Help understanding ( shares etc)

LobsterMemory

If you're looking to make big returns on buying and selling shares in short timescales then think of that as trading rather than investing. I'd say nobody on this site, not even me, is going to tell you this is a good idea when you don't know what you're doing.

My advice would be to find a site that allows you to practice trading with a virtual portfolio and see how you get on. Even if you do nicely on that, be aware that if you start using your own real money your decisions are likely to be affected by your reactions to changes in price movements and even the adverts for trading sites say that 75% of people lose money.

If you actually want to invest in stocks rather than trade then don't go in with the expectation that there'll be daily swings in thousands. Even with a six-figure sum, it'll be just a few hundred in the normal scheme of things

BrockStoker

jaybeetoo wrote: »

You only lose money if you sell the shares at a lower price than you bought them. If they are trading at a lower price and you haven’t sold them then you haven’t lost anything!

That's not quite true.



The price of a share can go to ZERO, and never recover. That is the main reason shares are significantly more risky than funds. Funds can also be risky, but in most cases, in a worst case scenario, you are unlikely loose your entire investment with a fund. You can still loose significant amounts with funds if you are not careful.

Thrugelmir

LobsterMemory wrote: »

If you actually want to invest in stocks rather than trade then don't go in with the expectation that there'll be daily swings in thousands. Even with a six-figure sum, it'll be just a few hundred in the normal scheme of things

Holding individual shares can be more volatile than people imagine. Easy to see swings of a few K in a day on a portfolio that runs into six figures.

BrockStoker

LobsterMemory wrote: »

If you actually want to invest in stocks rather than trade then don't go in with the expectation that there'll be daily swings in thousands.

Depends what you are invested in, and how much. Obviously, with a few hundred invested in a single share, "daily swings in thousands" is not going to be likely.

LobsterMemory wrote: »

Even with a six-figure sum, it'll be just a few hundred in the normal scheme of things

Again, it depends what share/shares.


I have a (low) five figure sum invested in individual shares, and have seen swings of hundreds in a day. If I had a 6 figure sum invested then it would be thousands "in the normal scheme of things".


Granted if you invest in blue chips, the swings will not be huge.


The OP should note - if large upswings are possible, then large down swings will also be possible.


I also agree with what others have said on here - don't try investing in shares till you have some experience, and some money invested in funds, as well as some cash put aside for emergencies.



There's certainly not much point in investing in one company. To stand a good chance you need a few companies, and a significant amount invested. Even so, you're still likely to generate a loss if you don't at least have a basic understanding of the companies you are investing in.



That is why I only invest in the one sector I understand when it comes to shares (apart from one share I hold, which was a punt), and even so I'm prepared for the potential of 100% loss (it's a relatively high risk sector). For diversification in other sectors that I am not very familiar with I invest in funds.

Eco_Miser

eskbanker wrote: »

Hopefully you'll see after spending some time on these sites that buying shares via a bank really isn't a sensible approach!

Certainly don't walk into a bank and say you want to buy shares, but two of the cheapest online platforms are part of Lloyds Banking Group - Halifax Share Dealing and Iweb (a trading name of Halifax Share Dealing with different (mostly lower) charges).

BrockStoker

Eco_Miser wrote: »

Certainly don't walk into a bank and say you want to buy shares, but two of the cheapest online platforms are part of Lloyds Banking Group - Halifax Share Dealing and Iweb (a trading name of Halifax Share Dealing with different (mostly lower) charges).

^ I'll second that. Also, make sure you open a S&S ISA (or SIPP), that way if you do make a significant profit, HMRC will not be able to take a cut.

LightKnow

I greatful for everyones answers, This has given me more to think about and provide a stepping stone for more research.

Just so I don't over rocket myself lol

Can someone explain to me are trade and shares different ? Else am misunderstanding it.

I wasn't expecting so many variables in such investment. I been reading links givrn.

So even if I did research one company alot, am guessing placing my chances on that one is not sensible? Am assuming more broad I am better to kinda minimize risk ? Kinda

Davy_Jones_II

jaybeetoo wrote: »

You only lose money if you sell the shares at a lower price than you bought them. If they are trading at a lower price and you haven’t sold them then you haven’t lost anything!

That’s not really a great way to calculate your gains and losses. Using cash accounting on a portfolio that you could mark to market is a strange choice.

Davy_Jones_II

If you broaden your holdings then you can reduce risk for no reduction in expected return, yes.

Many people starting out will begin by putting money each month into a relatively broad-based fund. I can’t give individual advice, but that’s what I’d do.

MallyGirl

Biil wrote: »

Can someone explain to me are trade and shares different ? Else am misunderstanding it.

A trade is an action - either buy or sell. What you buy/sell might be a share or a fund or an investment trust.
Buying shares in a single company puts all your eggs in one basket. You would need to research several in order to choose one whose price you believe would rise over time.