Share dealing accounts

melly1980

A novice here so stick with me.

I am looking into opening up a share dealing account. At the moment I dont know a huge amount of detail regarding investments and I will read into it for a while before taking the plunge. The attitude Im taking at the moment is to have x amount of safe savings and then treat the rest as "money I can lose". naturally, I wont invest more than I can afford to.

Now onto the questions.

Any recommended literature that people can advise on?

Any recommended share dealing sites? At the moment Im judging on cost per trade but logic tells me that this is a simplistic way to look at it. Which sites are reputable?

One thing that I would look into is investing in the likes of gold / silver as well as shares. Can this be done via a shares trading account or are there separate accounts to set up to deal in these (I understand that you can trade in products linked to gold in a shares trading account)

Any other advice that people have?

Cheers in advance for any replies.

Ifts

Some books here that will help you get some knowledge of investing:
The Intelligent Investor (by Benjamin Graham)
Naked Trader (Robert Burns)
Smarter Investing (Tim Hale)

Don't rush into things. Read up and learn as much as you can before you part with any money.

When you think you are ready to have a go at trading you can try out your strategy by having 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.
Bear in mind that a practice account does just that, it gives you an idea how things operate, but its very different in reality when you're staking real money, emotions etc.

Always do your own homework/research. Only invest money that you can afford to lose, should the worse happen.

Share Dealing sites I use are: http://www.x-o.co.uk/ (£5.95 a trade)
and also: https://www.share.com/a/index.html

The Motley Fool site is good place for information regarding shares: http://www.fool.co.uk/

Good luck.

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

melly1980

cheers for that.

Just a couple more quick questions if you dont mind.

1) You mention practice accounts and these are something I had thought about. Ive ignored these because I see playing the stock markets as something that you do over several years. I can hardly practice for several years nor could I practice for a few months, gain / lose then assume over a short times scale that I know/ dont know what im doing. What is the idea of them then? Is it just to get practiced at how to do stuff?

2) I noticed on one of the links that you gave there was questions and answers. One was regarding AIM shares and how they couldnt be held in an Shares ISA account. Is that a generic rule regarding AIM shares or specific to that site?

3) Since you can have ISA accounts and none ISA accounts why would you chose the none ISA account? Is it a case of you move onto the none ISA account when you have used up all your ISA limit (hence you should start with an ISA account) or is it just to do with what markets you can trade in (as per question 2 above?).

cheers for any replies

Lokolo

1) Yes they are mainly for day traders but you can practice and get used to buying prices, selling, dividends. Longterm practice they are a little pointless though.

2) AIM shares cannot be put into an ISA as a rule. However, some companies are cross market and if the other market they are on can be in an ISA, then you buy those shares.

3) Some providers charge extra for ISA accounts and this cost doesn't make it worthwhile (for small holders) as the benefits won't outweigh the cost.

SAHD_Jim

1) It is good to get a feel for doing things before you actually press the button in a live setting, but you can't feasibly practice for as long as is needed as suggested. Also it depends on your trading timeline - ie how long you plan to hold shares. In current volatility it is possible to hold certain shares (miners, financials etc) for a matter of days or weeks and make significant (10-20%) gains (or losses!). This is higher risk, higher reward. If you are going to just buy and hold defensive stocks (Pharmaceuticals etc) then that would be different again. Even if you don't actually practice, it is worth signing up to free live streaming via ADVFN or MoneyAM and watch how your target shares act/react over a period of time.

2) AIM shares cannot be held in an ISA, full stop. Unless they are dual listed, you can't have them.

3) Why would someone have a non ISA account?

a) to have access to AIM shares and other vehicles not available in an ISA (like CFDs)
b) if they have surplus cash and have no ISA allowance left
c) if they are a basic rate payer and doubt they'll exceed the CGT threshold in the year
d) to utlise the ISA allowance in some other way (such as transferring exercised share options from an employer into an ISA).

psychic_teabag

Perhaps a stupid question, but is anyone offering any sort of market replay service where you can rerun historical price data at an accelerated rate ? So you practise trading on long timescales without having to actually wait years to see what would have happened.

That said, I have heard it said that the market is fractal in nature, and behaves the same on all time scales. (Which I guess would be the case if it was genuinely a random walk.) So a strategy developed on a short timescale should still work on long timescales (but with correspondingly lower costs).

Masomnia

I reckon the best way to really get a feel for it is through funds. Same principles, but with the risk spread and you can invest smaller amounts.

On the gold and silver thing, you can get exposure to the through ETFs, which any broker should do. Not for the beginner though, by any means.

melly1980

SAHD_Jim wrote: »

1) It is good to get a feel for doing things before you actually press the button in a live setting, but you can't feasibly practice for as long as is needed as suggested. Also it depends on your trading timeline - ie how long you plan to hold shares. In current volatility it is possible to hold certain shares (miners, financials etc) for a matter of days or weeks and make significant (10-20%) gains (or losses!). This is higher risk, higher reward. If you are going to just buy and hold defensive stocks (Pharmaceuticals etc) then that would be different again. Even if you don't actually practice, it is worth signing up to free live streaming via ADVFN or MoneyAM and watch how your target shares act/react over a period of time.
).

Cheers for that and to lokolo too :beer:

What I was planning was as follows (subject to learning more on the subject).

Taking what is a relatively small some in shares investing terms like 4 - 5K in the full knowledge that I could lose some of it / most of it. Currently, with my limited knowledge, where i would put it is as follows.

1000 - 1500 in gold on an immediate basis.
500 - 750 in lower end investments including some riskier ones like mining etc. Within this money I have Lloyds TSB shares in mind as well at 20 odd p per share with a view to holding on for a few years. The attitude with this portion of money is to look for low stuff that cant really go too much lower other than bust and accept that as a risk
The remainder I would want in what I think will be safe bets. Larger companies who can rise out storms and less linked to economic downturns. At the moment I know my current company is doing well so would put some there (no names mentioned), energy firms, the likes of TESCO, Unillever and companies of that ilk.

This is where im at, I dont know how good that sounds but ATM my gut feeling is that I have to get the spread right to minimise risk.

Once again cheers all.

melly1980

Masomnia wrote: »

On the gold and silver thing, you can get exposure to the through ETFs, which any broker should do. Not for the beginner though, by any means.

I read into that and there seemed to be many warnings about funds that are linked to these commodities, hidden charges and many things that can catch you out. I was thinking more along the lines of registering with a trading site for gold which has its own fees, buying a quantity with a target sell point in mind.

The logic here was a short(ish) term investment in something that will never be worth nothing at all and should perform well when currency etc is poor. That may be a misunderstanding on my part, feel free to correct me.

gadgetmind

melly1980 wrote: »

1000 - 1500 in gold on an immediate basis.

Not my bag, but each to their own.

500 - 750 in lower end investments including some riskier ones like mining etc. Within this money I have Lloyds TSB shares in mind as well at 20 odd p per share with a view to holding on for a few years.

The miners are on pretty low valuations right now and Lloyds is a decent recovery play. The major risks with Lloyds are full nationalisation or massive dilution.

I hold a chunk of BHP Billiton (bought at about £17) and some Lloyds on an average of mid-30s.

The attitude with this portion of money is to look for low stuff that cant really go too much lower other than bust and accept that as a risk

Rather than looking for low share prices per se look for value. Of course, everyone else is also looking for value ...

Larger companies who can rise out storms and less linked to economic downturns. At the moment I know my current company is doing well so would put some there (no names mentioned), energy firms, the likes of TESCO, Unillever and companies of that ilk.

The Motley Fool High Yield Practical board might be a good starting place.

This is where im at, I dont know how good that sounds but ATM my gut feeling is that I have to get the spread right to minimise risk.

You might like to consider some bonds and/or property in that portfolio for diversification. Reading some of the books recommended by the first reple, particularly Hale, will tell you why you need this.

melly1980

cheers all for the advice, I now have my practice account and will mess with this for 3 - 4 months before doing anything proper. (gives the market time to plummet early next year too )

Anyhow, more questions.....

1) When it comes to depositing cash can I hold it as that in an ISA and then deal with it. For example will I have a portfolio that say starts with 5K cash that I can hold as 5K cash, leave it exactly as it is then trade when I fancy it.

2) If so, how safe is that cash. Are these trading sites safe as such or am I safer with opening up with a bank such as Lloyds or Halifax for security (ironic I know...but your savings are backed in these).

3) my revised plan is as follows.

Split my money up into what I am prepared to risk....ie 80% of larger and more secure companies spreading across sectors and judging it (as best as I can) off company data. - leave these in for the long haul 20% of more risky investments that are sought by looking at shorter term market data on them and tips from investment mags / internet. As a general rule of thumb - trade as few times as possible Dont trade until at least Q1 passed next year due to uncertainty

how does this sound up to now?