Shares - be very cautious

Discussion in 'Finance, Property, Law' started by gobbyidiot, Jul 6, 2008.

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  1. Havent read the article but your comment isnt talking about the asset class (equities) its talking about the product (the structure that charges high fees).

    In contrast, you can put you money into a tracker with no upfront load (commison) and low annual charge. Go to for more info
  2. in_the_cheapseats

    in_the_cheapseats LE Moderator

    You should always be careful with what you do with your cash. Unless you understand an investment, simple answer is you will probably be mugged,

    Do the reading up that is necessary and start small if you choose to invest in shares. It can be profitable (very at times) but learn the market and the way it is trending (v v down at the mo - can't fail to have picked that up in the press ) first.

    r.soles talked about a tracker fund. Less risk and a good way to start. the Fool site, as he says, is excellent. is another but a bit more grown up.

    For the more serious investor, I'll call the bottom at 4700 (here's hoping....). Anyone else want to guess?

    I look forward to the abuse as the market continues to pile S :D
  3. Crikey!

    I agree, the FTSE hasn't finished falling yet, but I hadn't imagined it going that low.

    People have been calling the bottom since about February and I believe Warren Buffet has been buying, but it all looks a bit dubious to me. I've just put my money on deposit with the Nationwide at 7%.
  4. Wife tried to out clever me when buying some shares a couple of years ago. High of 362p now 35p a share. Invest in bricks and mortar. Looks gloomy right now but ride it out, don't forget it's a home before it's an investment. If in neg equity so soon then you grasped too much that was offered to you. Last year building society said there was another 18 months growth in the housing market. Gut instinct told me there wasn't so I pulled out of a house sale which was a good move. Three months later everyone was shafting everyone. IMHO shares are easier to shift when low as opposed to property which requires lending cash from banks and they're not lending too much right now.

  5. And it's more useful, put money into your house in clever areas and wait for the market to come back, a few people i know are buying things like gold and antiques as well, again they have a use and should hopefully gain in value.
  6. I should add i'm not saying run out and buy gold and antiques, this is guys who have a fair few quid and like collecting!
  7. BiscuitsAB

    BiscuitsAB LE Moderator

    The great thing about the web is people with no qualifications or experience can give investment advice, and if you take it and it goes tits up your stuffed, and more bloody fool you.

    If you go to a professional you will pay for their advice, because thats what they do for a living. If you have all the facts explained to you and you decide to do it then don't whinge when the market falls, and it will fall and then it will go back up and then about seven years later give or take it will fall again and keep going around this cycle until hell freezes over or money becomes worthless. Same thing applies to bricks and mortar the markets rubbish at the moment but it will come back in a year or two. Oh and as for gold well its high at the moment but what the hey its possibly going to go higher as are most metals, but DON'T TAKE MY ADVICE ON THAT BECAUSE IM NOT A COMMODTIES DEALER AND I KNOW JACK SHIT ABOUT THAT MARKET
  8. With antiques it's a specialist area and mere pocket money to some. If I tried dealing in antiques I'd be fcuked all over the place. But a dorkus can buy a house. I did!

  9. Yes it is, that's why i posted straight after, the mates that do it are very much into specific areas and search for items, it's one of those hobby/investment things, i guess like guys buying cars, doing them up and selling.

    I know a few guys worth a fortune, i've watched a couple start their businesses and just grow, but they had the luck of doing something at the right time and having the right commitment. A story a guy i know tells me sums it up, he had been declared bankrupt about 3 times in his life, one of them when he started up a business buying stock from China, he said it was fantastic at first, they would send the kit over, he'd sell it and make a huge profit, then the prices went up and suddenly on the biggest order they didn't send anything, they just took his money and stuck two fingers up, so he went bankrupt. But he never gave up and made an absolute fortune out of another venture 5 years later, but as he said if he'd done this venture at the start it would have failed as it wasn't the right time for that product on the market.
  10. If you are thinking of going into shares the most important thing you can do is diversify... or in mong speak don't put all your eggs in one basket. It's accepted the stock market is having a pretty s**t time at the moment, but ask anyone holding shares in oil, gas or mining companies and they will be very happy indeed with their performance. Some types of stock will follow the market trend ( eg: leisure and pub stocks will rise in a good enonomic situation and fall in a bad one) other types will move against the market ( when times get bad it can be safer to go with a sure deal, food, utilities - as people always have to eat and leccy is sometime we cant do without). A properly thought out spread of stocks can help even out the swings of the market and protect you from losing your shirt. Remember though that just like negative equity - you only actually lose the money on your shares if you sell them - so if market is falling and you dont need ready access to cash best deal is always to ride the storm out and take the long term view.
  11. Also think the bottom will be somewhere there. Lots of cheap assets around now. Am long, very, very long.....
  12. Agree on houses and gold

    Don't agree on advice

    Many, many IFA's (but not all) know jack sh*t about investment. They are just in the product pushing business.

    An example. A year ago, a friend was told that his endowment may undershoot, but not by much. He took advice. the IFA said 'take your money out of the fund that its in and put all your money into a property fund'. The fund that he was in (and still is) is well diversified and property fund are not. Today his fund is up on when he was given advice but down 6% year to date. In contrast, the property fund is down 30-40% since the advice and year to date.

    However, not all IFA's are like this. To me, the ones that are fee rather than commison based seem better. Also, its worth trying to get more than one set of advice and see how it compares with the others
  13. My remark about fees was just "in addition" - the article itself, however, dispels a lot of mistaken assumptions that people have about equities as a class.

    People think that "shares go up in the long term". Why? "They just f***** do".

    I fell out with my para/sf pal because he was sinking his "shadow rank money" into shares in 1999, I was asking him about his assumption about the risk free rate of return, his assumption about earnings growth................he didn't know what I was talking about, why it mattered. Tell people that owning shares over the last hundred years has not resulted in substantial gains, really all you have done is insulate yourself against the effects of inflation - try it; they don't believe you. They wouldn't recognise the Barclay's Equity/Gilt study if they found it in their rice krispies. Tell people that the returns on investment to landlords from 1933 to 1999 were negative and they don't believe you. Tell them that the insurance companies used to be the biggest landlords in the UK but had to sell all their properties because they couldn't make any money.......they don't believe you.

    IFAs? Jesus. They gave some sixth formers a few hours and they passed the basic FPC certificate. You don't have to listen long to find an IFA saying, "Equities are the risk capital so they have to outperform in the long term". FFS.

    People do not read JK Galbraith, they haven't read Shiller's book on "irrational exhuberance".

    I've just finished reading the Alliance Trust "Investor" magazine. One of their senior investment managers tells us that the Alliance Trust (now the biggest investment trust in the UK) is less risky because the share price is less volatile. He describes risk as volatility - the chance that tomorrow's price might be different from today. How the f*** can otherwise intelligent people come out with this? RISK is the possibility of uninsurable and undiversifiable loss.

    People say, "it's only a loss is you sell". Hidden premise? The price will go back up. Well, you know what, it needn't!

    I had all this daft sods at work holding Northern Rock, HBOS, Bradford and ask them, "Would you buy those shares at the present price if you had the cash?" "Oh no, but I got them for nothing". Totally f***** irrelevant - called the "house money" fallacy, and boy oh boy do they understand that now.

    Try to get a home owner to understand that they are (to an accountant) renting from themselves, and if they wouldn't buy at the market price today then they should sell, regardless of what price they bought the f*****r for - they don't get it.

    And yeah, I do find it a bit frustrating :evil:

    Fundamentally we should all remember, it's not the things you don't know that land you in the shit. It's the things you are absolutely certain about that turn out not to be so.
  14. ...............and having said all that, ironically I'm still deeply tempted to fill my boots with some high-yielding investment trusts :oops: If I knew the dividends weren't going to be cut 5.5-6% tax free/tax paid and (probably) rising, hold them for ever (pauses to wipe greed-inspired drool from the keyboard).... fear and greed, fear and greed, what to do :?