Stock dealing newbie question

dont_use_vistaprint

Looking for some tutorial resources covering the following areas, any ideas?

How do you know which shares will prioritise payments of dividends to holders vs the share price increasing? Is that how it works you buy some for growth and some for dividend ? Is there a clear relationship

When a company or many companies in a sector sells its assets to a new type of company / entrant that has huge capital backing and then leases them back to the sector - how does this affect share price and dividends of those companies ?

How do you know when a certain stock pays its dividend and how long do you have to hold it for before/after ?

How do you know which products and markets a particular stock makes most of its profit from the cost of those sales vs the group opex - is this level of info publicly available ?

I want to start buying stock in areas where I have a lot of business expertise, but I know nothing about stocks and shares, what should I do ?

bostonerimus

Don't buy individual stocks! Start with multi-asset funds. You can find all the details like the dividend they pay on numerous websites.

eskbanker

You're making a classic newbie investor mistake of thinking that buying individual company shares is a good way of getting exposure to equities!

For those who are substantially more clued up it may be possible to profit from this, but in the vast majority of cases it's a much better idea to buy into diversified collective investments, where the eggs are spread across many baskets.

To get the ball rolling with some research, there are numerous online resources such as:

https://www.moneyadviceservice.org.uk/en/articles/investing-beginners-guide
https://www.hl.co.uk/beginners-guides/investing
http://www.monevator.com
http://kroijer.com/
http://diyinvestoruk.blogspot.com/
https://www.ifa.com/indexfundsthemovie/

or if you're looking for books to read then search on 'investment books' or similar to bring up all the threads where this question is asked, such as:

https://forums.moneysavingexpert.com/discussion/6036410/good-books-for-a-background-on-the-stock-market

Afraid_of_Kittens

I played the stock market for years. I also was a buy to let landlord. I also have a stocks and shares ISA.

My buy to let properties caused me nothing but stress. Rise in property prices paid off eventually.

I enjoyed playing the stok markets. Made some massive gains on penny shares but the platform fees and trading costs ate into my profits. Feels good to own shares in a company, watch the shares rise in vakue and receive a dividend.

Sold my buy to let properties, sold all my shares, put money into my pension and into my stocks and shares ISA.

Pick a stocks and shares ISA and put money into a handful of funds. Look at the fees and charges.

My stocks and shares ISA causes me the least stress. Just put many into a variety of funds and watch it grow. Research compound interest.

benbay001

The questions you have asked indicate that you are a very long way away from picking your own companies to invest in.


As has been said start with some index funds and then buy some books, watch some videos or read some web pages.


I would like to add to the list above, the YouTube channels of Phil Town and The Plain Bagel.

dont_use_vistaprint wrote: »

When a company or many companies in a sector sells its assets to a new type of company / entrant that has huge capital backing and then leases them back to the sector - how does this affect share price and dividends of those companies ?

I don't know what this means. (OP, that doesn't mean it doesn't make sense) but if someone knows what it means I am now curious about the answer.

Thrugelmir

dont_use_vistaprint wrote: »

I want to start buying stock in areas where I have a lot of business expertise, but I know nothing about stocks and shares, what should I do ?

Read, watch and listen. Expose yourself to as many different views as possible. Utimately everything is down to judgement. When you are a buyer somebody else is a seller. Being contrarian investor is often a lonely place to be. As the focus is often on short term returns.

OldMusicGuy

dont_use_vistaprint wrote: »

How do you know which products and markets a particular stock makes most of its profit from the cost of those sales vs the group opex - is this level of info publicly available ?

I worked in corporate finance and then on big finance systems that multinationals use for 40 years. Understanding product profitability is hugely complex and needs very sophisticated business management systems. Most organizations simply do not bother and have no idea what drives profitability. Studies done into profitability analysis found that in many organizations, most of the products are actually unprofitable but the management team have no idea of this.

So most organizations don't know which products make profit or lose money. Those that do would never reveal it publicly because it is a source of competitive advantage. None of the accounting standards require organizations to disclose profits at anything other than legal entity level.

dont_use_vistaprint wrote: »

I want to start buying stock in areas where I have a lot of business expertise, but I know nothing about stocks and shares, what should I do ?

My advice? Don't do it, except as a bit of fun. I ended up as an analyst and had the inside track on some large IT companies. I know that unless you have access to talk to the management team and key customers (which the analysts do), you will never really know what is happening inside a company.

I wasn't able to invest in the companies I covered when I was working. Now I am retired I could, but I don't, as I no longer have access to the information that would give me any kind of hope of making informed investment decisions. I invest in multi-asset funds.

DrSyn

For a newbie

First watch both of these:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/

Then consider investing in a low cost Global Multi Asset Fund, at a risk grade you are happy with.

Global Multi-Asset Funds:

Vanguard Life Strategy
HSBC Global Strategy
L&G Multi Index Funds
Blackrock Consensus
Architas Passive

The above funds have wide diversification while minimising risk, at low cost.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/


In my opinion newbies should stay away from single stock buying.

MaxiRobriguez

As a newbie, even if you had the knowledge, you probably don't have the capital required to invest in a number of single stocks rather than one or two which would get you some diversification.

If you're buying a single stock on a cheap DIY platform then you're talking £2k per purchase minimum. Anything less and the % of total the fees are eats too much into what you're buying.

It is much easier to buy one global index tracker. Your one and only purchase keeps the cost low and the knowledge requirement low also.

Old_Lifer

My view too is that you should avoid individual shares.


I started investing when I was old enough to do so (over fifty years ago). For the first 10 years or so, I invested only in unit trusts. This gave me the 'feel' for investing with far less risk of a large percentage loss.


In my view, anyone considering buying shares in a company should first spend a year or two researching the company, the market in which it operates and it's competition. Not doing this will in my opinion make a large loss much more likely.

Afraid_of_Kittens

I would suggest researching the various trading platforms and their fees.

Then open a portfolio with the London Stock Exchanges Trade Simulater - making sure you add on your preferred trading platforms fees and costs.

Then play around for a few months with your portfolio.

You are not going to be a Wolf on Wall Street. The fees will eat your profits.

https://www.londonstockexchange.com/global/portfolio/portfolio-and-trading-simulator.htm

Are you wanting share growth or regular dividens? Do you want to trade - buy cheap and sell high?

After seeing your money swallowed by fees and sharges - a stocks and shares ISA will appear to be a logial choice!