Hi All,

Have been thinking about investing in stocks / shares, and am about to take the plunge. I have some money to invest, I suppose like most people I want a quick big return for my invesments, and the reality wil not be so, this I am prepared for as I know the investments have to be for the medium to long term.

My question is, should I be looking to thinly spread investments into say 8 - 10 companies, or to invest in 2 or 3 companies. Like I mentioned before, I know there is no magic formula, but a few pointers in the right direction would be greatly appreciated.

I am looking to invest for the future, I have a full time job, which is nothing to do with finance / investments, so this is an exciting project I am looking forward to.

Thanks in advance for any help given.

Simon - UK

Quality not quantity!!!!!

Mega...

Buying the shares is the easy bit. Managing them thereafter the hard bit.

The one thing you MUST MUST MUST do is cut your losses early. Say 10 or 15% of your original investment to preserve your capital for another day and another stock.

If your initial investment falls 20%, it must rise by 33% to get you back to break even.

Think you can take a loss in your stride? Wait till it happens and then answer.

PTH

Thanks for the advice, I know I shouldnt ask, but am going to, but I understand fully if I get no answer, so here goes, what sort of amount did you invest into the 20 companies? Apologies in advance if this offends..

Simon

Genovese1

Take your time. You don't have to rush in. Learn a bit about companies and their prospects first. You don't need to find one that's on the up first. A good prospect will continue to increase in value no matter at what point you enter.

When I first started a few years back I had 3000. I put half into Pilkington, which made me about 50% and half in an outfit called Albright & Wilson, which subsequently got bought over and I made about 70% quite quickly. After that it went pear-shaped for a while!!! ;-)

Al

8 to 10 stocks sounds about right. The Investors Chronicle this week 30Jul to 5Aug has an explanation of this in the MasterClass section page 7.

Genovese1

No offence, sorry wasn't ignoring you, the thread had slipped to the bottom of the page.

On Shares I've sold, I am in profit and have re-invested, although sometimes I think unwisely, on shares I haven't sold some are losses on paper and some are in profit, (overall loss). Be in no doubt, I am making mistakes, but further to my last comments, take your time, never ever react to a 'don't miss this' or 'this is going to double by tomorrow' most of them don't and if you miss one, well, so what, there will always be another sometime. Companies like TES seem to happen very rarely. Hope this helps.
I have had a shit day, red across the board, played crap at golf and my new Broadband doesn't work! And I wish someone would tell me what is going on at PIPEX, cos I am really really curious!!

Good Luck

Regards

PTH

Before you can trade properly you need to know yourself, and be able to control your emotions... if you can't, then you can't trade. Picking the share is next..

And you need to be able to think long or short... even if you only go long. (Think about it and you will understand)

2 portfolios with monopoly money for 6 months

A = 2/3
B = 8/10

Genovese,

I note from your header that you are referring to investments as opposed to trading. Traders tend to trade the charts whereas investors buy the fundamentals and/or the story.

My suggestion is that you firstly read "Beyond the Zulu Principle" by Jim Slater which will teach you a method of fairly valuing the shares of any given company. As Big Al says, there's no rush. The market will still be here once you've acquired some knowledge.

Genovese
David Linton says that shares mag has a very good track record at stock picking. He has figures to prove it

IC is way behind on stock picks

re 7 cutting losses is key and do not get wedded to a stock

The amount invested per stock has to be worthwhile to cover the spread and costs and try to invest in a few different sectors. Stocks with dividends are worth considering

Totally ignore rampers as they usually have a vested interest

Genovese

I would suggest you listen to Jumpin, hilary and Snip, all of which I beleive are women.

It's not often I do listen to women, but can safely vouch for these ones. I've been keeping an eye on them!

;-)

If you are having trouble with the psychology of it, as per Jumpin's post, I'd suggest you read books by Elder and Douglas. Highly recommended.

Jumpin

You state "Before you can trade properly you need to know yourself, and be able to control your emotions... if you can't, then you can't trade. Picking the share is next.."

Is not that like saying 'before you can ride a bicyle properly you need to know how to balance on two wheels....if you can't, then you can't ride a bicycle. Peddling the wheels is next.."

I'd be interested how you managed to do one without the other.

"Is not that like saying 'before you can ride a bicyle properly you need to know how to balance on two wheels....if you can't, then you can't ride a bicycle. Peddling the wheels is next.."

If you can't balance you can't pedal

If you lose the balance you fall off and you lose serious money

Yes Big Al..

I give in and admit...;)

"Genovese1 -Another question, would it better to buy lots of shares at a low price (penny shares) ? or smaller amounts of higher priced, like the topical Abbey Bank ?"

Don't buy lots of penny shares.


Stick to small spreads bigger caps, low trading costs.

Trading penny shares...hard to buy, big or rather HUGE HUGE spreads... hard to trade, low vols, hard to sell. Yawn, yawn, wait wait for sometimes could even be months or YEARS for just the spread to be filled before you can even break even!

Genovese, the rampers can be spotted by checking the chart of what is being ramped. If the price is going in the opposite direction to what they are recommending they are ramping. Usually.

Jumpin. ;-))

Genovese1 - keep a good spread of investments, i.e. a selection from the largest caps to the smaller ones. Don't be tempted by the BB's to jump into all the tiddlers - surefire way to get into trouble and you'll sleep easy.

Genovese, penny stocks can be very problematic to sell if you need to get out in a hurry and it is possible to lose most of your investment in minutes

I agree with large caps and small spreads and look to get into a stock in a rising trend. They all have retracements so look out for that and watch for strongly positive volume on a re-test of a support level

think `mountain goat` and be happy to plod upwards

Maria otherwise snip (member of big al fan club)

ps the book by Elder is a wonderful read and a `must have`

Buy the pullbacks indeed! This a lovely example over a long time period. Best level is behind so no advice given!!





Cheers,
Al
(fan of all the wimmin!)