Dealing in penny shares

marathon_man_3

I'll just have to get a rapper to promote the penny shares that I might invest in, then.
Simple strategy, really.

mike88

For me dealing in penny shares has been a recipe for losing money. The only share I kept for any length of time I sold for £12 on a £1000 investment. I lost amounts varying between £20 and £500 on other penny shares. Sometimes such shares are difficult to sell as there is no market for them.

Dealing in £100 amounts means that even before you start you will be holding on to losses due to buying and selling expenses.

Of course you could strike lucky - look at those holding Poseidon shares - where fortunes were made but the chances of finding such a stellar performer are virtually zilch.

The minimum amount I would advocate for any share dealing would be a £1000 and even then this is a small sum. As you want to deal in such small sums suggests that you have not a great deal of disposable income so why bother as you should in any case never invest more than you can afford to lose.

Whatever you decide Good luck. You might need it.

marathon_man_3

mike88 wrote: »

The minimum amount I would advocate for any share dealing would be a £1000 and even then this is a small sum. As you want to deal in such small sums suggests that you have not a great deal of disposable income so why bother as you should in any case never invest more than you can afford to lose.

Whatever you decide Good luck. You might need it.

Thanks for your good wishes.
Although a pensioner, I am doing OK and could easily afford £1,000 or more on this venture. However, I simply don't want to spend more than £100 but will get a good deal of enjoyment out of researching the various companies whom I might put a few quid into. If I lose the whole £100 then so be it but, as I suggested above, I will get more enjoyment and brain exercise losing the £100 on some shares than if I lost £100 on lottery tickets or on a horse.

vacheron

It looks like most of the discouraging replies on here relate to 2 issues from your initial posts.

1: The use of the term "penny shares" when what I believe you are looking for is higher risk, higher volatility shares for taking a self researched punt on for a bit of sport. However, as mentioned above, the actual price of the shares is not important, the percentage by which the shares rise and fall is what is important which is based on the stock markets perceived value of the company irrespective of the share price.

That said there is a psychological belief by many people that owning thousands of shares gives a better "feeling" than owning a few shares of a higher cost.

2: The trading charges which will be an issue. However as I have recommended to others before you could open a Halifax ShareBuilder account that lets you buy shares for £1.50 per trade rather than the usual £10-12 per trade. This is particularity good if you want to slowly build up a holding month by month.

You could also look to see if there are any investment clubs in your area which you could join where everyone pools together to share research and trading costs.

mike88

marathon_man wrote: »

Thanks for your good wishes.
Although a pensioner, I am doing OK and could easily afford £1,000 or more on this venture. However, I simply don't want to spend more than £100 but will get a good deal of enjoyment out of researching the various companies whom I might put a few quid into. If I lose the whole £100 then so be it but, as I suggested above, I will get more enjoyment and brain exercise losing the £100 on some shares than if I lost £100 on lottery tickets or on a horse.

Another option to meet your objective of researching shares is to join an investment club. Details here:

http://www.thisismoney.co.uk/money/investing/article-1583893/Investment-clubs.html

http://www.proshareclubs.co.uk/

sabretoothtigger

Halifax ShareBuilder account that lets you buy shares for £1.50 per trade

It used to be 1.50 to buy and 5 to sell which is super cheap but it is now 2 to buy and 11.95 to sell.

Regular investing is best because most investors especially new will not find the best price immediately.
Much more then 1% dealing costs starts to be a bad idea quickly as you must pay to sell also, etc

Selftrade do regular invest and maybe others. Unit trust is better then shares as its all percentage based


Mentioning lottery tickets is very fitting as this is most peoples approach to shares at start, unfortunately its the wrong approach. I do recommend regular invest as it'll put you into the right frame of mind, more then buy once and hope to 'win'

Nobody mentioned this yet I think, but most small companies issue shares to fund themselves.
You buy 1 of 100 shares in 2012 and in 2013 the company issues 100 more to pay their bills, you lose half your money more or less except if this company is real quality and discovered/improved enough assets to make all shares old and new worth more - many fail to do this.
Look at Millwall FC for an example of that I think

vacheron

sabretoothtigger wrote: »

It used to be 1.50 to buy and 5 to sell which is super cheap but it is now 2 to buy and 11.95 to sell.

Aah, thanks for clarifying that. I haven't used mine for a couple of years now so was thinking of checking first, but didn't.

IIRC I think to sell used to be £9.99 or thereabouts too.

Seems funny that price would go up when dealing charges on they whole remain static, or if anything are falling... what would they have to gain...;)

sabretoothtigger

I wasnt best pleased but obviously hbos needs the money. To be fair, they are still one of the best as they often do special offers like this week was 3.95 for any share at all but thats doesnt help unless the price is cheap enough coincidentally


This one did free share buys today. You have to pay to sell but considering how little 100 is and the OP intention to take gigantic risks, maybe they'll be nothing left to sell :eek: or if it goes up 1000% costs will not matter by then

http://sharedealing.nandp.co.uk/
20th Dec they'll do it free again

600% gain

CRISPIANNE3

No share is safe and only gamble on penny shares if you can afford to lose the money. I speak from experience going back to the 1970's when Australian Gold shares were all the range.