Advice for 26 year old investing in shares - circa £500 per month

atush

Cyberman60 wrote: »

I have lost a fortune in shares over the years for various reasons, so my advice would be to invest in property. Your property will never be stolen in the UK, but :

My bank shares were stolen by Gordon Brown, with no recompense even though the bank was still valued at billions by an independent valuer at the time he stole it.

A company I had a large share of was foreclosed on by a bank soon after a 6m pounds rights issue, which was supposed to finance it for another 18 months or so, but of course was used to clear the bank's debt !!!!.

Be very careful with shares at the moment especially as the market is over-priced, so there is only one way they will go IMO.



Houses always appreciate in the long run, but companies can and do go bust, and corruption is rife.

total crock.


I have made a LOT in shares over the years, and against have lost a bit. in comparison.

I have bee lucky with some property but over the years (and we are talking 100) shares/funds beat property. Period.

Cyberman60

atush wrote: »

total crock.


I have made a LOT in shares over the years, and against have lost a bit. in comparison.

I have bee lucky with some property but over the years (and we are talking 100) shares/funds beat property. Period.

You must be a financial adviser....... :rotfl:

Eco_Miser

Cyberman60 wrote: »

Your property will never be stolen in the UK

Houses always appreciate in the long run

You never encountered a Slum Clearance Area, or whatever euphemism they're using now, have you?

House value goes to zero, land value goes to not much.

You also seem to have missed the various news stories about houses falling into the sea, river, collapsed culvert, etc.

jimjames

Cyberman60 wrote: »

I have lost a fortune in shares over the years for various reasons, so my advice would be to invest in property. Your property will never be stolen in the UK, but :

My bank shares were stolen by Gordon Brown, with no recompense even though the bank was still valued at billions by an independent valuer at the time he stole it.

Your example would tend to indicate not to buy shares in single companies. Did you realise the risk you were taking buying shares like that as any company can go bust? Nice try to blame Gordon Brown though, he could have just let the banks fail and you'd still have no money from the shares.

Cyberman60 wrote: »

Be very careful with shares at the moment especially as the market is over-priced, so there is only one way they will go IMO.

Shares are also in markets all over the world, are you seriously suggesting that every market is overpriced at the moment - even the ones that have fallen to lows? Buying funds is far less risky and you are not exposed to the same risk of a company going bust or falling in value.

Cyberman60 wrote: »

Houses always appreciate in the long run, but companies can and do go bust, and corruption is rife.

You also conveniently forget the property crash of the early 1990s. It took 10 years before prices crept back to the same level so I think your statement of property being guaranteed is equally incorrect.

atush

Cyberman60 wrote: »

You must be a financial adviser....... :rotfl:

Nope just a punter who invests mainly in funds, drip feeding in each month and trades in shares with a small portion of my overall savings. That way I dont ever risk all.

In_For_A_Penny_2

Cyberman60 wrote: »

Be very careful with shares at the moment especially as the market is over-priced, so there is only one way they will go IMO.

Houses always appreciate in the long run, but companies can and do go bust, and corruption is rife.

Some might say the housing market is over-priced at the moment - personally I reckon the UK housing market is the most dysfunctional and over-priced market in the world but thats for another day. . .

Regardless of what you think about that, I don't understand why, having just bought a home, the OP would wish to further expose himself to property as a potential investment. Diversification is key surely?

pheonix254

With shares, it's very much down to you.

It'll be very easy to have crippling commision fees on a £500 / month buy in - do the sums - assuming you go for a discount broker with £6/trade, and you go for a different stock/fund every time, then from the word go you're £12 down (as you'll need to sell in the future) (+ potentially stamp duty, though usually only on buy transactions of £1k or more). Which in percentage terms is 2.4%. That may not sound like a lot - but in order to beat a cash ISA at 1.75% return, your chosen stock needs to move by +4.15% over a year for you to see that kind of return. Of course there are products out there which have much lower comissions for doing these monthly investments which make the required returns lower, and I'd look at these.

Equally, you need to look at the sort of risk/return profile you want. If you want larger returns, you take higher risks. I played with a few hundred quid here and there at uni with penny stocks. I made some spectacular returns and some equally spectacular losses, with highly volitile stocks. As you're young, you can probably take quite high risks with your money to get a better return, but only do so if you're willing to risk losing it.

If you want to invest in the market whilst remaining highly diversified and lower risk, personally I'd plan to build up several thousand in a fund - if you're unsure as to which just go for an index tracker with a low fee which pays dividends - FTSE100 (e.g. VUKE). You can quite easily do this with a £500 monthly purchase, and once you;ve got a reasonable amount in that (say £5k) then look to put money elsewhere like a bond fund.

But first off a warning- be hyper aware of the risks. You can quite easily lose a vast amount of money. Treat the entire stock market as a gambling den - effectively it's a bookies with far higher stakes. Treat all advice you get from strangers/ the internet/ family and friends as you would from a sleasy guy in the BetWilliam Power betting shop who knows a guy who knows a horse trainer. Do your own research on everything, and make your own decisions. Treat everything with suspicion, and everyone as if they're trying to rip you off, including your broker. Don't be afraid to admit when you've made a bad investment, calculate an acceptable loss level for your transactions, and stick to them - sell if necessary. The market is all about mind games and herd psychology. Take the time to learn about it and how the vast majority of market participants go wrong, and make sure you don't make those mistakes.

Better yet, make the mistakes yourself and learn from them. start with £500, and try and make it into £5k as fast as possible. When you lose it all (and you will), reflect on what happened, why you did what you did and how you felt at the time. After that you'll be much wiser about how the market works, and how addictive and emotional it can be. You can also try doing a virtual portfolio while you save up enough to make your first investments. this will give you an idea of what happens - but just bear in mind that virtual money and real money are very different things. Investing can be quite fun, but like all gambling, only invest what you can afford to lose.

Best of luck

pheonix254

A couple more points to answer your questions more specifically -
ISA - you'd be foolish not to, unless you've already used your limit. Bear in mind you pay (reduced) tax on dividends even in an ISA wrapper.

£500 trade - yes, it's possible (i wouldn't consider much lower than £500), but only if the commisions are low. Investment builders exist for £1.50 or so per trade. this is the only option I'd personally consider at these levels.

Brokers - virtually all will alow you to set a buy and sell price (a limit order), and best available price is standard (and used the majority of the time). You use both in different ways. If you want a stock/ETF, now, you use best available. If you want to set a stop-loss limit, then you set that as a separate trade. As for brokers - there are loads. HB markets, iii, TD, x-o, plus the usual high street UK banks. Take a look, open some accounts and use their dummy portfolio options to take a look at what you prefer. It'll show you how they work and what interface they have. You'll be choosing based on what options and charges they have for regular investments, by the sounds of it.