Tesco shares

[a4cabrio]

I'm employed by Tesco and have the opportunity to invest some of my monthly wage into some shares, i'm only looking at putting in £50 but this is taken out before tax is paid on it.I'm not really clued up on this type of thing so just wanted to ask.

Also later this year I can take up another incentive where I can again invest £50 p/m into tesco shares, but with this one Tesco guarentees your investment wont lose so its kind of a good way of putting money aside for a rainy day, the period is for 3 or 5 years

Any advice appreciated

[Patch1875]

My wife does a similar share save with her work(RBS) at the start there is a set share price then she saves a set amount for 5 years (150pm) then it's paid at that time at the current price.

She has done well with it in the past (turned 5k into 9k) but the current one is just finishing but due to the share price being low she will get her money back.

You can't really lose with the worst case scenario being getting your money back and it's handy getting a lump sum every few years.

[a4cabrio]

Patch1875 said:

My wife does a similar share save with her work(RBS) at the start there is a set share price then she saves a set amount for 5 years (150pm) then it's paid at that time at the current price.

She has done well with it in the past (turned 5k into 9k) but the current one is just finishing but due to the share price being low she will get her money back.

You can't really lose with the worst case scenario being getting your money back and it's handy getting a lump sum every few years.

Wow, that's a great return, almost doubling your money, I'd be happy with any sort of return on my small investment.

The shares I am currently buying aren't risk free but the other one is, so as my partner works for Tesco also, we'll both go into that one, where as it's only me doing the 1st one.

Like you say in a few years down the line we should have a yearly return to look forward too.

Thanks

[98elise]

If its the traditional sharesave scheme, then its a no brainer. You save the money, then get the choice to buy the shares at the old price, or get your cash back.

I was very lucky, mine doubled over the 3 years I was in ours. I sold out though.....then the share price doubled again within a couple of years!

[Viper]

as above, as much as you can afford.
I have some in a final year with Virgin Media, Virgin sold out to the US giant liberty global last feb and they have now nearly tripled in value

[Mobile Chicane]

a4cabrio said:

Patch1875 said:

My wife does a similar share save with her work(RBS) at the start there is a set share price then she saves a set amount for 5 years (150pm) then it's paid at that time at the current price.

She has done well with it in the past (turned 5k into 9k) but the current one is just finishing but due to the share price being low she will get her money back.

You can't really lose with the worst case scenario being getting your money back and it's handy getting a lump sum every few years.

Wow, that's a great return, almost doubling your money, I'd be happy with any sort of return on my small investment.

The shares I am currently buying aren't risk free but the other one is, so as my partner works for Tesco also, we'll both go into that one, where as it's only me doing the 1st one.

Like you say in a few years down the line we should have a yearly return to look forward too.

Thanks

The second - ie. share shave option - go for it. You'll get your money back whatever happens, though possibly eroded by inflation.

The first option I'd think carefully about unless you are a higher rate tax payer and could sell immediately at a profit as a result of having paid for these from your gross rather than net salary.

Where do you think Tesco is headed as a business in the next few years? It was announced recently the company is planning to trim profit margins in order to offer price cuts to customers. I don't see discounting as anything other than a race to the bottom, unless operations can be streamlined to strip out costs, along the lines of Lidl / Aldi etc.

Presumably Tesco can't do this in a hurry, so the savings must come from somewhere: the producer's margin, staff pay and conditions etc, neither of which will be popular with the shopping public. Or dividends, which the City won't like.

Up to you, but I personally don't see the future as looking particularly good from a shareholder's perspective.

[a4cabrio]

Mobile Chicane said:

The second - ie. share shave option - go for it. You'll get your money back whatever happens, though possibly eroded by inflation.

The first option I'd think carefully about unless you are a higher rate tax payer and could sell immediately at a profit as a result of having paid for these from your gross rather than net salary.

Where do you think Tesco is headed as a business in the next few years? It was announced recently the company is planning to trim profit margins in order to offer price cuts to customers. I don't see discounting as anything other than a race to the bottom, unless operations can be streamlined to strip out costs, along the lines of Lidl / Aldi etc.

Presumably Tesco can't do this in a hurry, so the savings must come from somewhere: the producer's margin, staff pay and conditions etc, neither of which will be popular with the shopping public. Or dividends, which the City won't like.

Up to you, but I personally don't see the future as looking particularly good from a shareholder's perspective.

Some great advice, thankyou.

When I heard what the Tesco Chairmen had to say the other day I did wonder what will effect it would have on the share price, but at £50 pm it's not going to bankrupt me if it all went pear shaped so I won't worry too much, but the 2nd scheme looks the safer bet, just a shame it's a max of £50 pm I can pay into it.

[speedy_thrills]

a4cabrio said:

Also later this year I can take up another incentive where I can again invest £50 p/m into tesco shares, but with this one Tesco guarentees your investment wont lose so its kind of a good way of putting money aside for a rainy day, the period is for 3 or 5 years

Any advice appreciated

Sounds like a good deal but I put in a little caveat here that I recommended Tesco here back in 2008 and since then the company has really…went from one disappointment to another. If the shares don’t rise you’ll still lose to inflation and there is some lost opportunity cost so it’s still not a free ride even with limited downside risk.

ETA: I'd still be tempted in your position but I still don't follow any FTSE based companies so have little insight into if it's a good value proposition.

Edited by speedy_thrills on Tuesday 4th March 23:10

[Sideways Rich]

speedy_thrills said:

Sounds like a good deal but I put in a little caveat here that I recommended Tesco here back in 2008 and since then the company has really…went from one disappointment to another. If the shares don’t rise you’ll still lose to inflation and there is some lost opportunity cost so it’s still not a free ride even with limited downside risk.

ETA: I'd still be tempted in your position but I still don't follow any FTSE based companies so have little insight into if it's a good value proposition.

Edited by speedy_thrills on Tuesday 4th March 23:10

You are paid to wait though with the dividend, also they are curtailing their capital spending so limited risk that the dividend is cut/removed..