Advice for first purchase of shares

eviekins · 9 October 2016 at 9:19PM

Hi guys!
Potentially a silly question here, but I'm going to to go ahead and ask it anyway!
I keep an eye on a particular companies share price almost daily, on Friday evening I noticed they were low and my gut instinct is to buy them now (8am tomorrow).
I've never purchased shares before, so was wondering if I should buy them by opening a fund and share account or whether I should buy them through the vantage stocks and shares ISA.
I haven't put anything in to an ISA this year so for that reason does that make it the obvious choice rather that the fund and share account?
Is there anything else I'm missing!?
I realise it's not necessarily sensible to buy shares just in the one company, but this is the lowest price they've been in 5 years.
Thank you in advance for any advice!
Evie x

bsod · 9 October 2016 at 9:41PM

eviekins wrote: »

Is there anything else I'm missing!?

The reason why they are the lowest price in 5 years

You are betting against a computer.

lpgm · 9 October 2016 at 9:43PM

eviekins wrote: »

I keep an eye on a particular companies share price almost daily, on Friday evening I noticed they were low and my gut instinct is to buy them now (8am tomorrow).

I realise it's not necessarily sensible to buy shares just in the one company, but this is the lowest price they've been in 5 years.

I'd be very careful. Why are you looking at just this one company? The only thing you can be sure of is that the share price could be up to 100% lower in the future.

jimjames · 9 October 2016 at 9:46PM

eviekins wrote: »

Is there anything else I'm missing!?
I realise it's not necessarily sensible to buy shares just in the one company, but this is the lowest price they've been in 5 years.
Thank you in advance for any advice!
Evie x

My father did something similar some 15 years ago. He thought it was a great plan. They went on to drop 98%. Just because they're lower than 5 years ago doesn't mean they can't go lower, even now they are lower than when he bought.

Linton · 9 October 2016 at 9:51PM

Buying individual shares is high risk as you could lose all your investment. Some people do focus on individual shares but if you are doing so I suggest you hold at least 15, and preferably far more, so that one failure isnt catastrophic. An inexperienced investor wanting to seriously invest rather than play would be best advised to stick to widely diversified funds.

cisamcgu · 10 October 2016 at 10:22AM

I have a few holdings in individual shares, a biotech, an oil exploration, and a high tech manufacturer. They amount to about 2.5% of my holdings, the rest is in big, fat Vanguard and HSBC trackers. I would be very hesitant putting any more in individual shares, even though they are the most intertesting. The risk of them collapsing completely is entirely possible, and way past my risk profile.

They are fun though

ArmyDilllo · 10 October 2016 at 11:35AM

I've made 40% on my portfolio since a particular purchase of shares I made at the beginning of this tax year.
It's a strategy I've never followed before but the price was too tempting for me as well.
I split into three funds and two companies.
I've now sold two funds and one of the companies to put all that cash into the one business (B.P.).
I bought in originally at £3.28 and at various points above.
Checking now they're worth £4.863

I only risked that strategy because I have a good spread throughout the rest of my portfolio.
If you don't have a good diversification what you're doing is gambling which is different to investing (although closely related).
NEVER invest more than you can afford to lose.

Good luck.

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Advice for first purchase of shares

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