Shares - what and how

firehawk_2

Hi all.

I have some money to burn/invest in. I really want to be able to make something out of it.

Now being a newbie to shares, I am wondering how it works? I mean say for example I buy around £10K worth of shares, then what happens? When would I increase my return on that investment? after how long would I get that paid back to me?

which companies are worth investing in which makes a quick/good increase in the shares?

Thank you

Lokolo

It isn't as simple as that. No-one for sure knows what the future holds, you have to make a judgement call as to where you think there will be profit.

firehawk_2

thanks Lokolo.
so aside from that, what about my question on how it works? where would I go to buy shares? and when would one get the money invested in it back?

p00hsticks

You'll need to do a lot more reading.

but basically the price of shares goes up and down on a daily basis depending on how well the company is doing and the general economic outlook etc. You can buy and sell shares at any time (during the trading day Monday - Friday) at the price then current- that could be lower than what you paid for them.

How much of the money are you prepared to lose ? And how long can you keep it invested ?

If I knew which shares would make a quick / big increase I'd be on a yacht in the carribean rather than replying to you ;-)

firehawk_2

ideally I would like to lose 0! But I am prepared to lose around £1000 to £1500.
the term of investment? not long. probably short as possible but long enough to make something out of it.

p00hsticks

firehawk wrote: »

and when would one get the money invested in it back?

Maybe tomorrow, maybe never - having bought shares it's entirely up to you if and when you sell them again. Whenever you sell them you'll get the market price detemined by the stock market on the day, which could be higher or lower than you originally paid.


Some shares pay dividends every six months or a year, and some people invest in shares mainly to get that dividend, especially these days when it can be a better return than you woudl get by sticking the money in a savings account.

firehawk_2

thanks. yeh, that is what I would like... dividends and then have that in my bank account.

6 months to a year huh? hmmm. ok

p00hsticks

firehawk wrote: »

ideally I would like to lose 0! But I am prepared to lose around £1000 to £1500.
the term of investment? not long. probably short as possible but long enough to make something out of it.

What percentage of the amount you intend to invest is that ?
To be honest, short term investing in shares is really little more than gambling, and I susect more risk that you are preapred to take - you may as well go and stick it on a horse in the 2.30 at Kempton.

firehawk_2

well like I said, thinking around 10-15K I would like to buy/invest in.

droopsnoot

There's a lot to look into on this - for example, do you really want to buy shares, or do you want to invest in funds that contain a selection of shares? You've said you are prepared to lose around 10% of your investment, but if you invest it all in shares of one company and they go under, you've lost 100%.

The trouble is, no-one can answer your question, all you can do is a lot of research on here, the Motley Fool site, Monevator, do a lot more reading to get familiarity with the world of investing and go from there. If there were hard and fast 'correct' answers, the Carribean sounds as if it would be quite busy.

gggareth

a few rules for buying shares.

1.NEVER invest money you cannot afford to lose.
2. DYOR Do your own research
3. Do not chase losses
4. Have a stop loss once/If !! you make a reasonable profit
5.Buying and selling short term is only for traders who have millions to spend
6.Spread your risk
7.Don't listen to anyone analysts are FOS. people who suggest its agood thing are generally trying to talk up their book.

Markets are split up roughly in to:

FTSE 100
FTSE 250
FTSE 350

Aim 100
Aim

the largest companies are in the FTSE 100 ( higher price per share) and generally smaller less riskier EPS and solid dividends ( but not always banks for instance) sometimes are refered to as blue chip companies.

Aim: is lower cost per share but riskier both on share price and dividend.It can be a rollercoaster!!!

I use SIPPDEAL for my shares and have been happy with the site and service over the last few years.

You need to understand how it all works for a year I got a virtual portfolio ( I think it was MSN money) basically play money where you buy and sell virtual shares. Google it and spend some time getting to understand you pay for every Buy and sell transaction there is also stamp duty to pay.

Loads of Info available again DYOR and decide yourself.

Good example for me this week is a company Called TALV.L..
Invested at 7.25 pence per share .. High today was circa 11.25.

I just brought at the right time after lots of prior research.
Not sold yet but put in a stop loss of 9.75 =PROFIT...

I wish they were all that easy.!!out of 10 shares I brought this month only 6 are in profit.


REMEMBER if you can only afford to lose 10% of 15k you should only invest £1500..


gggareth