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Deciding What Shares To Buy


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#1 the_duke_of_hazzard_left

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Posted 28 March 2012 - 06:17 PM

I've run out of places to put my cash so have been forced to use an ISA to invest in shares.

I only know about one industry, but want to spread the risk around, and was wondering how people here decide what to invest in.

There's so many books on the subject and I can't evaluate which ones to look at for practical advice.

My dad basically goes on "does it seem low based on the graphs", reads a few broker reports, looks at the dividends, and plunges for 5 years.

Anyone got any advice for me?

#2 Georgia O'Keeffe

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Posted 28 March 2012 - 06:27 PM

I've run out of places to put my cash so have been forced to use an ISA to invest in shares.

I only know about one industry, but want to spread the risk around, and was wondering how people here decide what to invest in.

There's so many books on the subject and I can't evaluate which ones to look at for practical advice.

My dad basically goes on "does it seem low based on the graphs", reads a few broker reports, looks at the dividends, and plunges for 5 years.

Anyone got any advice for me?

dont listen to your Dad, at least not from that scant evidence

but more seriously, if you only know a specific sector and with your industry knowledge you dont feel it offers value for whatever reason, (maturity,over capacity, badly managed players) then if sure equities are the place to be the safest way is to buy an index tracker, personally i wouldnt touch UK equities at this level with yours but each to their own

Edited by Georgia O'Keeffe, 28 March 2012 - 06:37 PM.


#3 interestrateripoff

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Posted 28 March 2012 - 07:15 PM

Have you tried speaking to a Goldman Sachs employee? :ph34r:

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#4 Son of Taeper

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Posted 28 March 2012 - 07:22 PM

I've run out of places to put my cash so have been forced to use an ISA to invest in shares.

I only know about one industry, but want to spread the risk around, and was wondering how people here decide what to invest in.

There's so many books on the subject and I can't evaluate which ones to look at for practical advice.

My dad basically goes on "does it seem low based on the graphs", reads a few broker reports, looks at the dividends, and plunges for 5 years.

Anyone got any advice for me?

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#5 Frank Hovis

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Posted 28 March 2012 - 07:24 PM

Your dad is right if you want to get a good range, I lean heavily towards a decent and sustained dividend yield as a sign of a company with good financial discipline.

My only other tip is if you personally find a company to be superb and their financials look good then buy. I wish I'd done this in the early days of J D Wetherspoon when I thought what a great idea those pubs were.
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#6 MrPin

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Posted 28 March 2012 - 07:33 PM

My only other tip is if you personally find a company to be superb and their financials look good then buy. I wish I'd done this in the early days of J D Wetherspoon when I thought what a great idea those pubs were.



Me too Frank! I could have got out more than I have "put in" over the years! Hic! :blink:
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#7 Frank Hovis

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Posted 28 March 2012 - 07:35 PM

Me too Frank! I could have got out more than I have "put in" over the years! Hic! :blink:
How long will their magic last ?


Like Tesco I think they've peaked Mr Pin. Decent enough defensive stock but no big gains to be had any more.
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#8 MrPin

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Posted 28 March 2012 - 07:44 PM

Like Tesco I think they've peaked Mr Pin. Decent enough defensive stock but no big gains to be had any more.



Think so! Richer Sounds (God bless them, as they never sold me a dud) have done very well too!

I'm glad I spent all my money at Richer Sounds and Wetherspoons, otherwise I could have bough bank shares!
Actually I sold all my windfall bank shares in 2003! And bought some guitars, for which I have a use! :blink: :huh:
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#9 MrPin

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Posted 28 March 2012 - 07:46 PM

I remember having ten grand in the early eighties, and considering buying Microsoft shares. But then I thought - no everybody knows that they've outsmarted IBM by making the software rather than the hardware - it's already priced in.

What a fool I was. This graph doesn't even go back far enough to cover the really large gains...


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#10 MrPin

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Posted 28 March 2012 - 07:55 PM

I was reading the other day about a woman who was offered a big stake in Starbucks when it was just one shop.

She thought: "Coffee shops; no way is that going anywhere."


Ha! Reminds me of Forrest Gump, with those Apple shares! :huh:

Of all the people I know ,and I must have literally millions of "facebook friends", or maybe not! But I have known only two to be really "lucky"! :huh:
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#11 libspero

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Posted 28 March 2012 - 08:00 PM

Can we make the following presumptions? :

1) You are looking for shares to buy and hold, not "day trading"
2) You don't really know what you want (hence the question)
3) You don't want anything high risk

I'm not an IFA etc etc..

When I started trading I bought investment trusts. They are funds who buy lots of different stocks and then you buy a share of them. They are usually listed as standard shares on the FTSE, and by buying a fund that spreads the risk you are not putting all of your eggs in one basket.

I used this page when choosing investment trusts The AIC

Since I only had a very small pot to start with this seemed the easiest way to spread my risk and minimise my buy/sell costs.

Since then I grew bolder and put smallish stakes in companies that I thought incredibly undervalued at the time despite the risk.. and so far those have given me by far the best return, but, it's a high risk strategy.

If you don't know what you want, perhaps stick to trusts or managed funds as others have suggested. For me, personally, I look for "value" in domestic stocks or growth potential in emerging market stocks.

If you have a particular market sector or geographical area in mind.. a trust or fund is probably a good way to go.

My parting shot would be that these days the macro picture is probably more important than individual stock choices.. if you're happy to jump in the majority of shares will probably be much of a muchness, so the most important thing is probably just spreading your risk around.


Good luck in whatever you choose.. as 2007 proved most people (even experts) don't really have a clue so you're in good company :)

Edited by libspero, 28 March 2012 - 08:05 PM.

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#12 porca misèria

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Posted 28 March 2012 - 08:24 PM

If you don't want to spend too much time agonising over it, delegate the work to a fund manager. That is to say, find a unit trust or investment trust (or several) whose long-term track records inspire confidence in their management, and invest there.

And invest based on your own judgement in good companies in your own industry, or those you're familiar with. That's where your insider knowledge has value that may not already be factored in to share prices. Example: I invested in a FTSE 100 company for whom I had worked as a contractor, and whose management had impressed me. That experience with them was 'insider' knowledge telling me it's a good company. That investment doubled in 3/4 years, and still pays a good dividend. Not my biggest gain, but excellent for a big, mature company that remained stable (didn't crash and burn) in 2008/9.

#13 hotairmail

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Posted 28 March 2012 - 08:43 PM

You should have bought second class stamps and resold them on ebay.

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#14 rw42

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Posted 28 March 2012 - 10:51 PM

Decide whether you want to invest in companies or commodities, and whether you want to realise gains via dividends from the company or capital growth from it.
And do you trust a fund manager to decide what the good prospects are, or would you rather select a few yourself?

I've had money in funds and it's done very little - at worst it was 10% down, i sold out when it was even. I decided that commodities should retain value better than cash in the current economy, and i found a lot of companies unattractive due to the amount of debt they hold. Don't trust myself to hold physical gold (couldn't tell if it was real or fake, would be worried about getting mugged/ripped off), so i decided to invest in oil exploration companies. I've had some fairly decent returns, some pretty shocking falls too. It's definitely not for the faint hearted - some days it could move 40% in either direction. If you're young it's memorable though!

Timing is everything - hindsight is a *******, it's easy to look at a chart of a stock you own and think 'i could have doubled my money if i'd sold there and bought back here. It's never that easy to tell at the time though - either decide you're going to hold no matter what, or set yourself solid rules on when you'll buy, sell or hold.

FWIW most of my money is in GKP, and most of the rest is in RRL - wouldn't be comfortable recommending either, they're both high risk but potential high gain.

#15 longtomsilver

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Posted 28 March 2012 - 11:15 PM

All good advice. Buy into what you know and DYOR.

Averaging up or down over the long term is possibly the best suggestion.

I have been dabbling mostly AIM listed shares since November last year and at one point I was up 50% now a more modest 30% which is still fantastic.

Recently ploughed all my profit into 10,000 SLP shares, risky yes but they owe me nada.

Edited by 30k, 28 March 2012 - 11:18 PM.

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