Why does anyone buy individual shares?

Thrugelmir

arwain wrote: »

If you had invested around $2000 at the IPO then you would have around $1000,000 in Apple stock today.

Apple has had a chequered existance. Fortunes revived with the iPhone. Which isn't that old as a product in the scheme of things. Picking winners from IPO's is far from easy. As the Dot Com era showed. 75% of those that listed subsequently disappeared from sight.

Instead you could bought Sports Direct for 6p a share in 1999.......... currently around £3.59p

abz88

capital0ne wrote: »

So why does anyone buy shares when they can't possibly beat the market?

Anyone who says they know better is talking hogwash - they don't just look at Neil Woodford, he had a lucky run till now.

capital0ne wrote: »

Ditto, and what research do you do then, how long would you take researching a potential stock to purchase? Any useful tools? Free or paid for/web based? Please let us all know it would be very interesting and useful.

Cheers

So you write a thread asking why anyone would buy individual shares as they are talking "hogwash" if they think they can beat the market doing it and you then claim that you in fact buy individual shares to beat the market when you feel your tracker is light on certain shares?

So which one is it? Or are you talking hogwash yourself?

LobsterMemory

iglad wrote: »

After owning Lloyds, RBS and Aviva shares for almost 20 years I've come to the realisation that owning individual shares isn't for the small investor.

Now if you change that to

iglad wrote: »

After owning Lloyds, RBS and Aviva shares for almost 20 years I've come to the realisation that owning individual shares isn't for me.

you have a nice valid statement

or change it to

iglad wrote: »

After owning Lloyds, RBS and Aviva shares for almost 20 years I don't think that owning individual shares is for the small investor.

you have an arguable one

Your conclusion in your original post isn't sound

Radiantsoul

poppy10 wrote: »

Not true at all
Someone who invested 10k in an S&P 500 index tracker in 1989, and did nothing else other than reinvesting the dividends, would have over £1.5million now.

That doesn't sound correct, it would require a CAGR of over 20%. I think £174k is a more realistic number.

[Deleted User]

I reckon 90% of investors would be happier and richer if they took responsibility for their own investments.

Paying a fund manager or a financial adviser (or both) is like paying your estate agent a commission until he decides to sell your house.

Prism

ZingPowZing wrote: »

I reckon 90% of investors would be happier and richer if they took responsibility for their own investments.

Paying a fund manager or a financial adviser (or both) is like paying your estate agent a commission until he decides to sell your house.

Possibly happier for a while until they realised they were poorer. Most individual investors do pretty badly it seems

[Deleted User]

Prism wrote: »

Possibly happier for a while until they realised they were poorer. Most individual investors do pretty badly it seems

There is a dedicated thread on the subject of individual investor v fund performance.

https://forums.moneysavingexpert.com/discussion/6037441/zingpowzing-v-bowlhead-challenge

4 shares against the best fund, over a year.

No aftertiming, no hindsight, let us see how it plays out, not just against each other but as a benchmark against your own investments.

bd10

capital0ne wrote: »

Ditto, and what research do you do then, how long would you take researching a potential stock to purchase? Any useful tools? Free or paid for/web based? Please let us all know it would be very interesting and useful.

Cheers

To be honest, I have no formal process. For funds I have, not for stocks, that's more speculation. But I am looking at hard facts: I read their annual reports, their business outlook, the shareholder base. If a stock has been been listed for a few years/decades, I calculate the upside and downside beta, also is it leading or lagging the index. Who are its competitors, are there any significant short positions against it? What's the primary market? Any country exposures to be aware off (e.g. Brexit, China, etc)? How expensive compared it its peers? Dividend history/growth. This is technical analysis, but all starts with the products/services the company offers. I have some no-go zones for sectors which are in structural decline, so won't touch those. I keep this casual and nothing is formalised as trading plan. I buy and hold. But if a stock won't perform pretty much immediately, I'll sell out and keep it on a watch list.

abz88

ZingPowZing wrote: »

There is a dedicated thread on the subject of individual investor v fund performance.

https://forums.moneysavingexpert.com/discussion/6037441/zingpowzing-v-bowlhead-challenge

4 shares against the best fund, over a year.

No aftertiming, no hindsight, let us see how it plays out, not just against each other but as a benchmark against your own investments.

Valuing shares over 12 months isn't exactly of much value. Trackers are generally long term investments compared to shares that can be short or long term investments. That and the tracker fund has an annual cost of 2.2% and that looks to be before a platform fee is added?! Compared to a more standard tracker fund (Vanguard, Fidelity, HSBC etc) of around 0.2% to 0.5%