Shares - quick and simple request.

Tokyo_8

Apologies if this goes over old ground for a lot of you!

I'm wondering if I can buy a few shares and just have a play with it
for a year say to get an idea of how it works and get some experience in it, to see if it's viable to get involved with as the years go on.

I'm looking for a platform to buy a few shares, I've seen something I wouldn't mind buying and they are 8p a share. At this stage I'm just looking to 'play' and not necessarilly looking for it to make any big returns, just gain experience. I might buy some more ones along the way.

Can anyone recommend a platform/broker that isn't going to cost an arm and a leg for the 'experience'

Also, I was handed some standard life shares a while back, which standard life hold. I might think of moving them to this new account. It seems a natural thing to do, but I'm assuming proper advice may say leave the shares where they are and keep away from trading shares

Many thanks for any advice/input!

brasso

Set up a dummy portfolio, available on most platforms, where you can make pretend investments without any cost.

Tokyo_8

I've kind of been doing that, but I want to do it for real so I can get my head into all the associated costs - it just helps me understand and focus with something more tangible!

Thanks though!

redbuzzard

Just 'google' cheapest share broker.

You're right - if you're new to investing, I wouldn't start with picking individual shares. The best way to make a small fortune investing or trading in shares is to start with a large fortune.

Buying them is the first problem; you then have to decide when to sell which is usually the hard part.

The thing to keep in mind is this - if you think the 8p share is set to double in price in 12 months, what information or insight do you have that the market does not? Because if the market agreed with you, the shares would be nearer 16p than 8p today. So if you buy them on that basis without at least believing you have some unique insight, you are gambling pure and simple.

If you are buying for the dividends, you need to do your homework too. You are still dependent for your total returns on the future track of the share price. Are the earnings likely to be maintained? If the dividend yield is attractive now, why is the share price not higher? Unless you can arrive at an informed view on questions like this, then again you are betting blind.

If you only want to play, you don't need to use real money:)

steelbru

Here's a comparison of brokers, which are good for what type and frequency of dealing, etc
http://monevator.com/compare-uk-cheapest-online-brokers/

Tokyo_8

I've had a look at monevator links already and am fully aware of being naive in all of this.

My idea of how shares work is quite basic and only doing it will i get an fully understand it.

I've had a look at X-O.co.uk and am I right in assuming that I pay a fee for purchasing the shares a fee for the broker to hold the shares and a fee for selling the shares.

But X-O.co.uk seem to say it's just one fee!


I was thinking I would like to buy some shares I been noticing in the digital/technological areas that go for around 50p area! all the comments about these shares end up talking about long term ambitions and not necessarily short term gains. so I'm happy to hold onto them for a while and keep an interest in looking and reading about the shares industry.
I currnetly have s&s isa with HL but their prices for brokering shares are way to much for the kind of shares prices I'm looking to invest in. Like I said I'm only looking for small items and small rerturns while I feel my way through it. I think I'm happy to pay a fee that is almost the same as buying a magazine, to get the experience.

Just wondering if anyone has some advice on pitfalls like hidden costs outside of the buying, holding and selling costs on shares and whether anyone uses any other platforms that they could recommend for my idea.

I've got a kind of 'you've got to try it and see if you like it mentality' about it all, but I'm not prepared to throw large sums of money at it because I can just put that into my ISA

steelbru

There is a "dealing" fee - which applies to both buying and selling, so £5.95 each time you buy or sell some shares. There is no "holding" fee, or "platform fee" as it is commonly known.

Tokyo_8

Hi Steelbru

So if I set up an account with X-O.co.uk all I would pay is £5.95 to buy the shares and the same again to sell them? that's the only extra payments I would incur other than a lose on the share value?

In other words If I bought some shares with X-O.co.uk As long as I made £12.00 on the shares I would break even with these guys?

Have you any opinion on X-O.co.uk at all

Thanks again for your advice!

steelbru

There is also stamp duty, a tax payable to the government, of 0.5% which is payable on the purchase only, not the sale.
The platform, ie x-o, will charge this and pay it to the government, no need for you to record it on tax return or anything.

I have no opinion on x-o, I've never used them.

I use iWeb which is only £5 per trade, again no holding fee, but there is a one-off £25 set up fee - so depends how many trades you see yourself doing. The iWeb website is pretty basic, compared to say HL, no idea what x-o website is like. Some people are prepared to pay more for these sort of things.

x-o is I think cheapest for infrequent share-dealing.

You should also be aware of other charges mentioned in the monevator table :-

eg x-o will charge you £18 per holding, plus £60 closure if you want to transfer your holding to another broker.

Will your shares pay a dividend ? If so, some brokers will automatically re-invest that in more shares of the same company if you want, at a lower cost than if they paid you the money then you paid normal dealing charges etc.

I'm sure the x-o website will have full detail on all their charges which you should check you are happy with.

Tokyo_8

Obviously without holding you responsible, are you saying if I went with IWeb, there's a set-up fee of £25, then it's £5 fee every time you buy some shares and a £5 fee every time you sell some shares - there's no other outlay than that? and hopefully you make that money back if the shares increase in value.

how long have you been using IWeb, are you happy with it?

Cheers Steelbru

steelbru

Yes, the iWeb fees you've quoted are correct ( it's all there on the monevator link ), but don't forget the stamp duty of 0.5% as well on purchases.

I've only moved to iWeb in the last week - the HL fees were too high for me. So far so good.