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Shares..... Any good tips


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Delicate time at the moment. US has a debt ceiling to pass, and we are in nervous times. Most of my money is in cash ATM.

 

UK or Oz based?

The energy companies are all quite low thanks to red Ed. They are defensive and pay good dive. I've always liked arm, but not sure if the time is right.

 

Don't buy anything luxury wise that is popular in China, as they seem to be coming off their highs.

 

UK small caps are worth a look. I'd look at a fund to spread your risk.

 

 

Gold may be coming back, so you could look at oz gold miners.

 

Interesting times. Good luck.

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Just started to save for my old age, buying a few shares .... Any tips guys .....

 

Suggest that you look at the 'gilt edge' or 'blue chip' shares; pick half a dozen and see their trend for a few months before taking the plunge.

Also, if/when you do buy, roll the dividends into more shares.

 

Cheers, Bobj.

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Hi LS, one part of your strategy could be index linked funds. They are similar to managed funds where you buy into a whole bunch of companies with one purchase so your risk is automatically spread across all those companies.

 

Normal managed funds usually have very highly paid fund managers who actively manage the fund. The salaries and overheads of this approach are paid for via high fees charged to the holders of the managed fund.

 

The advantage of index linked funds is that you choose an index linked fund that is linked to a particular index like FTSE 500, and the fund is setup to automatically keep its holding of each company in that fund in proportion to the companies value. This automatic management leads to lower fees and tax advantages that improve the return. It also means the fund should return around the average yearly return for that particular index. ie if the FTSE 500 returned 6% for the year the index linked fund should return similar.

 

You might say big deal to making an average return but it is quite hard to make. For a start obviously only half of investments return the average but many of these returns are then diminished by the large fees charged by things like managed funds. So even investments that return higher than average end up returning less than average after fees.

 

Some index linked funds are packaged up into tradeable shares so you can buy them just like any other shares. In this form they are known as Index ETF's. So you could buy shares in an ETF that tracks tech companies, or small companies, or top 500 companies by size or whatever. Google ETF's to see some examples.

Edited by fish.01
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Hi LS, one part of your strategy could be index linked funds. They are similar to managed funds where you buy into a whole bunch of companies with one purchase so your risk is automatically spread across all those companies.

 

Normal managed funds usually have very highly paid fund managers who actively manage the fund. The salaries and overheads of this approach are paid for via high fees charged to the holders of the managed fund.

 

The advantage of index linked funds is that you choose an index linked fund that is linked to a particular index like FTSE 500, and the fund is setup to automatically keep its holding of each company in that fund in proportion to the companies value. This automatic management leads to lower fees and tax advantages that improve the return. It also means the fund should return around the average yearly return for that particular index. ie if the FTSE 500 returned 6% for the year the index linked fund should return similar.

 

You might say big deal to making an average return but it is quite hard to make. For a start obviously only half of investments return the average but many of these returns are then diminished by the large fees charged by things like managed funds. So even investments that return higher than average end up returning less than average after fees.

 

Some index linked funds are packaged up into tradeable shares so you can buy them just like any other shares. In this form they are known as Index ETF's. So you could buy shares in an ETF that tracks tech companies, or small companies, or top 500 companies by size or whatever. Google ETF's to see some examples.

 

I agree, trackers all the way until you really know what you're doing. You put the money in, turn your brain off and don't have to think.

 

Read the first half of the Motley Fool book - before it starts recommending individual stocks (note: presuming it hasn't changed since 1999 when I first read it).

 

It is VERY hard to beat an index. Especially over several years.

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