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PAUL1
24-01-2003, 07:55 PM
IS ANY ONE ON THIS MASSAGE BOARD CONSIDERING INVESTING IN SHARES LISTED ON THE MARKET DO YOU THINK IT HOLDS THE SAME RISK AS STARTING A BUSINESS

HSS
24-01-2003, 09:20 PM
I've been investing for a while now, and recently bought a few shares in Barclays. I personally beleve there are bargains out there, but the whole Iraq issue, more the talk of war, when it is and how long it is, is making matters worse. If you do want to invest now, I would say invest 'a little', i.e. don't put all your savings. Also track a few shares, see how they do, then decide. Whatever you choose, Good Luck!

austin
24-01-2003, 09:22 PM
Hello Paul,
Investing in market shares (plcs) always carries a risk.

Risk very much depends on which share you are interested in, the sector they are into, their market capatalisation (combined value of all shares owned), the economic cycle etc.....

Sorry this is a really useless answer but......
As to whether it is as risky as starting a business depends on the business you're starting, and the share you're buying!

If you are investing in a large company, regularly taking in cash, sales have been rising for ages, the price is not too volatile (smoothly increasing with respect to the market) is is much lower risk that starting a new business

If you are buying an AIM listed company (alternative investment market- young companies with speculative growth) it is extreamly risky

bye
Austin

PAUL1
24-01-2003, 09:59 PM
I recently invested in shares and bought tesco at £1.80 i believe it is a stonge company and it,s share price undervalued i also am considering barclays to add to my portfoil i am also interested in ishares and buy across the whole index i have started to invest money in the market slowly wish you all the best with your barclays shares and hope you make lots of money good luck

Peterm
25-01-2003, 03:23 AM
Hi,

Yeah, I have Just bought some Legal and General Shares at 75p. They Look good value to me!

The general market is being hit at the moment. Good shares and bad shares are going down.

But! They must go up some time. the point is when. It is like catching a falling knife. My plan is to invest for the next three to five years so hopefully that will be okay.

Only time will tell.

As for percived ridk of this compared to your own business.

I think the stock market is lesss risky. You should only invest what you can afford to lose. But, with your own business, there is the emotional factor to consider.

At what point are you going to call it a day. It is like a baby to most of us. We would not want to see it die! But, commercial reality should prevail.

Peter

Daniel
25-01-2003, 11:14 AM
Hi,

I am an investor in the stock market.

The only way I got into it was due to me selling a couple domain names when the market was strong for them, I made £16,000 so I invested into strong companies that for some reason or another, their price has fallen dramatically. Then I invested and made money that way. Its all about research, do you research and wait until you think itís the right moment to invest in that company.

Recently I invested into a company called Medisys a medical equipment distributor. Their share price was around £0.92 then they decreased in value down to £0.06, so I bought in, they then increased to around £0.26. I made 4x what I put in. Now their share price is back down to 12p recently increasing from 7p.
The same thing happened with Marconi. Their share price was £12, and went down to 1p now they are 10p and climbing slowly.

There is defiantly money to be made at this game like I found out, BUTÖÖ also huge risks, like I said do your research, which I see you have done already regarding Tesco and Barclays.

Its upto you what you want to do with your spare cash, either use it for a business or shares. I think that investing into a new business venture is more safer than the stock market, but you have to think about it this way. If you start a new business you will be basically putting all your eggs into 1 basket to get the capital or you may need a loan to start up. If you want to play the stock market then you will need spare cash. If you only put in to shares what u can afford and see how it goes your not risking your house, car basically whole family. Donít get me wrong though, playing this market has a lot of risks.

Anyway, Its upto you. But think about it wisely.

Thanks for reading the large post.

Dan

HSS
25-01-2003, 10:00 PM
One of the most bizarre share prices is oil giant BP. I personally believe that it should be £5 per share minimum. The whole Iraq issue should have pushed the price up (Less supply - higher price) but for some reason its trading at about 380p, which is daft. The company makes profits of nearly £10bn a year, and has sales of about £140-150bn or something. I've been looking at this for a while, I sold my shares for about 416p and made a small profit. Another share i've been looking at is Abbey National. It used to be £10 - £13 but now its drifted towards 400p, which is a very healthy dividend (I think it paid 45p-50p a share dividend last year), but it's going to cut it. Anyway good luck with your investments and keep us posted.

Dedsoldya
26-01-2003, 04:36 PM
actually if there is less supply then less people will be able to buy the oil.e.g. 10 people pay £10 for oil=£100.
The oil supply falls and the price bumps up to £20, if people dont want to pay this for oil and only 4 people buy oil, then only £80 is made. However oil is somewhat of a necessity and the price therefore inelastic, (a percentage change in price will be larger than a percentage change in demand. The stock market is a funny thing, share prices fluctuate in line with the city and what the city want. Banks maybe ok now, but what about the current debt problem, will people be able to pay off loans and will the banks lose money. Blair and bush are messing up the stock market, the war in Iraq is the main cause for share prices going down. If anyhting invest in commodities and tobacco stocks, people will always smoke. My advice though, would be to wait untill the war in Iraq issue has been terminated.

DavidHa
27-01-2003, 10:28 AM
Hi Paul,

The stock market is a great way of keeping you on your toes, dependent on how much time you want to devote, and how much money you want to gain/lose.

If you have the time to day-trade, i.e. check your portfolio and making transactional decisions at least eight times a day, great you can run the risk and reap the rewards offered by the current turbulence in the market, otherwise you'll need to look at long term investments with lower risks which you can monitor daily, weekly or monthly.

Avoid spread betting unless you have cash to burn.

The alternative investment market (AIM) is a great place to look for winners, keep up to speed with the FT, or at least a weekly copy of The Business or similair Sunday broadsheet.

If you have the time get an online account, I use Barclay's who offer a great service.

Remember when buying or selling, do one or the other, never both. Take your losses as lessons, your profits as rewards. Do your homework, a lot of listed companies provide free reports, there's a great calculation called the dupont measure which gives a good measure of a companies value, don't always believe the value put on a company by the market makers.

Above all, enjoy it, if it stresses you out you're either staking too much or not learning from your mistakes.

David

mkrb
27-01-2003, 05:25 PM
is there any way to get into the stock market without lots of money, say for arround £100? More for a hobby than making lots of money

I have looked on a few websites and some say a minimum deposit of £1000. Any good websites would be appreciated.

Thanks

Michael

DavidHa
27-01-2003, 05:31 PM
Hi Michael,

With the charges for buying stocks usually around £5-15 per transaction, you need to be investing a minimum of £100 to get a return on your investment.

Most companies limit you to a minimum transaction size, either in £ or units.

For £100 you need to be playing in the AIM or with crash shares such as marconi and the like.

Why not try setting up a virtual portfolio to see if your nouse is good.

www.iii.co.uk will let you do this for free.


Stay In Profit!


David

Peterm
27-01-2003, 09:21 PM
Try IMIweb.co.uk

They do execution only dealing for £10!

As much or liitle as you want. There service appears to be very good. No complaints so Far

Peter

PAUL1
27-01-2003, 09:42 PM
you really need more then £100 pounds because you have to pay commission to buy and to sell there is also a speed on shares (bid/offer) and with some stock brokers there is a yearly change I use selftrade to deal share it,s around £12 to buy and £12 to sell if you deal with £100 pounds you would need your stock value/portfolio to increase about 30% and then you only break even
we are in a bear market at the moment and to see penny shares go from pennies to pounds which was common a couple of years back for example allot of technology shares rose from 1 Penney to £15 pounds is unrealistic for today's market.
good luck with your investing

austin
28-01-2003, 09:50 AM
Hello,
Don't just look for low commision. Some brokers will get you a better price than the market (comdirect amongst others). Even though their commision is larger, you still save more money by paying below market price

Don't forget you don't actually have to buy shares with £100. There are other ways to invest, and still get an ok return

bye

HSS
28-01-2003, 09:21 PM
Austin, do you use comdirect as well? Great minds think alike! I've been using them for a while now and they're pretty reliable.

austin
29-01-2003, 01:34 PM
Yes. I use comdirect. They do 'at best' orders when they will find you the cheepest asking price which is often under the quote on LSE.
They are also very realible, and owned by commerce bank securities (I think!)

Sadly, I haven't bought any shares for a while- I think you need to spend a reasonable amount of time educating yourslef (every week!) to keep track of things, and my degree project is taking up loads of time at the moment

Happy investing!
Austin

Dedsoldya
29-01-2003, 05:48 PM
you need about £500 minimum for some companies but £1000 for most companies, dont invest yet though, not after the IrAQ thing.

HSS
30-01-2003, 09:31 PM
After 12 days of heading South, the market jumps. The only problem is I never bought any shares, although my Barclays shares have recovered to the price I paid. Anybody buy any shares in a FTSE100 company in the past 2 days? How's your investment?

graeme_newcomb
31-01-2003, 05:05 PM
All said and done, the most objective (and quantitative) way to look at investing in stock market versus starting a business is too look at the risk-reward relationship of the two types of investments.

Any investment has a risk associated with it, and consequently an investor expects a return on their investment that reflects this risk - the higher the risk, the higher the return on investment that an investor will want.

A simple example is a savings account - the risk of investment is very low and consequently an investor does not expect a high return on investment in a savings account (less than 5% per annum in the UK). For a bond from a company with a good credit rating, the risk is slightly higher - an investor would expect to earn say 8% per annum on this kind of bond.

Now the stock market (looked at as a whole, not a particular share). Well, this is more risky as it is more volatile and investors would expect a higher return on investment. Historical returns on the FTSE 100 are around 18% (or close enough as of late 2000), and an investor would expect to get a return in this region if invested in the FTSE100 over a long-term period.

Ok, now starting a new business. Well, look at what kind of rate of return an investor would expect and this will give an idea of risk. As a starting point, what would a Venture Capitalist expect to get as a return on an investment in a new business - I would be surprised if they would want anything LESS THAN 25% return on their investment. I certainly wouldnot invest in a new business where the potential rate of return is above 30% per annum.

In summary - starting a new business is significantly more risky than starting a new business, but the potential upside is also greater!


Originally posted by PAUL1
IS ANY ONE ON THIS MASSAGE BOARD CONSIDERING INVESTING IN SHARES LISTED ON THE MARKET DO YOU THINK IT HOLDS THE SAME RISK AS STARTING A BUSINESS