Stocks and Shares

sinful07

Hi guys,

I'm looking to start investing in some stocks and shares as a sideline- was wondering if there was a seperate sub-forum for this, an article i could read, or general experience that someone has?

Currently i'm only looking to canvas- i've heard there's a website/app that i can use that 'dummies' the shares that you buy. (as in, you buy shares virtually, so you dont lose money, but you dont gain money either)

Any tips would be great.

Thanks!

Nick_C

You can set up as many portfolios as you like in Google Finance. These track the value of your shares (real or imaginary) and any dividends.

Google Finance also gives you real time prices, historic graphs going back 5 years, and news for companies in your portfolios.

More detailed research on specific companies can be found at http://www.digitallook.com/cgi-bin/dlmedia/companysearch

sinful07

Hey bud,

Any articles i should be aware of? as a beginners guide?

Thanks

Nick_C

Just read as widely as possible. Start by looking at companies you already know something about (as a consumer). Look at the yields, profits, cash flow, dividend cover. A good starting point might be to look at the performance of the individual shares that make up the FTSE 100. http://www.digitallook.com/cgi-bin/dlmedia/investing/screening_tools/performance_tables?&username=nixaccount&ac=211753

You can see broker recommendations (buy, sell, hold) for individual companies.

Be aware of the tax situation. If you are are a basic rate taxpayer, dividends are paid tax free, and it is assumed that they have been taxed at 10%. If you are a 40% tax payer, you have to pay the additional 30% tax on the dividends, which makes the income much less attractive. If you pay tax at 40%, or expect to move into that bracket at some stage, then when you buy shares for real its worth putting them in an ISA (which shouldn't cost you more than about £10 a year).

You could also try googling "introduction to share dealing "

claret_mike

All dividends are taxed at 10% which is non-reclaimable even under an iSA so if you are a non-tax payer, you still have to pay this (or if held in ISA).

If you are a basic rate tax payer, then you have no further liability for income tax.

If you are a higher rate tax payer then you are required to pay 32.5%, however you will have had 10% already paid at source so there is a further 22.5% to pay. (or an easy way to calc is 25% of your net dividend)

If you are an additional rate tax payer, then you are liable for 37.5% in total, so an additional 27.5% to pay.

On top of this, if you do well with the shares you purchase and dispose of them and make gains in excess of £10,900 (assuming no other gains have been made elsewhere) then capital gains tax could be an issue for you - which may mean 18% or 28% further to pay in tax.

Nick_C

Thanks Mike, is was being lazy and couldn't be bothered looking up the tax due for higher rate taxpayers.

Technically though, dividends are paid tax free with a non reclaimable tax credit of 10%. The only tax at source on dividends is corporation tax.

Its also worth noting that the tax credit only applies to UK companies.

Dilly

claret_mike wrote: »

All dividends are taxed at 10% which is non-reclaimable even under an iSA so if you are a non-tax payer, you still have to pay this (or if held in ISA).
.

The benefit of an ISA is not the tax on the divs being reclaimable but that any gain you make is non taxable when you sell the shares, no matter how much you make

Nick_C

Dilly wrote: »

The benefit of an ISA is not the tax on the divs being reclaimable but that any gain you make is non taxable when you sell the shares, no matter how much you make

Surely if you are a higher rate tax payer, there is no additional tax to pay on the dividends? For someone investing for income, that is a significant reason for putting shares in an ISA?

droopsnoot

sinful07 wrote: »

was wondering if there was a seperate sub-forum for this,

Also have a look in the "Savings and Investments" section here: http://forums.moneysavingexpert.com/forumdisplay.php?f=17

Plenty of threads in there for beginners and more experienced investors - have a look around.

Nosht

sinful07 wrote: »

Hi guys,
I'm looking to start investing in some stocks and shares as a sideline
Thanks!

Fine, but run it as a business.
Try the Motley Fool Board.

Regards,

Nosht.