First dabble in the markets

[Progressive]

After seeing my saving account & ISA do absolutely nothing over the past 2 years I have decided I want to invest some of my savings elsewhere. I am considering investing, up to £1,000 of my savings into other sources than a bank. This has the scope to increase but I don't want to get carried away with little experience.

I have watched the markets for a couple of months, trying to clue myself up a little and I have outlined some establishments which I am interested in. After looking at the different options I think I am going to set up a HSBC trading account as it is quick / simple and I bank with them. Does anyone have experience with using this service.

I'm not hoping for a massive return, just a bit of fun and to spread my savings around. I have always been told only a fool (generally) keeps 100% of their wealth in the bank.

Any more advice anyone can give before I embark on this?

Cheers,

[DonkeyApple]

Progressive said:

After seeing my saving account & ISA do absolutely nothing over the past 2 years I have decided I want to invest some of my savings elsewhere. I am considering investing, up to £1,000 of my savings into other sources than a bank. This has the scope to increase but I don't want to get carried away with little experience.

I have watched the markets for a couple of months, trying to clue myself up a little and I have outlined some establishments which I am interested in. After looking at the different options I think I am going to set up a HSBC trading account as it is quick / simple and I bank with them. Does anyone have experience with using this service.

I'm not hoping for a massive return, just a bit of fun and to spread my savings around. I have always been told only a fool (generally) keeps 100% of their wealth in the bank.

Any more advice anyone can give before I embark on this?

Cheers,

I'm sure there will be plenty.

With regards to an equity portfolio diversification and risk and cost management are the keys.

I would suggest that £1000 won't permit diversification and that you will be looking at a bit of a one horse race.

Factor in trading costs, market spread and Stamp Duty to see what your £1000 would actually be worth at the precise moment of investment. It could be just £900 depending on what you are buying. This means that you have effectively lost 10% instantly in your search for a yield greater than cash.

To be completely honest, I wouldn't do it.

[Progressive]

DonkeyApple said:

To be completely honest, I wouldn't do it.

How would you advise I best spread my (relatively minimal) wealth then?

[DonkeyApple]

Progressive said:

DonkeyApple said:

To be completely honest, I wouldn't do it.

How would you advise I best spread my (relatively minimal) wealth then?

Very difficult and subjective question that

Do you own a home or plan to own a home?

Have you set up a pension yet?

Once you have those two aspects covered and you have a nice cash float to cover 18 months potential liabilities comfortably then I would say that you could argue that you have spare capital to operate with.

[Progressive]

Not a homeowner. Looking to rent with girlfriend soon. Got enough cash for a decent deposit but seen too many people have their fingers burned. Never lived with her so a 'trial run' is imperative for at least 6 months.

Pulled out the work pension as it was 10% of my salary needed to go in. I was young and it seemed too much at the time. Should really give that another thought. You can join at any time as far as I know.

Got no debt, finance, major outgoings.

[DonkeyApple]

Progressive said:

Not a homeowner. Looking to rent with girlfriend soon. Got enough cash for a decent deposit but seen too many people have their fingers burned. Never lived with her so a 'trial run' is imperative for at least 6 months.

Pulled out the work pension as it was 10% of my salary needed to go in. I was young and it seemed too much at the time. Should really give that another thought. You can join at any time as far as I know.

Got no debt, finance, major outgoings.

If you plan to buy a property in the future then you need to build cash, not risk it on the markets.

If you do not have a pension because you cannot spare 10% of your salary then this kind of indicates that you should not be risking cash in the markets.

If you have no debt and major outgoings then I would say that you are in a fantastic position and should work steadily to build up as large a cash deposit as possible for that eventual family home, however far down the line that is and at the same time start building your pension. These are the two crucial things.

Punting on the market is really something to be done at a much later state but the reality is that each time you think you are getting to that point then things crop up to scupper your plans, like kids etc.

I know I probably sound immensly boring but the generation below me is going to have real issues going forward paying off the debt pile of the UKPLC. It's not likely to be the same kind of free ride due to asset inflation that benefited the baby boomers.

Focus on building a big home deposit and a steady pension and everything else will slowly tip into place.

You sound very lucky to be in the financial position that you are in and I just wouldn't risk changing that.

[ShadownINja]

There was a thread about a week ago on trading.

Progressive said:

just a bit of fun

It was exciting initially. Like betting on horses, I suppose (never done it). Nowadays, I find it quite tedious. Like fishing or golf. At the most basic level, just wait all day for the right price level, enter, wait for target or stop to be hit, wait for another entry. It's a game of patience.

http://www.youtube.com/watch?v=MSgnf-tBN9s

Edited by ShadownINja on Wednesday 21st April 11:50

[CaptainSlow]

buy high sell low

eta sorry wrong way round

sell low buy high

Edited by CaptainSlow on Wednesday 21st April 15:44