share dividends

Tayus

hi i would like some information on shares..... i would like to purchase some shares that i can then leave and then recieve dividends can any1 tell me what i should do? i currently have no idea?!

newfoundglory

You mean you want to buy shares, and then sell them but still get the up-coming dividend of those shares?

If thats the case, you would need to buy them before the ex-dividend date (you can find out ex-dividend dates on the net), then sell them on or after this. That way you would still get that dividend.

However, you should realise that share prices can be very volatile and that buying and selling within a short period is considered by some to be very risky. Consider the spread between the bid and asking price. Also, remember you will need to pay dealing charges and stamp duty when buying, and dealing charges again when selling; so take these into consideration before you decide to buy and sell in this way.

Trading in actual shares is usually done by people who at least understand the basics. Most people are advised to buy shares in funds which invest in a large number of company shares to spread the risk of investing in just one or two (putting all your eggs in one basket).

EdInvestor

If you just want to buy shares to hold onto and receive dividend income, then you need to open a broking account and put some money in it to buy the shares with.

***Comment deleted by board guide - awaiting abcon's advice***

Then you have to choose which shares you want to buy. Have you thought about that yet? Did you want shares which pay high dividends?

When you buy the shares you pay a fee to the broker (commission) and stamp duty (a Government tax).You pay the commission when you sell too, but not the stamp duty. The shares will sit in your account and go up and down in value as the market fluctuates. Every six months a dividend payment will come into the cash account the broker keeps for you.

You can invest that money by buying more shares, or transfer for it to your bank as income.

That's about it.

The most important area is choosing the shares.

deemy2004

Tayus wrote:

hi i would like some information on shares..... i would like to purchase some shares that i can then leave and then recieve dividends can any1 tell me what i should do? i currently have no idea?!

United Utilities and many other stocks pay high dividends.

And I recently got 10% plus from Centrica (Nov 04)

cheerfulcat

Hi, Tayus,

You might like to have a look at the Motley Fool's High Yield Portfolio board -

http://boards.fool.co.uk/Messages.asp?mid=9245795&bid=51166

Introduction to the HYP -

http://www.fool.co.uk/news/foolseyeview/2000/fev001106c.htm?ref=valuehome

http://www.fool.co.uk/news/foolseyeview/2000/fev001113c.htm?ref=valuehome

The idea is that you buy a selection of high yielding shares and either reinvest the dividends or take them as income. You *must* go for a portfolio approach when investing - five or six stocks is not enough to diversify risk.

A couple of points; a stock yielding *considerably* more than the FTSE as a whole ( 3.2% ) and the bank base rate ( 4.75% ) is almost certainly doing so because it is unloved; the yield is a function of the price. It may be undervalued for no good reason ( fashion, for example - like utility stocks during the tech fad ), in which case the price may rise, or it may be unloved for good reason, in which case the price may fall. Be prepared for fluctuations in capital value.

Dividend cover is also important; it's no good having a dividend of 8% if the company is struggling to pay it.

deemy2004 wrote:

United Utilities and many other stocks pay high dividends.

And I recently got 10% plus from Centrica (Nov 04)

Deemy - at an average share price for November of ~240p, Centrica paid 8.6 p in dividends; I make that 3.5%.


Cheerfulcat

EdInvestor

Hi cheerfulcat,

Quite agree, that Fool HYP idea is excellent, I have one myself.:) It makes share investing so much easier for ordinary people.

It's best to start it with a lump sum (min 10-15k, or the charges are very high at start)if possible. But you can build up a HYP gradually - and people recommend the Halifax Sharebuilder account for that, much lower charges.

Many of the shares you might put in your HYP are household names - current favourites are

Lloyds Bank
United Utilities, as mentioned
Alliance & Leicester
Dixons
Northern Foods (makes the nosh for M&S)
Boots
British American Tobacco
BT
Legal & General
Scottish & Newcastle
Shell....

and there are loads of others.You should be able to get a portfolio which pays 5% overall at the moment;divis are tax free for basic rate taxpayers.

Definitely worth a look at.A BIG plus point is that after you've bought the shares you pay no other charges, except if you reinvest the divis after allowing them to mount up over time. This makes a major difference to what you eventually get.

##Of course this is not a risk free investment, no equity investment is including trackers, and the value of your shares will go down and up.If this means you can't sleep at night, stop reading this now and put your money in a cash account ##

plumb1_2

See my offer on Comdirect here
http://forums.moneysavingexpert.com/showthread.html?t=235

Al_Mac

isasmurf wrote:

post deleted

Not on the ref board, would it if it was?:beer:

deemy2004

cheerfulcat wrote:

Hi, Tayus,

Deemy - at an average share price for November of ~240p, Centrica paid 8.6 p in dividends; I make that 3.5%.


Cheerfulcat

I got more than 10% in Nov 04 ... Thats hard cash into my piggy bank ....

Their annual yeild is currently about 4.7%

Lets see what it was - before this goes backwards and forwards a few more times....

Lets see from their website ---
http://www.centrica.com/index.asp?pageid=224

Interim 2004 2.5p
Special 2004 25p
Total 27.5p Divided by 240p =11.4%

Theres still the final due.....


Yeh the chances of another special dividend are small, but they do continue to buy back stock on an ongoign basis which increases the value of the shares.

deemy2004

plumb1 wrote:

See my offer on Comdirect here
http://forums.moneysavingexpert.com/showthread.html?t=235

For get £75, I'll give you £80 !

any offers on £80 ? £81... £82...

Serious !

cheerfulcat

deemy2004 wrote:

I got more than 10% in Nov 04 ... Thats hard cash into my piggy bank ....

Their annual yeild is currently about 4.7%

Lets see what it was - before this goes backwards and forwards a few more times....

Lets see from their website ---
http://www.centrica.com/index.asp?pageid=224

Interim 2004 2.5p
Special 2004 25p
Total 27.5p Divided by 240p =11.4%

Theres still the final due.....


Yeh the chances of another special dividend are small, but they do continue to buy back stock on an ongoign basis which increases the value of the shares.

Deemy, I am pursuing this because I don't want people to be misled. You *cannot* count the special dividend; that was a one-off ( from the sale of the AA, I believe ). The *current* yield is 3.69%; the *forecast* yield ( ie what analysts think it will be ) is 4.76%.

Don't get me wrong; I think it's a good investment, and I'm thinking of buying some myself; but I don't want anyone to think that CNA offers an easy 10%, because it doesn't.