by john gurnhill
Thank you for visitng my humble site which relates a few thoughts that you may find useful, gathered over many years of practice. On this site you will read about my detailed internet share trading activities which commenced seriously in March 2003. At this point I set up internet accounts with Charles Schwab and idealing.co.uk . I have maintained several accounts with Scwab for many years, in fact since it was formed as sharelink for cheap telephone trading. The chief account is the Market Master account (now frequent trading Club), costing �120 / year to maintain, as well as the normal share dealing charges. Then there are the PEP and ISA accounts, initially set up to avoid CGT on the bank demutualisations. In total there are five accounts with this company, now run by Barclays Stockbrokers. I also now use idealing, with charges of �12 for limit deals, where I have �9000 to play with, that is, �3000 for the last 3 years mini-isa's. So again profits here will be free of CGT. Annual charges are very low, and there is a good interest rate on cash balances. My Financial Advice This will depend on your age. These days you have the problem of paying back student loans, but because of the very favourable interest rate, pay off the minimum when the time comes to repay. The best advise I can give for a comfortable, hassle free life is to find a region of the UK which has a cheaper cost of living than London, the SE, or Cheshire, S.Manchester. You will also need, unless you are self employed, a job with national pay rates, so that your income is the same as those in the same job in more expensive parts of the country. I know there are London or regional allowances, but I think that they do not make up for the extra costs and the poorer quality of life in these areas. For myself, I am based in the East Midlands, still one of the cheaper area of the UK, although house prices in selected areas are creaping up, possible due to the increasing numbers of millionaires that are supposedly settling down here. There are even some in Ravenshead! So the first thing to buy is a house. Go house hunting in November. I have purchase two houses, and three holiday properties at that time. I usually buy my cars then as well. At that time of year everyone is concerned about things for Christmas, and houses and cars do not come on ones Christams list! After that ensure that the pension funds are being built up, a harder thing to do with the changes in tax regualtions and company schemes. You should also begin to save in cash mini-isas, with Building Societies. Initially you will have to sign away your windfall rights, but usually after five years you will be eligable for any shares on conversion to PLCs. Only then, when you have built up, say, at least �5000, should you even think of gambling on the stock market. We have all seen the falls that took place between 2000 and 2003, and it can come as a shock if you are forced to sell at times of reduced value. So it must be money that is not needed for at least five years, taking a longer term view. Now you can get started on the gambling in the UK stock market. You will need to put �3000 into an isa fund with an internet trading company such as idealing.co.uk, and also join, free, Moneyam for free real time shareprices on as moany as you want to keep your eye on. You then watch, lurk around for a while, observing the movements up and particularly down. Look at the graphs. Don't study too many shares at first, up to five is about enough to handle. Choose those will small spreads, usually big companies with many shares issued. Then when a share seems to be getting out of step with its peers, that is, maybe one morning a banking share falls more than the others in that sector, you pounce. Put it a limit order, using about �1500 of the �3000 you invested, at a price of a penny or two BELOW what is at at that moment. If it doesn't fall to that price, you clearly don't buy. If you are fortunate about the price and it falls enough, then the shares will have been bought, with �12 dealing costs, as well as 0.05% tax. Work out what the selling price will have to be to make what I consider to be a fair short term profit, eg �50, and bearing in mind that there will be another �12 dealing charge, set the limit on the selling price. You then just sit back and wait for that share to reach the price you have set. Of course the price can fall! So far, since mid March 2003, which at the present time seems to have been the bottom of the three year bear market, prices generally have risen by 35% at the time of writing this, 20 December 2004. My main portfolio of about 25 shares had now reclaimed some of the 40% losses it suffered during the previous three years. Whilst I am keeping a careful watch on those share, eg, Persimmon was sold when I felt its good run was about to finish, these shares are not what I consider to be my gambling section. They are there for long term growth, and only when they rise on an individual basis to what I consider to be an unsustainable level will they be sold. They could then of course be bought back at a lower price later, which is equivalent to making a profit. Click below to enter this site, and you will read about my portfolio, profits made, and recent deals. ENTER HERE |