Shares--whats the point?

Linton

grey_gym_sock wrote: »

there's no compelling reason to buy individual shares if you're not enjoying the process. a few funds or investment trusts would do the job........

Generally I would agree, particularly for the smaller investor. However there are some occasions when individual shares are advantageous. A particular one is dividend income. There are income funds, but many seem to fall into one of two camps neither of which meets my objectives. Either they are really chasing total returns and see higher dividend companies as a way to do this, or they could be taking undue risks to achieve remarkably high yields that dont seem to be sustainably justified by their underlying investments. Also income funds mainly seem to invest in the same small set of FTSE100 companies, whereas there is much of interest in the FTSE250 list.

dealer_wins

A_Flock_Of_Sheep wrote: »

The USA only has to sneeze and it rocks the markets. Buying opportunity A slight threat of tapering QE causes a significant wobble - lord knows what would happen if they just stopped QE dead Really good buying opportunity. The Government shutdown was another thing. Not a weeks goes by where something in the USA causes a "drag" on the markets.

If it's not the USA it's China and it's sodding mines.


Have we ever had a government shut down in the UK?

John Major came close when we got kicked out of ERM on 16/09/92.

Gordon Brown laid the seeds of destruction before he lost the election, and im supirised we didnt go bust during the credit crisis!!

As we are still standing, and seemly recovering, buy buy buy LOL

grey_gym_sock

dealer_wins wrote: »

Have we ever had a government shut down in the UK?

John Major came close when we got kicked out of ERM on 16/09/92.

that looked like a decent crisis at the time (though it was pretty tame compared to more recent events), but it didn't involve the threat of a government shutdown.

Gordon Brown laid the seeds of destruction before he lost the election, and im supirised we didnt go bust during the credit crisis!!

going bust (which it's difficult to do when you have your own currency) also has nothing to do with a government shutdown.

you seem to be conflating economic crises with government shutdowns.

("seeds of destruction" is vague if we're talking about the economy. it sounds more theological.)

Glen_Clark

jimjames wrote: »

I think it is highly unlikely that it would be stopped dead. It will taper gradually. It isn't even happening in the UK now but US is still pumping huge amounts into their system.

Its important to remember the £375 billion is still there flying round and round the system pumping up asset prices. To say QE has stopped would be as wrong as saying VAT has stopped because they haven't increased it above 20%. They would have to sell over £375 billion of bonds and burn the cash to stop QE. That isn't likely to happen because they are as hooked on QE as a junkie on heroin.

C_Mababejive

Im sure it has been covered before but can someone explain the difference between an investment trust and a typical fund as sold by the major platforms?

I do have some large holdings in shares that i need to de-risk and move into lower risk funds.

Of course other issues are the liquidity of funds and also security. I understand that FSCS with regard to funds only extends to £50k..presumably £50k per platform.

We also have the RDR shakedown which i dont think has been concluded yet so who to use as a fund platform for best value? Not everyone has shown their cards yet have they ?

thanks

IronWolf

With the right investment philosophy you can make money in the long term investing. But it takes a certain amount of dedication which I wouldn't advise unless you actually enjoy it.

Linton

C_Mababejive wrote: »

Im sure it has been covered before but can someone explain the difference between an investment trust and a typical fund as sold by the major platforms?

I do have some large holdings in shares that i need to de-risk and move into lower risk funds.

Of course other issues are the liquidity of funds and also security. I understand that FSCS with regard to funds only extends to £50k..presumably £50k per platform.

We also have the RDR shakedown which i dont think has been concluded yet so who to use as a fund platform for best value? Not everyone has shown their cards yet have they ?

thanks

An investment trust is a company quoted on the Stock Exchange just like Shell, Vodaphone etc that happens to invest in other companies. Its shares are traded just like any other shares with the effect that its price may vary independently of the price of the shares it happens to own. If you buy an IT share on the market you normally get that share from someone who is selling and so the investments held by the IT are unchanged. So it is known as a "closed" fund.

A unit trust (or OEIC which is much the same thing but under more modern rules) is a collection of investments. Its value is simply the value of its underlying investments, when you buy or sell units in a unit trust the fund manager has to buy or sell the corresponding shares. Unit trusts are "open" funds.

From an investment point of view ITs and Unit Trusts are broadly the same. But there are some differences which may be important. Historically ITs had lower charges but with the RDR changes this is becoming less significant. A factor with ITs is that their price may be above or below the value of the underlying assets depending on the popularity. People are wary about buying if the price is higher. Most unit trusts tend to come as fairly standard offerings, each IT tends to have its own characteristics.

The £50K limit is much less significant for fund investing than the £85K limit for cash. The key difference is that the bank owns your deposits whereas the fund manager is merely authorised to trade the funds, he doesnt own them. So a bank going down risks all your savings, if a fund manager goes down the fund can continue under a different manager as has actually happened in the past. I'm not really sure under what circumstances the £50K compensation would apply - perhaps if you had paid in some money but it had not yet been used to buy into the fund.

The post RDR world is not yet clear - some major players have yet to announce their new charges.

C_Mababejive

robin58 wrote: »

I hope some people know how to do it or you would not be having a pension.

The above is partly how they make the money to fund and pay the pension!!!

Yes indeed. I guess that big fund managers are really part of the whole big machine. The Necromancers who create profit from nothing or make small things bigger...cream off the profit,,then make them smaller again.

Essentially, the big fund managers can influence situations to generate profit whereas we small timers cannot. We are the bottom feeders.

C_Mababejive

So if iwant to trade ITs,via a platform,the only charges are dealing charges?

JohnRo

add 0.5% stamp duty of the value bought plus the dealing charge, then just the dealing charge on disposals.


** trading IT's could get very expensive unless you are shifting trades worth a good few £K each time. You'll probably just end up making the broker rich.