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Posted: Thu Jan 25, 2007 3:02 pm Post subject: The Stock Market
I will shortly be coming into some money, some of which I want to invest. The amount I want to invest will be around about £1000 give or take a few quid.
Now, I was thinking about putting it on New Zealand to win the Rugby World Cup or taking it down Yarmouth Casino and try to double it on the Blackjack table but before I do anything silly with it, I was wondering what people's views on the Stock Market are.
People tell me that it produces a better rate than you will get with a Bank or Building Society but surely, like any form of gambling, you will only have a cat in hells chance of making a profit if you know what you are doing(or if you are very lucky).
As a gambler the idea of the Stock Market does appeal to me but as I know nothing of it, I might as well play Blckjack with it. At least I know what I'm doing there!!
Any thoughts welcome!! _________________ You're born with nothing, and better off that way,
As soon as you got something they send someone to try & take it away!
I will be interested to read what people write about this.
In my job (Investment Analyst), a large amount of it is to do with world markets, so any answer I would like to give to your question will take more time than I have.
What I would say (to be brief) is that most global markets have gone up in real terms for each of the last 4 years........history dictates that something can, and often does, go wrong every 5-7 years. Draw your own conclusion.
I think you'd have to ask yourself a few questions about what you want to do with the money before choosing to invest in shares :-
How long you want to be without your money ?
(i.e. instant access, 30 day access, years etc)
How much of a return your expecting ?
(i.e. interest every quater,/year then your money back or double, triple your money with the risk of loosing it all)
How much of a risk you want to take with it ?
(i.e. are you willing to loose it all, a little or none of it)
if you don't understand it, don't go anywhere near it. Otherwise you are on a hiding to nothing.
If you want long term growth then yes, putting £1000 into a Equity ISA will most likely out perform any high interest bank account but buying £1000 of an individual stock that you don't understand if most risky.
if you don't understand it, don't go anywhere near it. Otherwise you are on a hiding to nothing.
Thats the best advice you are going to get on this subject.
Just on a side note, when people start talking about six-year highs (Japan), and all-time highs (India, Hong Kong), that is the not the time to join in the party.
Timing is everything in this game, and a lot of knowledgeable people in this industry push their luck by chasing more and more gain.
If you want to invest in the stock market, I would say minimum of 5 years, (however the dotcom crash broke this rule)
You could buy into investment trust shares, they buy many shares of different companies in different sectors etc, there are many Investment Trusts, you need to do a little research .....
If you have any doubts about the stock market then invest it somewhere else, but not the casino..
Jimbob, the effort that it would require to play the stockmarket with £1,000 (in terms of acquiring the knowledge, following the trends and so on) would probably not be worth your while, unless you look on it as an introduction to stock market trading and as a sort of education fund! You could get rid of it very quickly, or double it ditto, on forex trading.....
There are three possibilities - spend it on a trip somewhere (you could get rid of £1,000 easily doing Cheltenham in luxury!), or an airfare to the States, or on something you have always wanted.
If you MUST invest it, put it in an ISA or a mini-ISA (consult your bank manager, who will be only too pleased to advise - the advantage of ISAs is that they are tax-free.) If you're feeling daring, ask your bank about investing it in high-risk global funds. I made a fair whack on trading in spice futures in the 80s when the markets were volatile; this is high risk because political stuff (revolutions, wars, massacres etc) can play havoc with the markets - I did well in allspice and cloves but very badly in fenugreek and cardamom, and extra badly in ginger because the highest quality comes from Sri Lanka.
If you think you can parlay it into £2,000 at the tables, then by all means do so - but make sure you enjoy the process. I would suggest, as a "conservative" punter, that you allow yourself £500, keeping back £500 for an airfare or similar. That way you possibly get the best of both worlds, or at least the best of one of them!
As far as the stock market is concerned, I would avoid it unless you are prepared to put the time and effort into learning about it and how it works, much like studying form.
Hope that helps! _________________ UNEXPECTED WINNER 2009 FLAT 10 TO FOLLOW COMPETITION!
In terms of buying an individual stock, i'd say that it is never worth spending less than £2000-£3000 on each stock.
This is due to the fact that by the time you have paid buying/selling commission and have traded at the respective buying/selling prices, it is very hard to make any real profit (as a % of your investment) with such a small initial outlay - the commsions/differential in buy/sel price erodes a lot of profit with small outlays.
"I will shortly be coming into some money, some of which I want to invest. The amount I want to invest will be around about £1000 give or take a few quid."
I take it from this statement you are actually getting more than £1000 but you want to invest just £1000. I would say go with the safe New Zealand bet what else will pay you 70% Interest in 10 months.
I used to buy/sell shares but it is slow and unadventurous and you need alot more than a £1000 to see any worth while advantages in short term advestment. ISA's etc are just no goers for me as i cannot see how such a small amount of interest over such a long period of time really gets people going i mean have people never heard of the phrases you only live once or speculate to accumalate.
About 10 years ago i bought alot of Gold(real gold not English sh!te) when the price was pretty low i sold it some years ago and made about 50% on everything i had bought, my wife kept a few pieces as they do necklace etc. but got rid of the rest, not really sure what price Gold is now i know it got very high a couple of years ago but not sure where it is now.
Anyway if you have already put some aside for a proper holiday like Jenny suggested then i would come up with your own investment stratergy on something that you are already interested in
Gold is pretty high right now but will only get higher in the next year due to the uncerainty of global markets right now. Gold is a 'safe' option and has historically done very well in times of uncertainty.
With inflation and interest rates on the up around the world, and the possibility of a recession in the US in the next year or so, Gold will DEFINITELY go up this year. I reckon at least a 15% increase this year (thats a pretty conservative estimate). So although its a pretty boring mode of investment, its probably a good combination of being safe and lucrative at the same time.
Of course, i could be wrong and markets are unpredictable but i reckon Gold is as safe as it gets right now.
Regards
Owl
PS - Yes i am an economics geek (Hence 'Owl of Minerva' )
Thanks for the advice people. One thing I forgot to mention is that I do have shares already. I have a small number in Leeds Utd and I have a slightly larger number(but still quite small) in The Falkland Islands PLC(don't ask! A moment of madness on my part).
I may do the New Zealand bet. I did something similar a few years back when I put a large sum of money of Ferrari to win the F1 Constructors Title(it was a safer bet than Schumi to win the Drivers Title and the same price of 4/5) but am much more confident in my knowledge of F1 than rugby!
I like the idea of high risk global funds and also quite like the idea of Gold so will have to do some research!! _________________ You're born with nothing, and better off that way,
As soon as you got something they send someone to try & take it away!
Jimbob, just bear in mind that NZ often go into World Cups looking unbeatable but always find a way to screw things up!
However, i'm no massive follower of Rugby so it could be that they are on a different level this time around- then again i'm sure people have said "But this time they'll definitely win" before and been wrong.
Winning big tournaments is as much mental abilty as anything else and this is an area i'd be slightly concerned about.
Has a gambling element but you don't loose your stake !!!
What I'd do with a grand !!!
I've already got Premium Bonds. I have had them for 9 years and haven't won diddly squat so am beginning to think they are a con! _________________ You're born with nothing, and better off that way,
As soon as you got something they send someone to try & take it away!
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(Hence 'Owl of Minerva' )