UKC

I am keen to start investing some money to ideally make a bit of money. It would be a hobbey with a small amount of money and not a living

I am interested in the way people invest in markets and stocks

Can anyone recommend any books or on line courses that would help my understanding

Google is your friend.

But, before you even commit to spending a penny, set up a training or play account and use it for months, see how it goes. 

Only invest in sectors you understand and are interested in, as you need to spend some time researching and there is no substitute for knowledge. 

Learn what sort of person you, are you risk averse and don't commit to an investment long enough, or are you an internal optimist and will hang on hoping for more profit when you should bail out happy with the gains you already have. Leave a little profit for someone else is moto worth considering. 

It is a minefield in all respect, so be very cautious with your hard earned cash.

Finally, be wary of forum talk, plenty folk out there looking to talk up or down shares for their own gain. They'll sound credible, claim a friend works for x etc.. big pinch of salt required.

I'd also add you need to spend time keeping up with what's happening.

I've lost out lots of times by not knowing what's going on in the market until it was too late. I was simply busy living the rest of my life.

Perhaps not a helpful answer, but every time I’ve thought about it I’ve wandered back to p2p lending (with Ratesetter) instead.

Obviousky make sure you use your full remaining ISA allowance with a self-select stocks and shares ISA to avoid paying tax and perhaps therefore avoid having to do a self assessment return.  

If you are within about 15 years of retirement and a higher rate tax payer I'd just put it into your pension

Edit, just reread to see that you want to do this as a sort of hobby so you should disregard my advice - what you want to do seems much more interesting!

Check out Monevator.com, it's been a great source of info for me.

Most people I know who work in Financial Research use simple index tracker funds for their own investments. This is generally down to the difficulty of discerning a fund manager who can reliably 'beat the market', from one who has just been fortunate - as fund managers who are not fortunate tend not to last very long. It's a classic example of suvivorship bias.

Of course, while that might be appropriate for a pension or ISA, if we're only talking about a small amount of money then you can be more adventurous.

I would recommend John Kay's "The Long and the Short of It" to anyone considering managing their own investment portfolio.

BET365 is my first choice for financial investments!

I use an app called etoro. It's a social trading platform, so loads of forums and posts to go with it and sometimes good nuggets of information. One feature that I really like is the ability to do copy trades. You can essentially just load some money to your account and then find another trader to copy and let them do all the hard work. There's a few guys that have consistently managed over 50% returns per year, so should be fairly safe bets. You can cooy a few different traders so as to hedge your risk a bit.

Just don't do what I did and take all your profit and buy gold with 100x leverage and lose it all.

Please no... etoro and the likes are complete scams. It’s betting disguised as investing. Do not try. You are better off going on betfair.

speaking of Betfair, that sort of speculative investment shouldn't be dismissed out of hand. If you're interested enough in sport to follow a football league, for example, perhaps buy tips from pundits, you can make a decent return on your investment over a season.

General question, how much have tracker funds made in the last year?

I started by reading the Financial Times Guide to Investing by Glen Arnold.  It's a good overview, explains much of the jargon and highlights some kinds of investments (e.g. ETFs) that I hadn't heard of but which might suit what you want.

General Question - Answer.  My HSBC index tracker (within an ISA) is up 11.24% in the 12 months to 31 December 2017.  Investment gain only, no contributions.  I guess just beating the market if you take 7% growth in the index + 4% dividend.

Some more hard data and points;

• My pot is up 13.18% in the 12 months to 31 Dec 2017 adjusting for contributions
• Mainly funds or "funds of funds", best gain 23.79% (Asia) worst 1.19% (Colin Woodford!)
• Platforms (Hargreaves Lansdown is a good example) provide an easy was to manage any investments online - at a (modest) price.
• Use ISA and pension allowances to the maximum.

It depends what index you're tracking, and how good the tracker is.

My FTSE 100 tracker with Deutsche Bank is up about 10% over the past 12 months, (11% less 1% costs). The FTSE itself is only up about 6.7% over the same period, which makes me question the quality of the tracker, though not the contribution to my Pension.

That's better than  how Deutsche themselves  have faired over the past 3 to 4 years!! They are barely afloat.

I've been impressed with Hargreaves Lansdown for a stocks and shares ISA. Vast choice of funds plus shares etc. Fees for investing in funds tend to be very heavily discounted. I also use etoro for for the higher risk side of things (i.e cryptos).

I agree about HL, very user-friendly website and if you do need to call / secure message then very helpful and quick.   There own funds of funds have very low costs although of course you are also paying the cost of the underlying funds.

I agree. There is money to be made on betfair, being an exchange and not a bookmaker. So many people bet through loyalty to their footie team etc.. 

Open a pension. Not only will you be investing money for the future you will get tax relief. Every penny of money you put into a pension will be multiplied by 1.2 or 1.4 of you are a higher rate tax payer.  Money will of course be locked up until 55 but over that time it will multiply be several hundred percent.

if that's not exciting enough you can ask for the pension to be invested in high risk, high return funds.

Ignore every other piece of advice above unless you already have a pension that will keep you in comfort when you are old.

Matt

Warren Buffett says a good strategy is to buy some low cost trackers and then forget about it. The low cost is important as the ongoing costs slowly erode the earnings.

These trackers are inexpensive and have done well over the last 10 years:

HSBC FTSE100 ETF 0.07% cost

HSBC FTSE250 fund for 0.18% (the ETF costs 0.35%)

Vanguard S&P500 ETF 0.07%

You can buy them within a stocks and shares ISA (which probably charges an additional  0.25%). Or put them in a SIPP and get pension tax relief.

Sunday Times columnist Ian Cowie says that he had a 25% gain on a seven-figure pot in 2017.  He's certainly an active investor, seeking out individual shares that he thinks will perform well and as a financial journo would also have some inside track.  However one of his much repeated points is that it's not timing the market but time in the market that produces good returns.

Go for it. It is a fascinating hobby with many successful styles of investing.

As an introduction I recommend "Free Capital" by Guy Thomas which case studies 12 Private Investors and their respective  journeys to a style of investing that works for them. One of the conclusions of the book is that it took each of them about seven years to hit their stride which strikes a cord with my own personal experience.

The other classic investing books I've read are "Common Stocks and Uncommon Profits" by Philip Fisher (focus on growth investing), The "Intelligent Investor" by Benjamin Graham (The value investing bible).

A little livelier but still soundly based are "One Up on Wall Street" by Peter Lynch and "The Naked Trader" by Robbie Burns.    

1.25 and 1.66 (if you claim) but you lose some of it again in tax when you take a pension. Best effective rate is 1.06 for basic tax.

Learn how to to protect your money, stop losses have saved me from some very costly errors.

How do you work that out?

Etoro is not a scam, it is a regulated CFD trading platform. I trade Forex and commodities using this website, IG and plus 500.

All investing is a gamble, property, land, stock, bonds no guaranteed outcome. At least with forex you can apply technical analysis and the influence of fundamental macro economics. Gambling as in bet365, is just that, gambling....a roll of the dice.

And don't try to trade stocks using technical analysis, much better suited to a fundamental long term approach, too much gapping in price occurs due to unforeseen events, chairman resigning, factory sets on fire, (random things)

Hello, if you are interested in CFD trading, primarily forex and commodities a website called baby pips.com will give you a good basic grounding.

Tracker fund. http://fortune.com/2017/12/30/warren-buffett-million-dollar-bet/

A rising market floats all boats.

There's some rather mixed quality advice in this thread!

Running a shadow/dummy/play account is a good shout.

John Kay's book is also good.  You might consider complementing it with this: https://www.amazon.co.uk/City-Expectation-Machine-Institutional-Investment/...

I read this when I first became CEO of a listed company.  It highlights quite well the discrepancies that can arise between the actual worth of a company and it's market capitalisation and how the city processes drive this.  That translates as extensive risk for small investors.

Forums have far too many vested interests to be helpful on specific stocks/investments.

Amateur stock pickers (investing by choosing a smallish number of individual stocks) generally lose.  The market makers are waaaaaay waaaay way (way way) more knowledgeable and experienced than them.  There's lots of rather depressing research that shows this.  the reasons are briefly:

- the cost of each trade on a small base is corrosive

- the market knows key info ahead of your ability to know it

- small investors rarely calculate value well

- small investors rarely have clear strategies/rules and, even if they do, they don't follow them

- small investors can't spread risk as effectively without the trading cost destroying the value.

The reason many small investors will deny all this is that in positive markets, everyone is seeing values increase - so they all think they are doing a great job.  The FTSE grew 7.6% in 2017 and returned 125 (once you add dividends).  So people saying they've made 10% have actually lost out.  And then you see that the Dow Jones has risen 22%.

Therefore amateur investors often go for trackers or ETFs (like a stock that represents the market), although even this can be a fairly adventurous risk profile.  It means you can get broader exposure at lower costs than managed funds (75% of which underperform their index).  This is the route people go when they don't want to chase spectacular gains, but don't want to loe the market - classic long-term investing (for example for pensions).

Finally, you haven't given enough info for any sort of reliable comment.  How old, how much, what for, and what proportion of assets.  But this is not the place to get that comment - try an IFA.

Even more finally, I'm NOT an IFA. This isn't advice apart form this: do your own research; don't trust forums, including his one.

PS. Newbury 2.15 Mr Blue Sky

If you are asking these questions then you should go for the lowest fee tracker fund you can get. Which is basically a vanguard one on a cheap platform like their own or iweb (if doing a one off lump sum). Long term this has proven to the best bet in terms of effort:returns ratio. Pick a low cost fund or 2, put it in there and forget about it. 

Some very good advice in this post. As someone who has listed his business on the London Stock Exchange my advice would be that strong non-listed companies are much better run and more enjoyable to own a stake in than strong listed ones. By that I mean that they do not have to reconcile the demands of two sets of stakeholders, the investors (who want out at a profit or growth regardless of consequences) vs the staff and customers (who benefit from stability, continuity and quality of service). I resigned from the plc because I couldn't ethically continue to meet the avaricious demands of the institutional shareholders.

Of course, to own a share in a non-listed business, your only real opportunity is to set one up yourself. But this is the best investment you can possibly make. It's possible to return 10,000% on your initial stake in a short space of years while, incredible though this might sound, earning your business's profits in addition over the interim. The only catch is that you will need a good idea, be good at selling it, be patient for income and be ready for some serious hard work.

But if all you want is a bit of the "action", buy an index tracking ETF and the statistics prove that no matter how high the market on the day you buy, you'll show a profit 30 years from now.

I'd recommend CavendishOnline as route to get Fidelity Shares Fund ISA platform

https://www.moneysavingexpert.com/savings/stocks-shares-isas

Just remember, you cannot out-smart the market (the casino always wins). So don't try and time, just put in the same amount each month. Also don't try to pick winner (stock picking). I would recommending set up direct debit £xxx/month to a couple good solid funds (e.g. Artemis Global Income Fund). I did this with said fund and fund platform few years ago and sitting on some nice gains now. Do research on exact funds.

Aren't they playing the same market?

What you can't beat are the MMs and computerised trading algorithms. But you can beat other traders who are either less disciplined or rely on thin research.

Blue Horseshoe loves Anacott Steel. 

The statistics prove no such thing ! There is absolutely no guarantee whatsoever you’ll get a profit 30 years from now.

"Prove" was the wrong word in the context of the future but true in historical terms. There is no 30 year period since 1909 during which the FTSE shows a loss between start and end date. Proven fact which includes the crashes of both 1929 and 2008.*

*Source Barclays Equity Gilt Study 2009

Never mind that the FTSE did not exist before the 80s...

I suspect they may have taken all the listed companies on the London stock Exchange or something of the sort. In any case it doesn’t say much about the future.

Gut feeling but I wouldn’t play with shares right now. The massive rise in passive investing combined with very high level of debt tells me we’ll see major correction in the coming years and more volatility ahead.

Note

https://www.reuters.com/article/us-funds-blackrock-passive/less-than-18-per...

I won't bother looking, but I bet part of the current highs in the ftse100 are purely down currency fluctuations and which currency they report profit and issue dividends in. The ftse250 is likely to be different and AIM even more different again. Also whilst some sectors will be riding high, others won't be. So it's not quite as simple as saying they'll all crash soon, fluctuate of course, when haven't they.

I wouldn't day trade just now because politically things are pretty unstable with too many loons in power and you never know what they'll tweet or change next overnight. But longer term investments as part of balanced range I don't see as so risky.

Food for thought. Norway's sovereign wealth fund... under performing due incompetence and interference by government officials. https://www.bloomberg.com/view/articles/2017-12-04/how-not-to-run-a-soverei...

Some tell you 20% some tell you 30%, in any case it’s absolutely massive. It just increases the risk in the system.

Actually I find the “balanced” investment options seem to me to be by far the worst for most people, sure you get decent returns but you still stand to be wiped out in case of crash.

I find that a barbell strategy works best, put 90% in very boring, very safe stuff such as gov bonds or cash, and 10% in ultra high risk, and options against the market.

This way worst case scenario I lose 10%, best case scenario I make a killing. 

 What do have in mind! 2008 only saw a top to bottom loss of around 50%, which was quickly recovered. Hardly a wipe out. Short of total global collapse, balanced seems pretty secure, if boring over periods of years.

Lol, sure the stock markets overall has recovered, doesn’t mean there aren’t many dead corpses on the battlefield.

My office of full of “smart” people with so called “balanced” pension pots which were worth 2 millions pounds in 2008/9 and are now worth a tenth of that and there is little chance it will recover. I, on the other hand, made an absolute killing at that time.

It depends what you want, do you want to make modest returns with your life savings, with a small but non negligible risk of being wiped out, our do you want to make sure that first you won’t be wiped out, but still want to take the upside if there is any ?

A balanced £2m pension pot pre crash would have been worth £1.5m immediately after the crash (the fixed income half would have stayed mostly intact, the equities part would have halved). If your colleagues 10 years later have only £0.2m in their pots, not only were those not balanced portfolios in the first place, but goodness knows what they've been doing during a prolonged bull market.

By all means explain how you made a killing in '08. Always interesting to see how others coped. It was a frightening time.

Without sounding like a Knob, a genuine question.....how did you make a killing in the 2008 crash? You were 16/17? You must have had previous knowledge of the markets to be able to open the relevant short positions?

Sorry, by balanced I meant spread across a range of investments of differing risk, not just a range of shares. 

I smell something here.

The only way you could sustain that level of loss would be if you were investing purely in a few very specific banks or house builders. So they clearly weren't balance at all. 

I took a small hit in that era with a few punts that I knew were high and money I was essential throwing on horse. One being Connaught, they were cheap also certain to collapse, but if they recovered would be very nice. That's trading but I only put a tiny fraction of money in and not a whole pension pot. 

Edit. Have you considered they were just bad investors and blamed the crash?

Hummm no... unfortunately I’m not that young, but I like the fact that you seem to think I am !

No previous knowledge, didn’t see it coming, I just knew that this type of disastrous event happens. Mostly I made money on a variety of put options I had, and the fact that the ultra safe and boring stuff I was in shot up in value as everybody sought shelter.

When it comes to my life savings, my view is, the priority shouldn’t be to make money, the priority should be to not lose them. That’s why I typically put most of my money in the safest stuff possible. And then I put a small portion in risky stuff I really know, so I still get an upside if there is any. I don’t make much money on the long term, but whatever happens, I survive.

If I want to make money, the easiest way is to work, I find.

It doesn’t mean I’m risk averse, on the contrary, I’m happy to take risk it’s just that I don’t want to be wiped out when lose. Hence why I don’t like the “balanced” approach. Most people have most of their pension money in “balanced” pension pots, thinking it’s safe. It’s not. You can lose it all.

Apologies Rom, your profile says you are 27, thanks for the explanation.

To be fair a lot of them are ex-RBS employees who had so called “balanced” pensions pots through their employer. Most went for it because they were given a massive discount.

Turns out the “balanced” portfolio was in fact made mostly of RBS shares or RBS related shares.

Haha. Balanced indeed. Between RBS shares on one side and RBS derivatives on the other, then.  Ouch!

At any other time ... I would agree with many on this thread - based on what you have said, your experience etc ... you might be best suited to a handful (6-8) of Index Tracker funds of the ETF variety (significantly cheaper) via a low cost supermarket.  MSE should be able to sort you with setting that up.  Make sure you use your ISA allowance this year.  Do a bit of reading and reassess what you really want/how much effort you are willing to put into your hobby (how much you can stomach things going up and down). All of US, Europe and China (the big engines that drive the world economy) are in sync and doing well right now.   The year got off to a bang ... my portfolio is up 3.55% YTD - woohoo!  

Google - ETF's before you dive in.  If you're going to want to play at being a trader and trade regularly they are not what you want to be in.  You pay when you buy and sell these things - it'll erode your returns.

Be careful.  There is a bear market coming and you won't see it coming till you're in it.  Average loss in a bear market is something like -30%, however best returns in a bull market can sometimes be found near the start and end of the run.  My point:  The markets are expensive right now (we are somewhere near the end of the run) and a loss of, on average, ~30% is coming.  Passive Index Tracker funds will, by definition, follow the market down when the inevitable correction comes.  It might not be a brilliant time to buy into index tracker funds although, it appears, you'll certainly see +'ve returns in the short term. #buylowsellhigh

Personally I don't think a bear market is coming in 2018.  But it's probably a year not to be taking on piles of risk.  Depending on how the year pans out ... I can't see me with more risk on my profile at the end 2018 than I do right now at the beginning.

Ignore 99% of tips/hot stock/what's in vogue.  You've already missed the boat.  You're buying sucker stock.

"try to be fearful when others are greedy and greedy only when others are fearful”  Warren Buffett, 2004