Beginner Investor - advice please

pqrdef

There's no proper market in RBS shares because the government owns 5 out of 6, so their future value depends entirely on what the government feels like doing. Why haven't the shares been suspended?

gh05

pqrdef wrote: »

There's no proper market in RBS shares because the government owns 5 out of 6, so their future value depends entirely on what the government feels like doing. Why haven't the shares been suspended?

Would you say this is a bad thing for investors - or is the relative stability (minus the obvious risks) a good thing? Buy and sell a few times as it fluctuates within it's 200-260p range and yout have made more than you can lose (as long as you don't get greedy), no?

pqrdef

gh05 wrote: »

Buy and sell a few times as it fluctuates within it's 200-260p range and yout have made more than you can lose (as long as you don't get greedy), no?

That's what people thought when they bought Lloyds at 60p. Well it hadn't gone lower, until it did.

Personally, I think the RBS boat has sailed because of the consolidation. Psychologically, 200p shares don't behave the same as 20p shares.

grey_gym_sock

gh05 wrote: »

Surely, where there is this fluctuation then there is a way to make money if you buy and sell at the right times.

you don't appear to understand the risks.

try writing down exactly what your trading strategy is. do you have a target price at (or above) which you'll definitely sell? and are there any circumstances at which you'll sell for a lower price? if so, what are they, precisely?

if there are no circumstances at which you'd sell for a lower price, then it's possible you'll never sell them. or that you'll only sell them in (say) 10 years' time, when your target price is worth much less after inflation, and you'd have made more money in a deposit account.

it's all very well saying you could sell out before any full nationalization. but would you? what if the shares fell 50% and there were rumours that the bank might be nationalized. but of course it might not happen. so do you sell or not?

gh05

pqrdef wrote: »

Personally, I think the RBS boat has sailed because of the consolidation. Psychologically, 200p shares don't behave the same as 20p shares.

Why would that be? Somebody I know said the same thing hence my question - I just don't see how things are any different after the consolidation?

gh05

grey_gym_sock wrote: »

you don't appear to understand the risks.

try writing down exactly what your trading strategy is. do you have a target price at (or above) which you'll definitely sell? and are there any circumstances at which you'll sell for a lower price? if so, what are they, precisely?

if there are no circumstances at which you'd sell for a lower price, then it's possible you'll never sell them. or that you'll only sell them in (say) 10 years' time, when your target price is worth much less after inflation, and you'd have made more money in a deposit account.

it's all very well saying you could sell out before any full nationalization. but would you? what if the shares fell 50% and there were rumours that the bank might be nationalized. but of course it might not happen. so do you sell or not?

Appreciate that - good points.

As it happens, I do have figures that I would buy and sell at. But yes the decision whether to sell or not before possible nationalisation would be very difficult.