Share dealing accounts

Glen_Clark

Ifts wrote: »

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
.

I have found brokers start up like that, low rates to get you to sign up to their scheme. They invariably try to talk you out of a certificated account, or even refuse to give you your share certificates altogether, insisting they hold them for you.
Then they hold your money on deposit at a crap rate, and keep your shares in their nominee account. For which they charge you an ever rising quarterly fee, and even charge you to take your own shares out.
I use Skipton. You pay 0.75% to trade which is more than these brokers. But you only pay them once. You pay with a debit card so they don't hold your money at their crap rates. You get the share certificates yourself so the broker has no further hold on you. No quarterly charges. No exit charges. And you hold the certificates yourself, so you know the shares exist, not part of some Madoff scam. When the broker puts their rates up you can easily go somewhere else, without any exit charge. http://www.skipton.co.uk/savings_and_investments/sharedealing/

As an added bonus you can vote on company matters yourself, instead of some overpaid fund manager casting your vote on executive remuneration for you.

Masomnia

melly1980 wrote: »

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.

You can, but you're not supposed to hold too much of it there for too long in case they think you're just sheltering the cash from the taxman and not using the account for its intended purpose. I'm not sure what, if any, the hard and fast rule is.

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).

Usual FSCS should apply but check with the individual broker, usual caveats about different banks being part of the same institution etc.

Ifts

Glen_Clark wrote: »

I have found brokers start up like that, low rates to get you to sign up to their scheme.

Ive been with the Share Centre for many years now and they have kept their prices low (only slight increase I think due to vat going up), as for X-O Ive only been using them for a short while and must say the service is great so far, easy to pay money in with debit card if needed, phone calls/email queries answered promptly.

Even if the brokers don't offer any interest on cash balances, I do like to keep money in my share dealing account to snap up any bargains if the opportunity arises like in August this year when the stock market sale was on!

As for the low rates just to sign you up, I tend to vote with my feet if they rise their prices too much as I do with any financial institution that does not have any customer loyalty and increases their fees too much or decreases the rates they pay you for cash on deposit.

The way I look at it is, no point moaning, just move my business elsewhere!

Derivative

My advice would be to buy a cheap FTSE tracker fund and start reading.

The more books you read, the less you will think you understand about investing. That's the point - developing your sense of risk awareness.

http://en.wikipedia.org/wiki/Gambler%27s_ruin

I don't want to dissuade you, because being in control of your own finances and picking your destiny as it were can be very empowering. But you are jumping in at the deep end, picking random stocks.

Glen_Clark

Ifts wrote: »

The way I look at it is, no point moaning, just move my business elsewhere!

I can do that instantly and at no cost with my certificated account. Might not be so easy with a nominee account?

I keep money in a Santander online Account earning 3.1%, which I can instantly transfer to my current account online and pay for shares immediately with debit card. Or transfer up to £10,000 daily from my Tesco online account earning 2.9%, on fast transfer (about 2 minutes) to my current account and pay it out immediately with my debit card. So I don't need to leave money with the Stockbroker. I can always get the money ready within minutes.

sheffield_lad

I have lots of fun with the AIM shares and some can be held in an ISA account this site

http://www.hl.co.uk/shares will show you which can and can't quite useful.

My own pot is in small/mid AIM miners. Made a mint in 2010 but lost said same mint during this year but current valuations are low giving any new investor good value.

Check out http://www.LSE.co.uk bb but easy to use and you will pick up some good info from posters on there but always DYOR

GL

Ifts

Glen_Clark wrote: »

I can do that instantly and at no cost with my certificated account. Might not be so easy with a nominee account?

Correct, you are right its not as easy with a nominee account moving out your stock to another broker (costs involved to transfer each stock out), but touch wood Ive never needed to do it.

I'm happy where I am with the Share Centre and X-O.

melly1980

EdgEy wrote: »

I don't want to dissuade you, because being in control of your own finances and picking your destiny as it were can be very empowering. But you are jumping in at the deep end, picking random stocks.

I dont intend on picking random stocks and I cant see how Ive created that impression.

I intend on studying the markets for as long as possible before taking the plunge but at the end of the day you have to take the plunge sometime. You cant keep reading or theorising.

Blue22

melly1980 wrote: »

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.

Hi Melly

My two pence worth is....its good to have diversity within any investment portfolio but its not cost effective to do that with only 4/5K. If you split this amount amongst several shares and some gold as well, then you would probably find you will lose 10-15% the minute you buy, taking into consideration, spreads, dealing charges and stamp duty.

I'd agree with the others who have suggested you look at funds if you want that diversity.

Derivative

melly1980 wrote: »

I dont intend on picking random stocks and I cant see how Ive created that impression.

I intend on studying the markets for as long as possible before taking the plunge but at the end of the day you have to take the plunge sometime. You cant keep reading or theorising.

My point is that your carefully crafted choices, no matter how well thought out, may be as good as throwing darts at a board.

Without sounding condescending, do you think you're better at pricing securities than us? (Us, being everyone else who invests in markets - hedge funds, major banks, pension funds, little investors like me and you...) I certainly don't.

My two pence worth is....its good to have diversity within any investment portfolio but its not cost effective to do that with only 4/5K. If you split this amount amongst several shares and some gold as well, then you would probably find you will lose 10-15% the minute you buy, taking into consideration, spreads, dealing charges and stamp duty.

And in addition to what I've already said, there are the frictional costs. You not only have to beat the market, you have to beat it and beat dealing fees. Index funds charge less than 0.5% a year - stamp duty and XO's £6 fee is 1.2% in year 1 of a £1000 stock purchase.

I don't think investing in the equity market is a bad idea by any means. It offers unparalleled opportunity for return. I just feel it's silly to invest in individual companies - you're essentially relying on spotting something others didn't. There are a lot of 'others' spending millions trying to find these 'inefficiencies'.

Some recommended reading:
On markets being efficient and a mutual index fund being the best plan:
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393081435/

On markets being inefficient and exploiting mispricing:
http://www.amazon.com/Quants-Whizzes-Conquered-Street-Destroyed/dp/0307453375/