How do you buy shares?

donaghs

Can someone give a real life example of how you they have bought shares?
Possibly someone with expert knowledge could give a rundown on the various ways of buying shares, with as much detail as possible.

For example, I've equiring from friends about this for some time. The consensus was that the simplest way to do this was to arrange an appointment with my bank branch. When I phoned my branch they said I did not need to call in, but I could go to any branch. But I would need to fill in various forms for a broker, and would need photo id and proof of my address. The bank would act as an intermediary with the broker.

Tiesto

donaghs wrote:

Can someone give a real life example of how you they have bought shares?
Possibly someone with expert knowledge could give a rundown on the various ways of buying shares, with as much detail as possible.

For example, I've equiring from friends about this for some time. The consensus was that the simplest way to do this was to arrange an appointment with my bank branch. When I phoned my branch they said I did not need to call in, but I could go to any branch. But I would need to fill in various forms for a broker, and would need photo id and proof of my address. The bank would act as an intermediary with the broker.

Hi Donagh,
Im just getting into investments now so i wouldnt call this expert advise but i can tell you there is no need for the bank at all.
Like anything, the more intermediaries involved, the more expensive it will be.. Just go straight to the broker and setup an account with them.
Davy stockbrokers for example is one off the top of my head.

If this is your very first dip into investments, I think it would make more sense so look at funds rather than equities(stocks). I think
funds are a better way to ease yourself into investments because the risk isnt so great. Funds are made up not only of equities but also more secure investments such as government bonds, property investments (maybe not so secure afterall )
Not only that, the fund is made up of investments from different countries, different industries...
Instead of you going straight to the broker and purchasing shares in a couple of stocks you probably dont know that much about and having all your eggs in the one basket......

Ok im sure someone is gonna reply and correct everything I said, but hey thats my understanding so far...
no need to say thanks

Tiesto

donaghs wrote:

Can someone give a real life example of how you they have bought shares?
Possibly someone with expert knowledge could give a rundown on the various ways of buying shares, with as much detail as possible.

For example, I've equiring from friends about this for some time. The consensus was that the simplest way to do this was to arrange an appointment with my bank branch. When I phoned my branch they said I did not need to call in, but I could go to any branch. But I would need to fill in various forms for a broker, and would need photo id and proof of my address. The bank would act as an intermediary with the broker.

Hi Donagh,
Im just getting into investments now so i wouldnt call this expert advise but i can tell you there is no need for the bank at all.
Like anything, the more intermediaries involved, the more expensive it will be.. Just go straight to the broker and setup an account with them.
Davy stockbrokers for example is one off the top of my head.

If this is your very first dip into investments, I think it would make more sense so look at funds rather than equities(stocks). I think
funds are a better way to ease yourself into investments because the risk isnt so great. Funds are made up not only of equities but also more secure investments such as government bonds, property investments (maybe not so secure afterall )
Not only that, the fund is made up of investments from different countries, different industries...
Instead of you going straight to the broker and purchasing shares in a couple of stocks you probably dont know that much about and having all your eggs in the one basket......
Two popular companies offering funds are Rabodirect and Quinn.
The funds in rabodirect are 'actively' managed. Quinn funds are passively managed,
Definitions (from wikipedia )

Active management (also called active investing) refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming a benchmark index.
Ideally, the manager exploits market inefficiencies by purchasing securities that are undervalued, and/or (less frequently), short selling securities that are overvalued. Depending on the goals of the specific investment portfolio or mutual fund, active management may also strive to achieve a goal of less volatility or risk than the benchmark index instead of, or in addition to, greater long-term return

Passive management is where the manager does not seek to outperform the benchmark index. Passive management (also called passive investing) is a financial strategy in which a fund manager makes as few portfolio decisions as possible, in order to minimize transaction costs, including the incidence of capital gains tax. One popular method is to mimic the performance of an externally specified index—called 'index funds'.

Ok im sure someone is gonna reply and correct everything I said, but hey thats my understanding so far...
no need to say thanks

seligehgit

Hi guys,
Looking for advice on the steps,costs associated with trading on line.No idea,any good books?Just got involved in an investment club.
Selig:)

portomar

research, research, research. this includes reading the business pages and websites (tradermike.net, uglychart.com, traderfeed.blogspot.com, cnbc.com) daily over a long enough period will have you right up to speed on whats happening. i picked up the base knowledge from places like this but there is certainly quicker ways, but keeping up to date is of paramount importance.

failsafe

Hi guys,

I can tell you how I buy stocks and shares if it's of help.

I use an internet stock broker called www.zecco.com, but friends/workmates use www.firstrade.com, www.etrade.com etc. and all are quite similar.

Zecco offer free trades (there is a monthly limit, although I've never hit it so I don't know what it is, after that it's $4.50 per buy/sell, which is a fairly good price).

To set up an account, it's roughly similar to setting up a bank account. Just click "sign up" and follow the steps. You'll need to fill out and sign two forms, and post them along with a photocopy of an id (passport).

When you've got an account set up, you can wire transfer some money accross. This is the only step where I've ever incurred a cost with buying shares. I used to only be able to do it online with AIB, and they charged €15 per transfer, and I used to transfer roughly €1k at a time so it wasn't bad. BOI now offer €1 transfers on 365online so I use them (because I have my current account with them)

Once the money arrives in my Zecco account (usually a week after it leaves my BOI account) it's as simple as picking the stock(s) I want to buy, typing in an amount of shares I would like and clicking buy.

These American online stock brokers generally only let you trade on the american stock exchanges, which is fine by me. If you want to buy shares on the ISEQ (although alot of the big Irish companies are traded on the NASDAQ etc too) you could use an Irish Stock broker, or the one built into aib online. These charge €25 per transaction, and because I have no overwhelming desire to buy from the Irish stock exchange, I'm sticking with my free zecco account!

I'd reccommend anyone who's considering it to take the plunge. It took me a year of procrastinating before I eventually got around to doing it and I wish I'd started sooner!

rubadub

Say a companies shares were worth €1, i.e. as "published" on say aertel or online.

I buy €10,000 worth and in 1 years time they are worth €2 "published",


If I cash them in how roughly much profit would I actually make?

I realise my €10,000 cannot get 10,000 shares in the first place. And with buying, taxes, exit fees, selling, annual fee, etc. How much have would I have actually have made on them?

Just want to get a feel for the figure to compare to say putting it in a bank, and how much you REALLY get stung for, like people I know who think you just buy a house, goes up in value 20k, sell it and you make 20k, when you could well have lost money.

portomar

rubadub wrote: »

Say a companies shares were worth €1, i.e. as "published" on say aertel or online.

I buy €10,000 worth and in 1 years time they are worth €2 "published",


If I cash them in how roughly much profit would I actually make?

I realise my €10,000 cannot get 10,000 shares in the first place. And with buying, taxes, exit fees, selling, annual fee, etc. How much have would I have actually have made on them?

Just want to get a feel for the figure to compare to say putting it in a bank, and how much you REALLY get stung for, like people I know who think you just buy a house, goes up in value 20k, sell it and you make 20k, when you could well have lost money.

ok rub, if lets say the price of shares you bought doubled and you sold you would make your profit minus transaction fees (€25 each way in and out, €50 in all if with aib as above) minus %20 of the PROFIT to CGT, so lets say you made a €10,000 profit, - 2 grand tax, 50 quid entry and exit = 7,950. needless to say %100 return would be stellar. average return would, over a medium term kick the banks interests ass though

no annual fees with shares, you get a dividend cheque, you're thinking of a fund with a management fee.

highly

phone the client support unit (you don't have to be a client, you can just make an enquiry) in davy or go to www.davy.ie and look at the FAQs on that site. the mim commission for their phone account is €100 and for online €25, or €15 depending on how frequently you trade. you can have a nominee account (which is not risky at all and has more benefits - and is diferrent to the type of CREST accounts morrough used) or get a share certificate.

you need to have an idea of what companies you want to invest in - the financials, construction companies, airlines, food companies etc - as they will not give any advice unless you're investing over €100k.

Newcarneeded

I have been looking at the AIB online share dealing pricing.

Under ancillary charges there is a fee of €13 to transfer shares out (charge per line of stock). Can anyone explain what this charge is? It is a minimum of €40.

If i wish to sell a €2,000 holding of Bank of ireland shares for example, do they charge me a 1.25% commission on the trade, minimum €32 and an additional €40 as it is a sale? Of is this "transfer" fee a fee if i wanted to transfer the shares out of my online account and get a share certificate or something similar?

what2do

Hi - the transfer charge would the cost of moving your shares to another brokers ie from Goodbodys to Davys. Per line is per different holdings of stock you have on your account

Prowetod

Hi, just a few questions about investing shares.

1.Is there a minimum amount one has to invest?

2.Say I invested 1k in shares, 1 euro per share, then say the value went up to 2 euro, If I sold would I get all the 2000 - the brokers fees? Is there any other fees I should know about.

3. If I owned shares and wanted to sell them, would I have to wait until others wanted to buy the shares. Like does the process of selling shares take long?

4.Also is there an age limit to investing?

Any help is much appreciated

failsafe

1. Nope, but usually you have to buy one whole share in a company, so in theory the minimum amount would be the pice on one share in your desired company + broker fee.

2. That's pretty much it yeah. You could get charged a transfer fee, e.g. I invest in the US markets and AIB/BOI charge me about €15 to get my cash over there. All in all, in that situation, you should be able to walk away with over €1,900 (and then pay CGT, although i'm not too sure about how that works)

3. That's the "theory" of it, but in reality most transactions take split seconds to execute. I know my broker guarantees a transaction time of 4 seconds are less. The cash is then ready for me to withdraw/make another purchase at the start of the next business day.

4. 18 I presume, although i'm not 100% on that one.

Hope that helps!

Prowetod

Thanks failsafe.

Just a few more q's

What is the difference between Bid and Ask. Does one mean the cost price and the other the selling price

Bid 1.56
Bid Size 3,000
Ask 1.65
Ask Size 1,725

xebec

The Bid price is the maximum that somebody has made it known they are willing to buy for, the size is the number of shares they are willing to purchase at that price.

The Ask price is the minimum price that somebody is willing to sell for, and similarly the size is the number of shares.

The difference between the bid and the ask is known as the spread.

rubadub

portomar wrote: »

ok rub, if lets say the price of shares you bought doubled and you sold you would make your profit minus transaction fees (€25 each way in and out, €50 in all if with aib as above) minus %20 of the PROFIT to CGT, so lets say you made a €10,000 profit, - 2 grand tax, 50 quid entry and exit = 7,950. needless to say %100 return would be stellar. average return would, over a medium term kick the banks interests ass though

no annual fees with shares, you get a dividend cheque, you're thinking of a fund with a management fee.

Cheers. i forgot I even posted here. Just back looking with the current share movements. I have some in AIB am unsure whether to sell or not. I thought there would be gov taxes too, no? I heard a mate saying something about buying and selling shares in a short enough time, so you didnt have to pay tax (or something like that)

I also do have a managment fund, they are nice and upfront about the actual value (if I walked into the bank I would walk out the €x after tax & fees)

Gautama

I used to buy shares via a Goodbody Online account, but moved to ShareWatch when the former downgraded their service.
Haven't bought anything with ShareWatch (bear market and all that) so I don't really know what their service is like.

I do recall that the Goodbody service has a tutorial, which allows you try out how the online account works, without actually buying/selling any shares.
Give you a feel for how it all works.

portomar

i think there used to be stamp duty on buying shares but isnt anymore, cud be wrong on that one. In relation to cgt, or capital gains tax, you pay 20% of the profit on your buying and selling of the shares.you download the form from revenue and pay direct to them.if u are looking to make money buying and selling u could look into spreadbetting.try deltaindex.com for info.

runforcover

I'm new to this game but want to invest. I have been looking at INM over the last few months and am intrested in buying shares as i think they are now good value (+ I think D.O.B is a sherud fello and in 5/6 months prices will go up).I dont have much money (1K) but i want to start off low and build it up (hopefully).
According to RTE website the share price was €3+ in oct 07, €1.95 today and on way up.

My questions are
1-- if share price is 1.95 and i want 2 spend 1K, would i get 512 shares for the 1k , if so how much would the extras in buying shares come to.

2-- Would i have a physical share in the company (e.g. the only way i could lose my investment/stake in the company is if it were 2 go bust)

3-- What are the diffrent types of share you can buy, and could you give me a description of how they work , riskyness, profitability etc

could yous plz answer my Q's and if u are only able 2 ans 1Q i dont mind all thought and explinations are welcome
thanks
RUN

FA

It depends what shares and and what market you what to buy them on. Most of the large brokers Davy/Merrion/Goodbody will do it.

I trade through a sub broker - themortgagemakers.ie. served me well so far

Sgt Slaughter

Hi guys going to take the plunge and buy shares. Couple of questions.

1. Is the charge that people are saying (€25) was quouted called the commission charge? And is this taken for every transaction you make. I.e if i buy €10000 worth of shares in Company A am i charged €25 for example, and if i buy €5000 in Company A and €5000 in Company B on the same day am i charged €50 now?

2. Also with regard to stamp duty where is that paid, and is CGD automatically taken off you or do you have to be the good citizen and sort that yourself, also is CGD computed before deductions are made?

3. If this is all done online, do you ever get share certificates and how are dividends paid to you?

FA

Sgt!

The charge depends on the amount and the market you by shares on. Unless you are buying shares in the EURO zone you will also be charged a currency exchange charge!

The stamp duty is taken when the transaction is made- if you were investing !0,000E, the amount invested would be 10k less stamp duty less charges and less exchange rate charge if applies.

The CGT doesnt come into effect until you have actually made a gain, when you sell and make a profit.

The shares can be held in a number of different ways - most cost effective is in a Nominee account - the shares are held in the name of your broker, and the broker distributes the div. Getting shares certs issued cost money and time, both of which as as small trader you dont have. Its harder to sell shares when you have the certs, it means the transaction will take a few days to process, as you have the post the certs before the order can be confirmed. Not a good idea if you need to move quickly. Also you end up paying the cost of having the things printed and postage.

2 stroke

Hi all. My first post here but I've been lurking in here for years. Thanks for all the good advice.

I purchassed shares today, my first time dealing with sharewatch. I spoke to them and exchanged a couple of emails yesterday.
Today I transferred money into their cork account, then rang them, they confirmed that they recieved my lodgement & took my name address and phone number. I told them I wanted to invest in company x and to allow for their fees and stamp duty out of the ammount I transferred. Guy told me current share price, I said ok. He then confirmed that I had purchassed x number of shares at price y. Fee for transaction was €50, stamp duty 1%. I get share cert at no extra charge.
I didn't have to register or provide any type of ID other than my phone number. Registration is only necessary when cummulative transactions reach €15000.

serfboard

There's some useful information here.

2 stroke

Share certificate from my above post recieved 4th july 2008.

Slimbo

Hi All,

I have read through this post from first to last, very good information.

One question: who is the current best brokerage firm to go with.
I would be buying circa 10k in stocks spread over 1 to 4 companies and would probably make the same amountof transactions per month.

Any info would be great,

Thanks,

Slimbo

Tiesto

hey Slimbo.
I only have experience with Sharewatch and think they are great. Their cost per trade is extremely competitive if not the cheapest out there.
I have an account with sharewatch for 60 euro a year..And its 20 euro an execution.
Sharewatch also give you a free Crest membership so the shares are held in your name. Its a bonus as any documentation the company releases goes to you personally rather than the broker if they are holding your shs in a Nominee Account.

SamSpade

I'm a member of Sharewatch, but I haven't been able to access their website since 05 July, 2008 - nearly two weeks now. I get the following message (in italics below). This isn't the first time their website went down either. I've called them a few times but I'm not getting any real answers.

"www.directsharedeal.com uses an invalid security certificate.

The certificate expired on 05/07/2008 13:22.

(Error code: sec_error_expired_certificate)"

Based on Google searches, this type of error is usually caused by an incorrect date/time on one's PC, but mine is ok. The previous post to mine suggests that not everyone is affected.

Has anyone else had these problems?

paulocon

Looking to invest circa 2k in shares initially and invest a further 2k every 6 months or so. These would be long term investments (10+ years) - have money invested elsewhere and on deposit so trying to spread my investments a wee bit.

Looking around (and reading on here) and think that I'll go with sharewatch - just not sure whether to open an account or go on an execution-only basis.

I like the fact that sharewatch offer free crest membership to account holders - from my research, this is the electronic equivalent of holding share certs in that you are a true shareholder, registered in the books of the company and divs are payable directly to you as opposed to a Nominee Account where they are re-invested.

I suppose the difficulty I am having is determining the advantage of holding certs as opposed to opening an account. If I take the certs, I'll need to have them securely stored but it probably offers more peace of mind.

So I suppose the question I am asking is what is the advantage of holding shares over opening an account which is inclusive of Crest membership? I saw on-here some people opted to take certs, was their any reason why you took that decision.

Thanks in advance for the help (and sorry for the long-winded post)

Mosey101

I'm surprised nobody's mentioned Paddy Power Trader...they seem to be very popular...they are even running a free seminar on Oil Trading this weekend...or is there something i'm fundamentally missing about PP?