buying shares with £200, for a complete novice....
Discussion
good afternoon all
a friend of mine invested £1000 into a bank by buying there shares @approx 40 each when they were around £6 each before the credit crunch!!
now we are in a hung parliment i understand shares etc are likely to follow and with a spare £200 i wouldnt mind some shares myself.
now i know its bugger all money, but you have to start somewhere right? but the other issue is i know sweet fa about stocks,shares etc.
all i want to do is buy x amount with RBS (53.5p a share iirc) and take it from there, im not expecting to make aloy quickly etc just wondering what is the best, and cheapest way of doing this?
thanks in advance
a friend of mine invested £1000 into a bank by buying there shares @approx 40 each when they were around £6 each before the credit crunch!!
now we are in a hung parliment i understand shares etc are likely to follow and with a spare £200 i wouldnt mind some shares myself.
now i know its bugger all money, but you have to start somewhere right? but the other issue is i know sweet fa about stocks,shares etc.
all i want to do is buy x amount with RBS (53.5p a share iirc) and take it from there, im not expecting to make aloy quickly etc just wondering what is the best, and cheapest way of doing this?
thanks in advance
mcflurry said:
TBH the commissions, spread and charges (Stamp, PTM) will wipe out a huge chunk of your £200 before you start investing.
^^ He's not wrong, why not get an account with IG Index? No tax, no dealing charges apart from the spread....If you're not risk averse I would suggest this was a better way to go with that sort of sum of money, no offense, obviously....
HTH - Nick.
NicoG said:
mcflurry said:
TBH the commissions, spread and charges (Stamp, PTM) will wipe out a huge chunk of your £200 before you start investing.
^^ He's not wrong, why not get an account with IG Index? No tax, no dealing charges apart from the spread....If you're not risk averse I would suggest this was a better way to go with that sort of sum of money, no offense, obviously....
HTH - Nick.
You can set a 'stop' which will basically stop the transaction if it loses a certain amount of money (So I could say stop if it gets to -£100)?
But the risk is that sometimes that the bet could always recover so if you set your stop too low you might just stop at a small fluctuation before an increase?
Lefty 200 Drams said:
yes i really need to start doing this, although not £200 all in one go....NicoG said:
mcflurry said:
TBH the commissions, spread and charges (Stamp, PTM) will wipe out a huge chunk of your £200 before you start investing.
^^ He's not wrong, why not get an account with IG Index? No tax, no dealing charges apart from the spread....If you're not risk averse I would suggest this was a better way to go with that sort of sum of money, no offense, obviously....
HTH - Nick.
sorry but im an absolute novice on this, what is IG index and spread betting?
t84 said:
Ahh, so that's where the risk is, I can imagine people forever increasing their stops thinking that it'll recover, and it never recovering?
You're exactly right - when I started the biggest mistake I made was ''s
tting myself'' when a position showed a 'large loss' I'd tend to close the position and lose 20 or 30 quid when later that week or even day I'd have been able to bank 50 quid !!What you say about setting the stop too close to the opening price is without doubt correct - it's far too easy to be stopped-out by an up or down spike which was actually totally irrelevent in the scheme of that day or hour.
My best advise to a beginniner would be to:
1 look longer term say three to six months ahead and live with the extra spread that brings, the extra is tiny in reality.
2. be prepared to accept you might be showing a loss for a long time. Let's take a VERY topical example: Desire Petroleum, when they dropped off from 100p I bought at around 55p, 15£/point. When they went down to ~37p I was then around £240 down !! and crapping myself. Take a look at DES today - I closed the trade earlier today @ 93p which means my profit was (93-53)*15 = £600, tax free in my pocket.
If I did what I used to do, I would have bottled it and written-off the £240 or whatever. Understandably I am glad I didn't.
BE PREPARED TO LIVE WITH BEING DOWN - You'll never time the bottom or top perfectly and If you can I wanna know about it !!
rich85uk said:
NicoG said:
mcflurry said:
TBH the commissions, spread and charges (Stamp, PTM) will wipe out a huge chunk of your £200 before you start investing.
^^ He's not wrong, why not get an account with IG Index? No tax, no dealing charges apart from the spread....If you're not risk averse I would suggest this was a better way to go with that sort of sum of money, no offense, obviously....
HTH - Nick.
sorry but im an absolute novice on this, what is IG index and spread betting?
They offer a 'bid' and an 'offer' price on all kinds of financial markets; indices, shares, forex, even house prices. Last week I made £12 by betting with them on how many seats the conservatives would have!
The difference between the bid and offer prices is the ''spread'' and is where they make their money.
see their website for examples of how it works.
You can start out with them being able to bet at only 10p per point on most instruments whilst you get a feel for it.
Beware though, it's very addictive!
Nico
t84 said:
Ahh, so that's where the risk is, I can imagine people forever increasing their stops thinking that it'll recover, and it never recovering?
you can trade without a stop, it gets very interesting then when you want to close you rposition during a frantic market but IG isnt playing ball 
okgo said:
t84 said:
Ahh, so that's where the risk is, I can imagine people forever increasing their stops thinking that it'll recover, and it never recovering?
you can trade without a stop, it gets very interesting then when you want to close you rposition during a frantic market but IG isnt playing ball okgo said:
I've done it yes, but I was scalping (I think that's the term) and I was in a great winning position, I wanted out ASAP, but it wouldn't do it, and I ended up being at the bottom of the forthcoming drop before I could close. Was annoyed
Sometimes I think there are dark forces at work, or to put it another way, the platform 'knows' when you're in a precarious yet winning position and makes things a littlel harder than they might otherwise be. Same thin once happened with me and Apple, one second up £200 next down £120, doesn't take long with apple at their value !!I wouldn't spread bet for this one.
I got the impression that the OP was intending to sit on the position for some time.
As such, the funding element of the spread bet, ie the rollover fee, will erode any potential gains.
I also wouldn't look at RBS as it is state owned and we are just about to get a new Govt, which may only last less than 9 months and no one has published what they will be doing with state assets. The Govt will need cash and they will be looking at bank stocks to realise this cash. That means perpetual downward pressure.
At the level being discussed and the current market timing it is nothing more than a pub bet.
I got the impression that the OP was intending to sit on the position for some time.
As such, the funding element of the spread bet, ie the rollover fee, will erode any potential gains.
I also wouldn't look at RBS as it is state owned and we are just about to get a new Govt, which may only last less than 9 months and no one has published what they will be doing with state assets. The Govt will need cash and they will be looking at bank stocks to realise this cash. That means perpetual downward pressure.
At the level being discussed and the current market timing it is nothing more than a pub bet.
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