other question - well, if we knew when a share was going to rise we would all be millionnaires! If a company has good prospects and is well run then it is probably already priced accordingly. There will be bargains but there are many people paid a lot of money to seek these out and if they are all ignoring the share you think is a bargain, chances are you have missed something!

An important thing, in my opinion is to diversify your portfolio - that means not to have all your money in one company as if they go under you will be wiped out. It is also good to have a few different industries in your portfolio too. I would say about 6 companies is probably the minimum you would want to invest in. Also worth considering is that every time you make a trade, your broker will take a cut. This varies wildly per broker but will probably be about £10-£15 per trade. Therefore the higher value trade the more insignificant this becomes. Taking this into account you would probably want a minimum of £800 per trade. So... you could probably make a decent start with about £5K.

Finally, I am no expert but I have been trading for the past few years and find it quite enjoyable (if a bit stressful). I often don't understand why a share price is going up/down and the market seems to have a life of its own at times! Oh, and only invest money that if the worst happens you can afford to lose - if you have diversified well you shouldn't lose the lot but the values can obviously go down as well as up.

Good luck!

OldGreyFox

Daunting !!! The link given by Jelly leads to a lot of useful info eg http://forums.moneysavingexpert.com/showthread.html?p=572533

nehpets81

OldGreyFox wrote: »

Daunting !!! The link given by Jelly leads to a lot of useful info eg http://forums.moneysavingexpert.com/showthread.html?p=572533

Not wanting to be picky but the last poster doesn't seem to share your opinion of that thread...

Noktok wrote: »

It's a shame that this thread has never really tried to address the subject promised by its title. No beginner would be any wiser about how to think about buying and trading shares after reading through this lot.

Also, the main share sticky has 81 pages which I would say is a bit daunting for a beginner who has a few specific basic questions. The investment forum would be a more sensible place for this thread, though.