Trading212 selling query and gold or silver?

martyp

Hi all,
I signed up to the Trading212 offer last month and now up to around £155 from the £100 investment with the £50 free shares (H&M).
I put my £100 in Vanguard FTSE All-World (Acc) as a suggested safe option. I am curious about gold and silver as they do seem to be on general upward trends and seem an obvious investment.
I considered selling 50% of the Vanguard shares maybe and going for Gold or Silver?
It seems like the theoretical money maker but there must be reasons that every man and his dog don't invest every penny they have into it.
Sorry new to all this stuff, so apologies for the newbie and possibly daft question.

Isthisforreal99

Suggest you have a look at some price charts for both and see how volatile they can be, that volatility recently seems based on the madness coming out the White House.

Most investors don't want volatility but if you are only talking £155 and you can afford to lose it?

Albermarle

I put my £100 in Vanguard FTSE All-World (Acc) as a suggested safe option

This investment ( or any investment) is not safe, and could drop 40% in a matter of weeks in a bad case scenario.
It is only safe in the meaning that it is a regulated investment with a reputable company, so will not disappear into thin air and you lose everything.

Having said that it can be a good choice of investment for the long term, as this gives it time to smooth out the ups and downs.

Same for gold - it has done well recently, but the future is unknown.

The only safe place for your money is in a savings account with a bank.
Investing means taking a risk to try and get a better return than you get at the bank. 

InvesterJones

It sounds like you are speculating (interested only in short term price), rather than investing. Most people lose money speculating. Most people gain money investing.

Have a think about what you want to achieve, and then try and understand how the different options contribute towards that. When you buy equities you're buying (small) parts of companies that make or do stuff that other people buy - they generate income, which then goes into either paying shareholders or making the company which you have a share of worth more. When you buy gold you are buying a commodity which you're hoping is going to be worth more to someone in the future than you paid for it today.. but without any inherent value generation by itself. There are other alternatives if you want to diversify away from equities, like bonds - these generate income from the interest they charge who they are lent to for example. But buying something just because 'it seems to be on an upward trend' runs the risk of you being left holding it just when it starts a downward trend..

martyp

Many thanks for the great advice, much appreciated. I have savings accounts as well which are a mix of fixed rates and variable for different reasons (mortgage overpayments, easy access etc.). I had considered shares before but didn't fancy risking it until the offer last month where I thought that £50 extra was a buffer as such and free money in a sense anyway. The £5 or so on top of that was an added bonus but was prepared for some volatility etc.
It was a bit of fun and testing the water to an extent, I've resisted putting any more in than was required for the £50 free shares.
Trading 212 does keep pushing to get interest on the shares as well but seems like there are some disadvantages although not huge I don't think?
I must admit I haven't really considered bonds, I'll have a look at those.

eskbanker

martyp said:

Trading 212 does keep pushing to get interest on the shares as well but seems like there are some disadvantages although not huge I don't think?

Can you clarify what this means?

martyp

eskbanker said:

martyp said:

Trading 212 does keep pushing to get interest on the shares as well but seems like there are some disadvantages although not huge I don't think?

Can you clarify what this means?

This is what they said in the email:

Earn daily interest on your shares

Allow Trading 212 to borrow shares from you, secure them with collateral, and pay you daily interest. 50/50 interest split. We split all interest equally with you. Full control. Disable share lending with a single tap. It takes 2 trading days for the program to wind down. Complete transparency. You see which stocks are lent, your collateral and how much interest you earn. Protected. Your lent shares remain secured with US treasuries collateral, adjusted daily. Keep in mind Loss of voting rights When your shares are lent, you lose your right to vote with those shares Lent shares may be used for shorting Traders may borrow shares for shorting, which could affect the value of the stock Dividend taxation Typically, you will get dividends as normal. In rare situations, you may receive your dividend in the form of a manufactured payment of the same amount. In some countries, these payments may be taxed differently.

InvesterJones

Ah, you're investing in a general investment account rather than an ISA (so watch for capital gains/dividends down the line - not an issue with small amounts, unless you have other investments). If you look at the interest on the 'most borrowed' stocks it's fractions of a percent annually. However owning single shares is absolutely on the risky side of things. It sounds like this is just a bit of fun speculating with money you don't mind throwing away, so if you're disciplined, fine.

martyp

InvesterJones said:

Ah, you're investing in a general investment account rather than an ISA (so watch for capital gains/dividends down the line - not an issue with small amounts, unless you have other investments). If you look at the interest on the 'most borrowed' stocks it's fractions of a percent annually. However owning single shares is absolutely on the risky side of things. It sounds like this is just a bit of fun speculating with money you don't mind throwing away, so if you're disciplined, fine.

Thanks yes, I envisaged that the likely worst case outcome is that I might lose a portion of the £50+ I got for nothing anyway so hoping I'd still walk away with the £100 I put in at least. It's more out of curiosity, avoiding getting addicted to it if I can as not entirely confident and don't have loads of money to throw into it so the majority of my money is invested in savings at the moment.

wmb194

InvesterJones said:

Ah, you're investing in a general investment account rather than an ISA (so watch for capital gains/dividends down the line - not an issue with small amounts, unless you have other investments). If you look at the interest on the 'most borrowed' stocks it's fractions of a percent annually. However owning single shares is absolutely on the risky side of things. It sounds like this is just a bit of fun speculating with money you don't mind throwing away, so if you're disciplined, fine.

It can lend shares in ETFs and Investment Trusts as well. In my experience it's rare for your shares to be lent but it might just be a function of the sorts of things I own.