first shares investment q

dilby

Hi all -

I have been considering starting an ISA or investing in stocks and shares for a while, and have been tracking a particular company that I know are doing well and have confidence will continue to do we;l for some time, who I've often thought would be good to invest in.

At the start of the year I downloaded the 'Trading 212' app, which allows you to setup a pretend £50k account and invest with fake money. I threw the entire £50k on this company and it's already up to £68k. In fact, if I had of invested with them when I thought I should - all the way back to 2009, I would have timsed by money by almost 16!

I know that MSE and many people advise to first use an ISA first to take advantage of the tax savings on interest, but the growth im seeing here far outweighs that, and I'm hoping that someone could tell me straight if I'm being stupid or not. (Also i wouldn't be able to choose this company if using an isa).

To complicate things I also have a limited company which I invest in a pension through, but as far as I can tell investing in stocks and shares through the company rather than personally wouldn't offer me any real benefit.

I'd also love to know if anyone has any experience with trading 212, and if there are any other platforms out there that people would recommend over it.

Thanks so much for the help, and apologies for such ignorant questions!

AnotherJoe

The trading platform is close to irrelevant as long as its regulated.
Since its buy and hold pick a platform that's cheap to hold it. Dealing costs are less relevant than cost to have an account.
Put it in an ISA.
Don't gamble more than you can afford to lose.
Yes it's not the "approved" way of investing here but as long as you hold to what I said about how much, then why not. To be fair that's what I did and have subsequently moved to funds and the like but I still own some individual company shares.

Albermarle

Having a S&S ISA , is convenient rather than a big money saver.
More of an issue here is that investing in individual shares ( one share ? ) is very risky . Potentially very rewarding, but also potential to lose everything .
Also mainstream investment platforms ( I am not familiar with the one you mention ) allow investment in individual shares in the usual markets , so if the one you like so much is not available on these platforms , then that is sending a loud danger message.

DrSyn

1. What is the name of this company that has done so well?

2. What is it that gives you such confidence it will continue to do so well in the future?

3. A rising tide lifts all ships. Stock markets have been rising since 2009 so if you had put money into a simple market tracker it would also have gone up in that time.

4. As you mention 'Trading 212' app, this implies you are thinking of trading stocks and not investing in them. What makes you think you will have an edge over the professionals and their computers? Will you be telling your partner about this trading?

5. Setting up a " pretend account" and trading with fake money is one thing.Trading with your own real money is another. Especially when its your £50k. Things really do change!

6. It would be safer to learn about SIPPS and investing, rather than trading?

7. If you are thinking of buy and hold on the other hand, I suggest watching:-

http://www.kroijer.com/

p00hsticks

Albermarle wrote: »

Having a S&S ISA , is convenient rather than a big money saver.

Generally true, but the big plus is that Capital Gains Tax does not apply to anything held in an ISA - and in the theretical example the OP states, where he's seen a gain of £18k from the start of the year, having the shares in an ISA can represent a big saving when you sell.

dilby

p00hsticks wrote: »

Generally true, but the big plus is that Capital Gains Tax does not apply to anything held in an ISA - and in the theretical example the OP states, where he's seen a gain of £18k from the start of the year, having the shares in an ISA can represent a big saving when you sell.

Thanks, I haven't considered capital gains tax at all. I'll have to read up on that shortly. Would buying through my limited company make any difference to this?

Thrugelmir

dilby wrote: »

In fact, if I had of invested with them when I thought I should - all the way back to 2009, I would have timsed by money by almost 16!

The question I would ask is if you've missed the boat then. Be a lot harder for the company to grow in value by another factor of 16 in the next decade.

Would I stake a 100% of my money on a single company. No. However I would consider holding a number of well researched speculative positions within a larger portfolio. Small investors can take opportunity of the pricing in micro cap companies. Though there's obviously a much higher risk of losing money.

bowlhead99

dilby wrote: »

Thanks, I haven't considered capital gains tax at all. I'll have to read up on that shortly. Would buying through my limited company make any difference to this?

Your limited company would pay corporation tax on the gains it makes and then when you want to take those net profits out of the company you can pay dividend tax on what you extract (or income tax/NI on taking it out as a salary).

Depending on the amounts involved, may be more useful to do most of your investing as an individual and get to use your annual CGT exemption amount against the gains you make in a particular tax year.

Or of course invest through an ISA to avoid UK taxes altogether. A more efficient way would perhaps be for your company to make pension contributions for you (tax deductible against its income for corporation tax purposes) and then do your investing inside the pension. Although, in order to get the excellent tax benefits from pension investing you have to lock the money away until your late 50s before you can withdraw it.

Of course, tax on the profits may be a non-issue when you consider how much you'll realistically make on your stockpicking, compared to what you hope you might theoretically get if you repeat your luck from the play money account or what you think you would get if only you could go back in time and bet on the companies that made it big which you liked at the time, conveniently forgetting the companies you may have bet on which have not been in your memory much recently due to being losers...