Share dealing accounts

Glen_Clark

melly1980 wrote: »

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.

If I wanted to put £4-5k in the markets I would put it all in an Investment Trust. Look for a discount to net asset value, so the management are a liability that is already priced into the shares.

melly1980

Blue22 wrote: »

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.

yeah this is one of the problems Ive been finding when looking. I want to spread risk but the fees will be a relatively high proportion of the total investment. In fact I was going to ask a question on it this morning and you have brought it up anyway

I was going down the track of narrowing down the amount of investments to reduce this cost but reducing the risk within them and then taking riskier investments when I have more money and experience. For instance IMO investments in large companies like Unilever, Tesco, Croda, LINDE and so on are companies that are unlikely to go bust and therefore any loss is short term rather than a complete bust.

More thinking to do me thinks!!! Cheers again for the replies.

melly1980

EdgEy wrote: »

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.

Absolutely, at the moment. But there is an element of if you want to become good at something then do it. Im not under any illusion that I'm going to be better than some big shot in the industry...what I am trying to focus on is getting into it, not losing everything and then gaining experience. Chucking into a fund doesnt do that, its just paying someone else to manage my money and then I never learn how they did it.
I realise that in pure investment terms lumping into one of these funds is probably the best option at the moment both due to inexperience and how much I can put in. I just dont think I will gain an understanding from it.

melly1980

EdgEy wrote: »

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'.

The reason that I was looking to individual companies is that currently the market as a whole is a little shaky and its fair to say a decent drop isnt an outragous prospect. But within that market will be companies or sectors that should perform well (or less bad) than the market as a whole due to what they do. This is what I want to (attempt to) judge. I understand that its more of a risk and your advice is most welcome...my mind isnt made up yet anyway

EdgEy wrote: »

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/

cheers

gadgetmind

EdgEy wrote: »

MI 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'.

I'd usually agree, but with (in my case) two exceptions.
1) I've been good at spotting technologie companies with "the right stuff" to be successful. None of them can be called "dot com", which is very deliberate!
2) I've also been buying shares in solid dividend payers on the market's "bad hair days" over the summer.

Of course, the core of my holdings is low cost trackers and bonds.

melly1980

gadgetmind wrote: »

I'd usually agree, but with (in my case) two exceptions.
1) I've been good at spotting technologies companies with "the right stuff" to be successful. None of them can be called "dot com", which is very deliberate!
2) I've also been buying shares in solid dividend payers on the market's "bad hair days" over the summer.

Of course, the core of my holdings is low cost trackers and bonds.

so what your saying is let your lower risk, higher volume stuff be managed / locked into a fund and then look around for the odd opportunity where you can take a calculated gamble yourself with relatively smaller sums?

gadgetmind

melly1980 wrote: »

so what your saying is let your lower risk, higher volume stuff be managed / locked into a fund

Mainly low cost trackers, but yes.

and then look around for the odd opportunity where you can take a calculated gamble yourself with relatively smaller sums?

I have a watch list of (hopefully!) reliable dividend payers in sectors to which I'm underweight and I keep a regular eye on the price and news flow for these. The market has good days and it has bad days. On the bad days, I work down my list and see what's looking over-sold.

I've also bought some pretty big holdings in a few technology companies, which were totally out of favour when I bought them, but are now getting tipped by everyone and his dog. I'm selling as fast as capital gain allowances let me, and am even paying 18% tax on some of it. 28% seems like too much, but I might even cough up that if necessary.

My approach is often called "core and satellite", but in my case, some of the satellites have out-grown the core!

melly1980

gadgetmind wrote: »

Mainly low cost trackers, but yes.



I have a watch list of (hopefully!) reliable dividend payers in sectors to which I'm underweight and I keep a regular eye on the price and news flow for these. The market has good days and it has bad days. On the bad days, I work down my list and see what's looking over-sold.

I've also bought some pretty big holdings in a few technology companies, which were totally out of favour when I bought them, but are now getting tipped by everyone and his dog. I'm selling as fast as capital gain allowances let me, and am even paying 18% tax on some of it. 28% seems like too much, but I might even cough up that if necessary.

My approach is often called "core and satellite", but in my case, some of the satellites have out-grown the core!

So an equivalent for me with my 5K would be 4K into a tracker when I thought the time was right (not convinced that this is now...thinking more in a few months) and then hold 1K, study the markets and companies and chuck that into 1 or 2 investments that I felt confident about.

gadgetmind wrote: »

The market has good days and it has bad days. On the bad days, I work down my list and see what's looking over-sold.!

With this are we talking about the likes of technical assessments....RSI, Stoch RSI etc etc? this is what Im looking at at the moment, trying to understand these concepts and combining them with other indicators.
Problem is that they are like anything else, you need a feel and understanding of them based on reality which will undoubtedly cost me via some mistakes

gadgetmind

melly1980 wrote: »

So an equivalent for me with my 5K would be 4K into a tracker when I thought the time was right (not convinced that this is now...thinking more in a few months) and then hold 1K, study the markets and companies and chuck that into 1 or 2 investments that I felt confident about.

I've usually seen "core and satellite" used to describe a core of trackers with more active investing into those areas that the trackers aren't covering, such as emerging markets and/or property and/or small caps. Of course, there are now trackers for the latter three. I do hold some small cap and EM trackers, but for property, I'm more inclined to filter REITs based on gearing as I think this will be critical for the next few years.

However, with £5k, you won't have much leeway for stock picking, and might be better going for a core active fund, IT or a tracker such as Vanguard Lifestrategy, which is a balanced portfolio in a single tracker.

With this are we talking about the likes of technical assessments....RSI, Stoch RSI etc etc?

I've never really been one for using chicken entrails as part of my investment decision making.

I prefer to look for well run companies, with strong products, an established/credible route to market, and plenty of "growing room". I like to buy at a good price but there's no point in waiting forever in the hope of hitting the bottom.

When I've deviated from this, and even let the enthusiasm of others infect me, is when it's tended to go wrong.

melly1980

gadgetmind wrote: »

.
I've never really been one for using chicken entrails as part of my investment decision making.

I prefer to look for well run companies, with strong products, an established/credible route to market, and plenty of "growing room". I like to buy at a good price but there's no point in waiting forever in the hope of hitting the bottom.

When I've deviated from this, and even let the enthusiasm of others infect me, is when it's tended to go wrong.

old fuddy duddy :rotfl: