New to Investing

Eco_Miser

waynee wrote: »

Hopefully generate more money than an ISA or savings account.

A cash ISA is a savings account. They're not alternatives.
A Stocks & Shares ISA is an investment account.
An ISA protects the savings or investments it holds against UK Income Tax and (for S&S) Capital Gains Tax.
So you should wrap the first £20k of your investment each tax year (or all of it if less) in an ISA to protect it from tax.

Note: Pensions also protect their content from tax, and may be better for your retirement pot.

benbay001

Username999 wrote: »

Did you find one?

Yes, and i woke up this morning eager to buy into it forgetting its Saturday, haha.

waynee wrote: »

Morning All

Wow lots to think about and read about through all the suggestions.
I was planning on diversifying looking to buy shares in Royal Mail and a few others in the FTSE someon also gave me the heads up on Burford Capital....

Also having a buy into Gold as this seems to be on an steady increase.
The TP shares I hold I was going to sell part of and reinvest elswhere also.
Anyway thanks for all your input wasnt expecting so much, great forum and people.

Please could you explain the reasoning behind Royal Mail and Travis Perkins?
Aswell as trying to be helpful I also use this forum as a learning tool and as part of that i like to know how other people make their investing decisions.

There are of course as many ways to skin a cat, as there are stock picking strategies.
The one i follow, and the one that makes the most sense to me is value / contrarian investing.

The one that makes the least sense to me, is investing in big brands, purely because you recognise them and they produce a good product, with no regard for whether you are getting a good value.

BrockStoker

waynee wrote: »

Also having a buy into Gold as this seems to be on an steady increase.

Gold is a very controversial investment IMHO. I've considered it purely as a diversifier/hedge, but I think cash can be just as good for that purpose so I've avoided gold.

This is worth a look:
https://finance.yahoo.com/news/trade-2020s-sell-gold-buy-215309706.html

I'm a big fan of biotech/healthcare (and tech), but if you are going to invest in that, start off with funds, do some research, and don't buy when the sector has just gone up a lot (like now) - wait for significant dips, and don't put all your cash in in one go.

Edit for another link: https://www.bloomberg.com/opinion/articles/2019-07-08/asteroid-16-psyche-and-all-that-gold-won-t-make-earth-richer

bowlhead99

ZingPowZing wrote: »

Max, if I were using that microscope right now, I still wouldn't be able to locate the merit in your recommendation.

This a guy with a career and a house, he's calling out because he wants to learn about investing.

He won't get much insight from your suggestions, unless he is looking to have someone validate his misplaced faith in some stock or another. You hope to come across like you know what you are doing - but for a newcomer to investing, following what someone else (such as you) did, and assuming what that other person did was smart rather than simply lucky... can end in an expensive or painful realisation.

What products do you like? Disney, Apple, Microsoft? Stick your money into one and review in 2022.

While being prepared that when you review in 2022, you may have lost well over half the money you put into it.

Don't worry about the entry price, the mkt will ensure it is correct

The market may create a seemingly low price for a share because the company is going bust or has a high risk of failure; if you buy it, at that fair and reasonable price, you may lose all your money ... which is the 'correct' outcome for that company and was built into the share price, but it is not very satisfying to know you paid a perfectly fair price for something that is now worth £nil.

Alternatively the market may reflect a high price for share because a lot of people believe the business has the potential to do very well, so you pay that high price... and then it fails to meet expectations and everyone realises they should instead give it a low value, so the share price rapidly changes to the new low one which is a lot less than you paid.

Neither of those are very good outcomes but both are perfectly possible when buying shares in indivisible companies one at a time.

Collect dividends and see how it compares overall, and with your larger Travis Perkins holding.
What you do then is very important: Like having two children, when you have two investments, the easier strategy is to imagine the weaker will "catch up". Don't succumb to that notion. Back the winner.

So buy shares in a random company whose products you like ; if it happens to return more than the shares of a builders merchants over the next three years, sell the builders merchant shares and buy more of it; if it does worse, sell it and keep the builders merchant.

Meanwhile ignore the other 10,000 companies on the planet, no point making the same investment profits that everyone else in the world is making, when you can gamble your entire wealth on just these two companies.

Yes that sounds like great advice.

What can he possibly learn from putting £5 in a thousand different stocks under a fund?

When one is 'learning' it's best not to destroy your wealth, even if to do so would teach you a great lesson about not putting all your eggs in one basket.

By spreading £5000 across 50 or 100 or 1000 companies he would avoid risking the catastrophic wealth destruction that could come with putting the money into one company and it losing a massive proportion of its market value.

ZingPowZing wrote: »

Take a guess and suppose that the shares in Travis Perkins were acquired via a sharesave scheme or inheritance - 25 or 100% discount.

OK I'll take the guess that they were. But it doesn't really matter what he paid for them because that is history. He's got them now, and instead of having them, he could have £16000 of cash to build a decent investment portfolio.

The fact that he might have originally paid £0 or £12,000 is largely irrelevant. Today, it's an investment portfolio worth £16,000 ; and it's a badly-constructed investment portfolio because 100% of the investments are in a single company which operates in a single industry sector, almost exclusively in a single country. There is no reason he couldn't sell all of the shares over the coming months and buy a more balanced portfolio of investments, so that his fortune wouldn't be tied to one builders merchant.

Maybe he doesn't want to do this, which is fine. It's his money.

However, encouraging him to stick his next wodge of free cash into another single business chosen haphazardly ("hey I've bought a Disney product, so I should buy that company"; "oh, someone told me that Burford Capital exists, I wouldn't want to miss out on them doubling in value or going bust while I own them!" ; "hmm, I posted a letter to an obscure street on the Hebrides and was fascinated to discover that Royal Mail had to deliver it by hand for only 61p - I must buy shares in them!") seems somewhat mischievous .

If OP probably lacks the knowledge and understanding to be able to make investment decisions re single company shares, then he is bound to be grateful for the advice of a professional:
Current price is 1629
Should he buy or sell at that price Son Of?

Seems fine to sell most of them at that price - and hold onto a few for sentimental reasons, if not practical ones. The OP recognises it makes sense to sell part of the holding and keep only some of them, to invest more broadly. The logical and better extension of reinvesting the proceeds in one investment (like Burford, Royal Mail, Disney, Apple, etc) is to invest in a broadly diversified investment fund, because you have no clue whether the individual company you pick will do better than the market as a whole and the chance that it might, comes with significant downside risk and the probability that it will not.

That said, I hold Burford having bought at the time of the last 'scandal' and only cashed in about half of them when they rallied 30-40%.

ZingPowZing wrote: »

Nobody "knows," the mkt is always more accurate than any individual.

But most people like to believe an artificial moderator is balancing the fortunes of all they have and all they see. In the financial services industry, they call it "mean reversion.," by which they bet that an underperforming stock or fund will rebound. Almost all children believe in this concept.

Almost all children have no practical understanding of financial markets; like many adults.

If you tell children there are an equal number of red and blue marbles in a jar and pull out a few blue ones in a row, they may think it likely that a red one will come out soon because overall, there have to be as many reds as blues. Markets are more nuanced.

While we don't know how individual stock picks will develop, it is fair to say that Travis Perkins will probably not be able to end up with more profits per pound of capital invested, or more share price growth from here than any other normal business deserves. It traces its roots back over two centuries, but its share price is no higher today than it was two and a half years ago. Shareholders recently (from July 2015) watched despondently as it lost over 55% of its value over a period of three years, three months, and it has not fully recovered from last year's lows.

The market is expecting it to sell off Wickes next year to concentrate on its business-to-business operations, because the company has said it intends to do that, so it will not be a surprise if it does. And it will hopefully get that done while the market is buoyant before further fears of 'no deal brexit' kick in later in the year.

But it is quite ballsy to keep most of your invested wealth in that one company, just like it is probably misguided for the next investment to be in just one company, rather than a portfolio of companies though a regulated collective investment scheme or investment trust.

Londrum

It’s a bit risky having so much invested in the company you work for, even if it’s seemingly doing all right. My sisters husband received shares as part of his bonus for working at Lloyd’s, and over the years he built it up to 75 grands-worth, but then the financial crisis hit and he not only saw them dwindle down to peanuts but he also lost his job to boot! So it was a double-whammy

[Deleted User]

I recommend Sharesave schemes as a great way of investing £500 a month.

The reason you won't see it bruited on this forum is because many of the longest and most persistent posters are in the financial services industry, and they get no cut from Sharesave schemes.

bowlhead99

ZingPowZing wrote: »

I recommend Sharesave schemes as a great way of investing £500 a month.

The reason you won't see it bruited on this forum is because many of the longest and most persistent posters are in the financial services industry, and they get no cut from Sharesave schemes.

On the contrary, there are hundreds of threads which mention sharesave schemes on this board in recent years and they are generally recommended as an excellent thing to get involved in if the opportunity presents itself.

I probably qualify among 'the longest and most persistent posters' and also work in the financial services sector. Yet I have nearly always endorsed the use of sharesave schemes on every relevant thread in which I participated, as they're often pretty much an un-loseable bet; giving the employee the outcome of a savings scheme or a discounted investment scheme, whichever turns out with hindsight to have been worth the most.

Of course, once you have won the 'un-loseable bet' and acquired the vested shares on the cheap, you have no further advantage over the other investors from around the world in keeping hold of those shares. It is usually best to sell them, or most of them, as quickly and efficiently as possible, to avoid the fate that befell Londrum's brother-in-law. That of having a material part of your wealth tied up in a single company out of the tens of thousands of companies in the world. If it's still your employer when it falls on bad times, it would be a double punch to your gut when the shares fall in value at the same time as your job prospects go through the wringer.

As an aside, your tiresome cynicism about the motivations of those that work in financial services does little to endear you to those who have a career in that sector and routinely give their time and advice here for free.

An observer trying to find the root of your animosity might speculate that maybe you had some regulator rule on the side of a financial services business about which you had complained, and now you can't help yourself from making as many digs as possible at the individuals who work in that industry, lashing out to make sure that people know you are crusading against tyranny and oppression. Left unchecked, such animosity may cause others to devalue the various sensible observations you make.

[Deleted User]

"As an aside, your tiresome cynicism about the motivations of those that work in financial services does little to endear you to those who have a career in that sector and routinely give their time and advice here for free." - bowlhead

But your very long posts are not impartial - they validate your place in the financial services industry and encourage others to perpetuate it.

As an outsider, I can see the failures of the industry very clearly, but I have no side.

bowlhead99

ZingPowZing wrote: »

"As an aside, your tiresome cynicism about the motivations of those that work in financial services does little to endear you to those who have a career in that sector and routinely give their time and advice here for free." - bowlhead

But your very long posts are not impartial - they validate your place in the financial services industry and encourage others to perpetuate it.

My posts don't 'validate' my place in the industry. It is the other way round - my career experience validates my position in the industry and my career and life experience lends weight and credibility to my comments.

As an outsider, I can see the failures of the industry very clearly, but I have no side.

While you say you have 'no side', you are hardly impartial when you come on a thread and say that sharesaves are good but people in the financial services industry on this forum won't recommend them because there is no 'cut' for them, as if people from the financial services industry only post here for a 'cut' of something

Or if someone criticises you, you'll say 'does he work in the financial services industry' as an ad hominem attack, as if nobody should be taken seriously if they work in that industry.

Like a few other forum members, you have it in for people in the industry. In reality, if you search the term 'sharesave' on this board and child forums, it would take less than a seventh of a second for the search tool to return 300 threads. I just tried it. In those threads, you'll find plenty of people from financial services workers to laymen, explaining the rules, benefits and nuances of the schemes, and recommending their use to qualifying employees with adequate cashflow who anticipate being employed until the schemes' maturity.

[Deleted User]

That is interesting, bowlhead. I'll take your word for that.
You work in the industry and have posted 9000 times - please bring up one where you have endorsed sharesave as an investment.