Should i buy Lloyds and Barclays shares?

ckyuen

I have got around £20k to invest, and I'm seeing Lloyds and Barclays share prices are fairly low at the moment, I do not have experience in the stock market so I would like to hear your thoughts?

Also, whats the easiest and cheapest way to buy shares?

Thanks!

Sceptic001

There is a near-identical thread here:
https://forums.moneysavingexpert.com/discussion/3287194

grizzly1911

Whatever you do spread your investment unless you are willing to lose it. It needs to be a wider than just Banks and it needs to be wider than equities.

But if you have the money to gamble

Barclays are still independent(ish) so will have more flexibility in the short/ medium term over what they do.

I have held them for over 30 years and up until 2007 had always recovered any dips and paid a reasonable dividend.

They have struggled since 2008 and I am not so sure they will recover any time soon.

LLoyds just have so much baggage to sort out, but it is so low it might be worth a long term punt, the Government will want to offload as soon as they can.

Just my opinions. I am stuck with both.

vax2002

Buy GOLD.
The world money.

gadgetmind

ckyuen wrote: »

Also, whats the easiest and cheapest way to buy shares?

With a low cost dealing service in a stocks and shares ISA wrapper. iii and Halifax both have portfolio building services that let you buy at £1.50 a trade. You'll still have 0.5% stamp duty to pay.

We know nothing about your other assets. Ideally you need to spread investments between cash, bonds, property and equities. Within equities, you also need to ensure you have a good sector/territory spread.

Everything into banks would be rather daring to say the least. I recently bought a few k of bank shares (but preference shares rather than ordinaries) but this represents only about 1% of my portfolio, so I can still sleep soundly despite the PIGS.

Tammer

Hi OP,

Just remember that holding all your investments in one company or 2 companies is one of the most 'risky' things you can do.

Remember that RBS was 'the world's most profitable bank' only a few years before it almost went bust - shareholders would have lost everything, and have lost a lot.

You're right that those companies look cheap now. But so do lots of others so why not invest in a fund that invests in dozens of companies from a number of different countries thereby spreading your risk?

ckyuen

Thanks for the replies guys.

The banking share prices are so low now, and I noticed the trends of going up and down at least 1/3 of its price in a number of occasions during the past 2 years therefore I thought this is a good opportunity to invest in as a short term (within a year) investment - anyone agree?

I understand the need to spread my investment wider, but my knowledge in the stock market is so limited therefore I would like to hear your advise in what markets/companies should I be investing in at this current time?

grizzly1911

Tammer wrote: »

Hi OP,

Just remember that holding all your investments in one company or 2 companies is one of the most 'risky' things you can do.

Remember that RBS was 'the world's most profitable bank' only a few years before it almost went bust - shareholders would have lost everything, and have lost a lot.

You're right that those companies look cheap now. But so do lots of others so why not invest in a fund that invests in dozens of companies from a number of different countries thereby spreading your risk?

A downside to th efunds is of course that hte management charges can eat into your returns.Or maybe the half dozen funds managers are all bad:(

grizzly1911

gadgetmind wrote: »

With a low cost dealing service in a stocks and shares ISA wrapper. iii and Halifax both have portfolio building services that let you buy at £1.50 a trade. You'll still have 0.5% stamp duty to pay.

Is there any ongoing management fees with these over and abovethe trade fee?

opinions4u

ckyuen wrote: »

I thought this is a good opportunity to invest in as a short term (within a year) investment - anyone agree?

Bunging cash in to one or two shares is speculation bordering on gambling. It isn't investment.

Both LBG and RBS are exposed to the Irish economy. If the Greeks default the Irish won't be far behind. LBG has Australian exposure - the Aussies look like being a couple of years behind our recession.

RBS is well over 80% state owned. It wouldn't take too much for that to turn in to 100%. If that happens your "investment" becomes worthless.

The shares of these 2 banks are at historic lows because they messed up big time. While there will be short term fluctuations in their share prices any recovery will be slow.

Any return to 2007 levels is completely out of the question. There is nothing to suggest that the sector has growth potential. Any bank that returns to the business model of reliance on the wholesale funding markets is basically waiting for it's next collapse and bailout. Indeed, at present both banks are trying to shrink their balance sheets.

So yes, if you do pile in you might win and you might lose. But based on what you've posted you might as well go to the casino.

If you really want to invest start researching funds which spread the risks across hundreds of different shares and sectors - and start thinking 10 years not 10 months. I'm not promising that you'll be a millionaire next month, but finding a broader investment base than 2 banks with major disabilities is where I'd start. Utilising your ISA allowance.

Ifts

ckyuen wrote: »

I do not have experience in the stock market so I would like to hear your thoughts?

Just a thought.....

You could always have a practice first without committing real money, try it for a while and see if its something that you think you could be good at.

Here is the link for the Share Centre*: Practice trading shares with FREE practice account, you will have to register but its free.

Once you have registered you will have access to advice to help you get started and research tools so you can learn more about the market.

*I'm sure there are other companies that offer practice accounts too.