HOW to invest in shares.

From time to time a thread starts up on a particular share or offering that arouses some interest, and we also start talking about how to invest, what brokers to use, what sources of information to use and so on.

So I thought that I would try and make a useful distinction between the two. This thread is about how to invest, i.e:

What books to read and websites to visit?
What online resources are useful (and free!)
What's the really essential knowledge?
What personal investment rules do you use? What techniques?
How to take the plunge and register with some form of broker, recommendations, etc.

For WHAT to invest in, there's another thread where people can post tips, share their portfolios and ask questions. It's here

Note: ARRSE, its owners or members cannot be held responsible for the financial advice within this or other threads. Investors invest at their own risk and the value of shares and other financial products can go down as well as up. A fool and his money are easily parted, etc etc...
Are you regulated by the FSA?

Actually, kidding aside I am interested in the subject.
So, to start from me...

I started off by reading a few books. In the distant past I had studied share trading as a part of a degree I was doing, but had forgotten the majority of the stuff and felt like I had to get back to basics.

So I read:

Dummies Guide to Shares and Investing. Does what it says on the tin...
Investing in Stocks and Shares by John White. I read this next - the Dummies Guide really helps as the entry-level book.
The Neatest Little Guide to Stock Market Investing by Jason Kelly. A septic's view.

Next, I set up a blind portfolio - i.e. I pretended I had money and I watched that pretend money grow and shrink. I did this using the Stock Prices, Financial Markets News, FTSE 100 Index - London Stock Exchange website.

In longer time, I wrote out the rules of my portfolio and tried to take a systems-based view of my portfolio and its surrounding 'ecosystem'. Bear in mind that what I know about systems-based-anything can be put on a fag packet. But here it is...


Keep going. I'll have to catch up later.
Are you regulated by the FSA?

Actually, kidding aside I am interested in the subject.
No - I am not even in the Financial Industry. But I'm not presuming to offer financial advice here, just share information - and to get it off others! If someone FSA registered comes along that'd be great but I daresay that they would also be very circumspect about handing out advice.
Hi VM (and budding would-be millionaires out there!!); the following is a shameless "cut & paste" from a PM I sent earlier on - hopefully it should cover a number of salient points.

Buying shares:

You can do this through most High Street banks or any Sharedealing Firm. "Google" search will find you any number of them. I use my bank's sharedealing team, who I have found to be spot on. As an aside, the bank's Sharedealing advisors will NOT give you advice on which firms to invest in - by and large they ain't qualified. This advice has to come from an Independent Financial Advisor (IFA) or your own analysis of the market.

Selftrade Share Dealing Account / Selftrade
Share Dealing | Interactive Investor
Barclays Stockbrokers
Sharedealing questions | first direct
Stock Prices, Financial Markets News, FTSE 100 Index - London Stock Exchange
Lloyds TSB Share Dealing

Share Chat

Share Chat on London South East. Recent Share Chat on all major UK stocks.
Investing | This is Money
Stockopedia | Share Prices, Company News, CEO Interviews & Investor Discussion
ADVFN - Free live UK share prices from the LSE, FTSE 100 Index

The chat sites come with a fairly obvious "health warning" that they may be frequented by those with, shall we say, a "less than thorough" grounding in the topic of which they speak........... A bit like a certain site we all know & love then!!!!!

In my humble opinion, "Playing the Stock Market" has a number of cardinal rules:

1. Any money you put into stocks & shares HAS to be money that, in the event of the next crash coming along tomorrow, you can tear up and walk away from laughing. You hear horror stories of people re-mortgaging their houses, or borrowing £10,000 on a 0% Credit Card to invest - don't do it, because if the firm you invest in goes bust, or the next Black Wednesday comes along next week (and you will NOT see it coming, that's a given) then you are in the s**t!!!
2. Research your intended purchase for a long time before you buy. Do NOT, for f**k's sake, go by a tip you got from a mate in the pub!! The buzz-phrase amongst civvy brokers "If you don't understand it then don't invest in it"
3. Don't get into the habit of checking your share prices every hour, or even every day; you'll soon become obsessed with it.
4. Have an idea of what price you are prepared to sell your shares at, and once you have done so (and hopefully netted yourself a few quid!!!) DON'T look back.
5. When you are doing your "profit calculations", bear in mind that if you are a UK taxpayer any profit you make from stocks & shares is liable for Capital Gains Tax at 28%. There are ISA exemptions for the first £10,100 of profit etc in a given Financial Year - again, speak to an IFA for the definitive.
6. Enjoy it!! The stock market can be fun, and can make you a few quid, but it is HIGHLY unlikely to earn you life-changing sums of money.

Grateful for anyone else's contributions (or indeed, advice if my points above have been less-than-helpful!!)

Cigar Island
Can I offer that I share your pain in the "slightly-pissed-off" stakes; only by virtue of BUYING INTO Desire Petroleum........???

Ah well, 70% down isn't that bad a place to be,is it?? Thank the Lord it was only £200!!!!
As ChasDave has mentioned,the LSE site is helpful as it has a forum used by actual share holders,and they have a incredible depth of knowledge of their chosen shares.I follow some of them,having started using fantasy money and their advice was excelent and timely.
This is them Share Prices, Stock Quotes, Charts, Trade History, Share Chat, Financial News - London South East

Some more advice here How to Buy and Sell Shares on the Internet - UK Net Guide clearly an advert for the company also lots more via Google.

Likewise Google "Boileroom scams" this from the FSA Share fraud and boiler room scams

Maybe if enough of us get interested we could start a Share Group/Club ?
ProShare Investment Clubs
It's no more complicated than:

Ascertaining that you've got some money to spare (and that you can afford to lose if it all goes gear-up)
Picking up the phone to Barclays or Hargreaves Lansdown or whoever
Setting up an account
Buying shares in whatever firm floats your boat
Sit back and absorb the profit or loss
Errm, that's it.

Please don't hesitate to PM me if I can provide any further info

Best wishes



Book Reviewer
My gang* are all currently using Sharecentre as an online broker - The Share Centre | Buy & Sell Shares With A Share Account (but only just getting into it so the learned and more experienced ARRSErs may shoot it down?)
I've been playing with the free £15k practice account for the past few months in preperation for taking the plunge. Its pretty idiot proof but the fees reflect its simplicity.

I realise this may be stating the obvious, but whenever I'm trading I have a spreadsheet running in the background that takes into account all the costs (broker, tax etc - Per chasndave's post). I've got it set up so that you can input purchase price and it outputs the minimum sell price to turn an actual profit.

Re: What to choose? I can't reiterate enough do your own homework. Its far too easy to take a tip from a friend and lose everything. Despite us having a verbal "no liability" clause between us, there have been serious tantrums and one occasion of fisticuffs amongst us. Vice versa - avoid giving out tips if possible. It can end so, so badly.

* Group of assorted friends/acquaintances/business contacts rather then the motorcycle and/or drug dealing variety.
OOh, I like this thread. I may lurk and soak up some knowledge and tips but this could definitely be another little hobby for me.

Nicely played gentlemen.
Ref giving and listening to share tips - it isn't the "giving and listening" that's the problem - it's when you or your mate / Mum-in-law / bloke down the pub then goes off, does no research of their own whatsoever, and blindly invests money in something they have no idea about. Hence the "if you don't understand it, don't invest in it" mantra. To do otherwise, you may as well visit The Jockey on the Chatsworth Estate and get a tip from big Frank Gallagher about "Lightning Bolt" in the 3:45 at Haydock.

Likewise, and if I am beginning to sound like a stuck record then I apologise, but put no money into shares that you cannot afford to lose. If you stick to those two pearls of wisdom you shouldn't go far wrong; and if tips and advice result in fisticuffs and tantrums then I'd suggest that you leave it be.


Book Reviewer
Well it was only my experience watching some people on the fringes of my life. It wasn't bloke-down-the-pub tipping. It was clever, well researched people taking tips on what were good investments. When it unexpectedly fell (think BP/Gulf of Mexico) rage got the better of some people. I suppose its a general warning on human nature.

And don't worry about sounding like a stuck record. I don't think you can say it enough.
I'm interested in investing small amounts of money into shares. What should iI use to buy them.

My bank natwest have a descent scheme, so was thinking of going with that.

I'm interested in investing small amounts of money into shares. What should iI use to buy them.

My bank natwest have a descent scheme, so was thinking of going with that.

Remember you have to defray the cost of buying the shares and basically build it into your investment. So if a trade is £10 and you invest £100 you make a profit at the £110 point, not before. Much easier if the trade is £10 and the investment is £1000 - hoping that the shares gain that is.

This hasn't come up so baldly on the thread before so I'm rather using this reply to make the fact abundantly clear. No intent to patronise!

Natwest aren't bad but ISTR that you didn't get much of a web-relationship with your portfolio. Not sure if that's changed...

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