Investing in stocks?

dahamsta

How do I go about it? I have a little spare cash at the moment and a stock I'd like to invest it in, but it's only a few hundred I want to invest, maybe five hundred at the most. Will I be screwed by the brokers? Do I even have to go to the brokers? How does it all work.

Be gentle with me.

adam

daveirl

This post has been deleted.

dahamsta

Well I think you pretty much do have to go through the brokers, who will as you expect screw you royally.

That's what I thought.

I know people who trade online using Goodbody's and AIB - http://www.goodbody.ie/index.shtml Don't know much more about it.

Goodbody has a minimum investment of €1000, and I'm not willing to start off with that much. I looked E*TRADE, but you have to be a UK citizen for that.

I reckon its very hard to make money on the markets unless you have (a) loads of capital or (b) stock options.

Absolutely, but to be honest I'm not out to make my fortune with this, I'd be playing dead, penny and low stocks for fun, at least at the beginning. Hence my reluctance to invest too much.

Thanks daveirl,
adam

Mr E

I have a friend who trades on the Nasdaq using Datek (http://www.datek.com). They used to have a minimum $2000 investment, but I'm pretty sure thats not there any more.

Visit Datek's site and request a starter pack for more info (takes about 3 or 4 weeks to get here, but contains application form, brochure etc.)

Hope that helps,
Dave.

Mr E

Just followed the link out of curiousity (I'd love to dabble myself) and noticed that they have merged with Ameritrade. And it looks like the minimum investment is back. Sorry.

(Leaving the original post there for other would-be investors)

- Dave.

Tazz T

I use TD waterhouse, a UK company that allows Irish residents to trade online on markets worldwide. I looked at Irish brokers and they were all way more expensive and made it difficult to trade online easily. With TD Waterhouse, you can do realtime trading get better spreads and settlement terms - you even get great rates of interest on cash in your account, but you do need a sterling account, which is a prob if you haven't lived/worked in the UK at one time or another.

TBH, Dahamsta, it's not really worth your while unless you've got over a grand. Plus, the markets have been ravaged this year - although I've made a good return on my investment in previous years, this year I've personally lost around 50% and although things seem to be on the turn, it's possible that things could get worse before they get better. In today's economic climate, no one really knows where the markets are going next.

My advice: save a grand, do your homework, bide your time, pick a stock that's bottomed out but has good fundamentals, buy at the low end of its cycle, always use a stop-loss (everyone will tell you their biggest mistake is not to implement a stop-loss), be prepared to wait. Set a sell price and stick to it.

gl

Waylander

Another alternative, which is very similar to investing in the share is to take out a spreadbet on that shares performance. Go to
and it will explain exactly what is involved and how to do it. You can set up an account within a day or two and there is not really a minimum investment. Let me know how you find this, as I have done a fair bit of sports gambling on the sports site but have not dabbled with the shares yet, although I do plan to in the new year.

Waylander

sorry that link did not come out right. Go to www.sportspread.com and there is an obvious link there to the share section.

dahamsta

I looked at Irish brokers and they were all way more expensive and made it difficult to trade online easily. With TD Waterhouse, you can do realtime trading get better spreads and settlement terms - you even get great rates of interest on cash in your account, but you do need a sterling account, which is a prob if you haven't lived/worked in the UK at one time or another.

Heh, I'd just found TD Waterhouse and passed it over, since there was little or no information on requirements. However I found Internaxx a few minutes later, which seems to be a joint venture between TDW and some Luxemourg bank and they definitely trade internationally. I'll have a look at it tomorrow when I have a bit more time. Is there a low limit on new account with TDH?

TBH, Dahamsta, it's not really worth your while unless you've got over a grand.

Again, it's not about making it worth my while, it's about having a little fun. Make a few quid, lose a few quid, I don't care. Call it an experiment.

Plus, the markets have been ravaged this year

All the better to see you with...

although I've made a good return on my investment in previous years, this year I've personally lost around 50% and although things seem to be on the turn, it's possible that things could get worse before they get better. In today's economic climate, no one really knows where the markets are going next.

Indeed, but that's what it's all about, isn't it? I've made my pick and I have a few quid. Round and round it goes, where it stops, no-one knows...

always use a stop-loss (everyone will tell you their biggest mistake is not to implement a stop-loss)

What's a stop-loss?

adam

Waylander

My advice: save a grand, do your homework, bide your time, pick a stock that's bottomed out but has good fundamentals, buy at the low end of its cycle, always use a stop-loss

I am guessing that a stop loss is where you draw the line and cash your chips in because you have lost as much as you are prepared to lose. As regards the advice above, one of the first things you are taught is to diversify your stocks, do not put all you eggs into one basket, even if you are only making a relatively small investment. You should pick several stocks from several industries. That is why I recommended the spread betting, it is essentially working the markets without paying brokers fees. It is totally different to conventional betting, and sounds like exactly what you are looking for.

Anyway best of luck with your playing no matter which course you choose.

Tazz T

That's a stop-loss alright. I'd say Dahamsta is looking for a bit of a fun and a gamble and playing by the other big rule - never invest money you can't afford to lose.

You won't be able to invest in a basket of stocks with limited funds anyway.

So it's all going into one low cost low cap stock I'm guessing?

Kappar

I hve came across these guys before not sure of their policies etc. just putting it out there http://www.sharebuilder.com

Victor

I bought 100 Bank of Ireland a few years ago, nursed a loss but saw them come back and made a small amount. I also had Eircom / Vodafone (and broke even, with a tax loss that I can write off).

My advice. Don't invest in share unless you have more than about €5,000 per share to invest (noting the need to diversify) - otherwise the brokers eat into too much of your margin. Put some more money into an SSIA or start a PIP/PEP.

Invest in what you know.

gurramok

PIP/PEP

what are they ?

CivilServant

PEP= Personal Equity Plan

Personal=you
Equity=cash
Plan=you future.


I wouldn't know where to get one though. There are ads for them on telly but usually in England.

Bosco

[

Originally posted by Tazz T

You won't be able to invest in a basket of stocks with limited funds anyway.

You can and you can't. There are loads of investment funds out there that are linked to various stock market indices, and these funds allow you to invest in the biggest possible baskets of stock. While the minimum investment in such funds is typically quite high, there are a few that allow smallish monthly installments.

In my honest opinion if you have some money to invest and you are prepared to take some risk with the potential of big gains then these funds are the way to go. Investing in individual stocks is just gambling, pure and simple. It's great fun when you're up but at the end of the day you will lose all your money to some wanker in a suit. Go to the betting office instead, the taxes on gains are much lower

De Rebel

I use Goodbody online for domestic and e*trade (US) for international. Using an irish broker for Irish shares is the best option as it eliminates any currency loss/gains and simplifies tax returns.

It is true that Goodbody does have a minimum investment limit. But that may not be the issue you think it is. When you send your €1000 cheque to Goodbody , they lodge it in an online cash account. The minimum trade amount is €130. So you could lodge €1000, buy €130 each worth of 2 shares and leave the remaining €740 in the cash account. In fact, as far as i can see, there is nothing to stop you withdrawing the €740 at a later date, but you would need to check this.

The full set of charges is on the website, but the following is a summary of the main ones.
Account maintenance - €13 per half year
Purchases - 1.25% commission up to €25,000, €32 minimum trade charge + 1% stamp duty Irish, +.05% stamp duty UK, no stamp duty on shares other than IRL & UK
Sales - Same charges as purchases, however no stamp duty
Account closure - €40

There are a rake of other charges, these apply mainly if you trade US shares through Goodbody. Like I said at the outset, use an Irish broker for Irish & UK shares, and a US broker for US shares.

The thing you need to remember about low value trades is the trade charges are very significant. e.g. You open a Goodbody account and just to buy €400 worth of one share and hold it for 18 months. Charges are +400+4+32+13+13+13+32=507 so your share needs to do a minimum of 25% for you to break even.

I have no reason to endorse Goodbody online per say, other than that I have been satisfied with them and it is a hell of a lot better than dealing with a conventional broker who will have no interest at all unless you are dealing in €10,000 trades. I have also heard good reports of fexco's charges, though theirs is not really online - afaik you do authorisations through e-mail and do not have real time (+20 mins) access to your portfolio.

In theory this sort of trading works well for penny shares, especially where you have a good tip about strong recovery possibilities. But remember the fund managers turned those shares into penny shares for a reason!!

All of what was said about diversity in your holding etc above is true. But there is no harm in sticking a few hundred into something for a bit of fun so long as you are prepared to write it off.

Good Luck!

hmmm

Fexco used to be the cheapest brokers. Otherwise you can expect to pay €50+ from someone like Goodbodys. Ask at an AIB or BOI bank how much it'll cost, they will refer you to their group stockbrokers.

You'll also get hit with stamp duty.

As other ppl have said, you really need a couple of grand minimum to give yourself a good start.

hamster

Another option is to invest in a tracker fund. The type of tracker fund I mean is the one that follows the choosen Index. It's nothing to do with those "tracker funds that guarenteed 90% of your money and limit growth to 30% and must terminate in 3 years variety."

ie, I have one with Quinn Life. It follows the DJ Euro Stoxx 50. It has several advantages:

* You can work out exactly what it's worth at all times. ie. (no of units) x (end of day unit price) = Your money worth

* A single flat 1% charge

* No fund manager 2nd guessing the market over the long term. ie selling at the right time, buying in at the right time.

* No other bid/offer charges etc (just the internal equity charges such as stamp duty etc - which in Europe is lower than here)

* Diversification

* Europe is down 40% this year. You are now able to buy more units 40% cheaper and a better chance of a rebound

* Able to buy 500 euro chunks of new units at anytime.

* Likewise a tracker is available for Ireland (top 10 shares - not quite a tracker) and the US (S&P500)

I started one last year with E 14,000 and now it's down to E 9,800 but it's long term and will come back. Might even take advantage of the cheaper units now.

Has anyone else tried a tracker fund? ie with Irish Life or other. I have a "managed unit fund" too with Ark Life but that's another thread which points out that Fund Managers are paid to "under-perform" the index over the long run.

nahdoic

I will never trade on-line again.

I invested $500,000 and i lost $230,000.

Lucky for me, it was just a practise run ... phew!

It's a lot of fun to give it a practise go. I was really careful at the start, researching each share, making a few cent and then selling it. I was up to about $610,000 at one stage.

But it's quite slow and tedious researching each stock well, and just making small gains. So I quickly grew tired of my cautious approach. And I started taking bigger risks looking for bigger gains, and it all went pear shaped very quickly.

I'd recommend trying out some virtual money as well, before you hand over your hard earned cash.

I can't remember the site I used, it was a few years ago now, it was a bit like
www.virtualstockexchange.com

hamster

Hi nahdoic,

How long were you trading for? The last 3 years were bad but surely if you hold onto a blue chip stock (several in different fields for diversity) for the long term it will eventually do better than cash. I mean most of my investments started around 3 years ago but if I started in the mid '90s (or say '80s to the '90s) I would still be up 75%. How many different shares would you hold at once? 10 or more? Even blue chip can go bad, even here... Elan and nearly AIB but diverification really helps. I try to go for dividend paying shares too.... they sure beat the bank deposit rate here which is 2-3 times below inflation. :rolleyes: Again, sorry to hear about the loss, but over the long run....

Victor

Originally posted by hamster
Even blue chip can go bad, even here... Elan

Elan was not blue chip, it was a NASDAQ floozie.

nahdoic

I was just trading for about a month, it was only a practise go so I could take lots of stupid risks. I normally put the entire half million into 2 or 3 stocks. Then leave them over-night. I'd come back the next day, and if they'd gone up I'd sell them, and if they'd gone down I'd try to hang onto them for another day.

It worked suprisingly well, it's very easy to spot the cycle in the graphs they do for you, and if you watch the same share over a couple of days you get a kinda gut feeling about what it's going to do. I'm not sure why, but that feeling was always right.

But I just got greedy. It takes time to research and watch a share over a couple of days before buying it. I found it very slow, and I wanted bigger gains faster. So I just started buying shares without researching them enough.