[jardantuan]

I've been doing some reading on trading stock, and I've decided I'm ready to make an investment. I'm fairly confident I'll make a decent amount of money with my investment (the company's stock price is very low at the moment, but is almost certainly going to skyrocket soon), and I'm just trying to decide how to go about it.

Basically, I'm a first year uni student. I've got about £600 in my account, and a £1500 overdraft. I'm planning on getting a job over the summer, though I tried last summer without any success (I will be trying harder this time round). I want to invest a lot of money, ideally £1000+, but I can't decide if it's worth cutting into my overdraft for it. I know I'll get student loans in September, but my parents are divorced, and individually in very poor financial situations themselves, so I'll need to pay for myself over the summer.

Is it a bad idea to use my overdraft for this? Should I just use a smaller amount, say £300 or so? I know this is subjective, and I could end up making a huge mistake either way, but I just wanted some advice from other people.

[Riderz]

I certainly wouldnt buy using an overdraft.




And that comes from someone who has bought and sold a large number of shares in the past.

[HeyyImRyan]

No, no and no. Please make your main rule of trading only invest what you can afford to lose. Remember even top traders who do it for a living still make bad calls and lose out - nothing is set in stone and nothing can be wholly predicted!


If anything I'd say use a virtual stock exchange and practice, sure you may be missing out on this one business but if you profit from it with practice money then you know your decisions are good and the next time you can maybe give it a try. Please do not invest using an overdraft or with any cash you can't really lose, trading can be a dangerous and hostile place even for the professionals!

[function]

Like others have said, do not risk what you are not willing to loose.
Make sure you are aware of all the trading options available to you? Purchasing stock may not be ideal for someone in your situation. It may be more sensible to make a leveraged trade in CFDs for example. Or consider spread betting on the price of stock. That way you have more risk limiting devices at your disposal.

[super.teve]

(Original post by jardantuan)
I've been doing some reading on trading stock, and I've decided I'm ready to make an investment. I'm fairly confident I'll make a decent amount of money with my investment (the company's stock price is very low at the moment, but is almost certainly going to skyrocket soon), and I'm just trying to decide how to go about it.

Basically, I'm a first year uni student. I've got about £600 in my account, and a £1500 overdraft. I'm planning on getting a job over the summer, though I tried last summer without any success (I will be trying harder this time round). I want to invest a lot of money, ideally £1000+, but I can't decide if it's worth cutting into my overdraft for it. I know I'll get student loans in September, but my parents are divorced, and individually in very poor financial situations themselves, so I'll need to pay for myself over the summer.

Is it a bad idea to use my overdraft for this? Should I just use a smaller amount, say £300 or so? I know this is subjective, and I could end up making a huge mistake either way, but I just wanted some advice from other people.

There is still a strong chance the company isn't going to improve on it's stock price or that it might get worse.
Perhaps make a small investment at first and see how that goes.

[Axion]

You may think now is the best time to invest, but stop and don't. Most people buy too early with the promise of it 'skyrocketing' only to see it gradually fall further. obviously I assume you know the company insidebout, but try valuing it against competitors.

Aside from that, what company are you referring to?I'll have a quick look if you'd like

[spicetheice]

Always and always remember the golden rule: Invest only if you have money to spare! If not, then do not invest!

If you are a newbie to investing then follow this rule. Seasoned investors and traders can afford to take risks as they understand the volatility of the market. Start off with 100-200 Pounds and then increase your investments as when you learn. Take advice from your friends if you can.

[Fires]

(Original post by jardantuan)
I've been doing some reading on trading stock, and I've decided I'm ready to make an investment. I'm fairly confident I'll make a decent amount of money with my investment (the company's stock price is very low at the moment, but is almost certainly going to skyrocket soon), and I'm just trying to decide how to go about it.

Basically, I'm a first year uni student. I've got about £600 in my account, and a £1500 overdraft. I'm planning on getting a job over the summer, though I tried last summer without any success (I will be trying harder this time round). I want to invest a lot of money, ideally £1000+, but I can't decide if it's worth cutting into my overdraft for it. I know I'll get student loans in September, but my parents are divorced, and individually in very poor financial situations themselves, so I'll need to pay for myself over the summer.

Is it a bad idea to use my overdraft for this? Should I just use a smaller amount, say £300 or so? I know this is subjective, and I could end up making a huge mistake either way, but I just wanted some advice from other people.

Where did you read about the share that's about to "skyrocket"? You're aware that a lot false and misleading information circulates about shares, designed to trap the unwary?

[jardantuan]

(Original post by Axion)
You may think now is the best time to invest, but stop and don't. Most people buy too early with the promise of it 'skyrocketing' only to see it gradually fall further. obviously I assume you know the company insidebout, but try valuing it against competitors.

Aside from that, what company are you referring to?I'll have a quick look if you'd like

I'm looking at Nintendo. With the Wii U coming out at the end of the year, regardless of how good the console is, it's going to sell by the truckload. The same thing happened with the Wii a few years back, and I think the price rose 400% or something ridiculous.

[Tycho]

Don't invest from an overdraft! That's crazy. The interest/charges the bank will take with you being in overdraft will likely be higher than the money you make investing - if indeed you make any money.

Where did you see that Nintendo's share price rose by 400% after the Wii? Do you seriously think that if it was that easy to increase your money four-fold that more businessmen wouldn't be doing it? Don't be naive! The best way to make money is to make calculated decisions within the limits of what you can afford to lose. As a safety mechanism you should be naturally suspicious.

[Gangee]

(Original post by jardantuan)
I'm looking at Nintendo. With the Wii U coming out at the end of the year, regardless of how good the console is, it's going to sell by the truckload. The same thing happened with the Wii a few years back, and I think the price rose 400% or something ridiculous.

I wouldn't recommend Nintendo - video games sales are plummeting and most people just can't afford to shell out for new games consoles at the minute. Obviously your choice but I'd say it's pretty risky

[Fruippe]

£1000 is hardly worth investing, it is not a large sum of money in the investment world.

My advice is no.

[mucgoo]

You realise the future potential of the Wii U will already be factored into Nintendo's share price.

What happens if Microsoft and Sony release cheap price point casual consoles and take most of the Wii U's market share and it flops?

Also even if it does succeed investor will be cautious given there'll look at the 10 year chart and see this massive spike following the first Wii and be wary of being caught in the same trap.

[Genocidal]

I think that if it was that easy to just invest when a major company has a new product ready for release then everybody would be making money from this sort of investment. It just seems too easy, and that's why I wouldn't trust it at all. It's like a bag of crap with flies circling it having the label of "Lots of Monies" on it.

[Tycho]

(Original post by Fruippe)
£1000 is hardly worth investing, it is not a large sum of money in the investment world.

My advice is no.

This is a stupid piece of "advice". £1000 may not be the sum that a hedgefund manager might be interested in, but it doesn't make it unworthy of investment. Better to invest £1000 than to blow it on crap. How do you think people end up with lots of money? Nobody starts BIG.

[Axion]

(Original post by jardantuan)
I'm looking at Nintendo. With the Wii U coming out at the end of the year, regardless of how good the console is, it's going to sell by the truckload. The same thing happened with the Wii a few years back, and I think the price rose 400% or something ridiculous.

With all due respect here's my opinion.

A product release is a poor method of investing. if the company announces a profit fall then the share price will fall dramatically qith or without the product release. secondly the company share price has been in a medium term downtrend and i think its fair to say its losing market share.

There are much bettwer opportunities around, that are domestic - keep on looking and researching other companies will build your knowledge about the companies, risk vs reward, and what is genuinely good value.

[danetello]

I would say put the money in a cash ISA instead of investing. Not really any work needed on your part and you can earn money just by basically doing nothing. Nothing to lose, so long as you keep the total savings under £85,000.
Also if you get a flexible account then you can also take money out whenever you need it, however you might need to sacrifice 1 or 2 months interest.

[Fires]

(Original post by Tycho)
This is a stupid piece of "advice". £1000 may not be the sum that a hedgefund manager might be interested in, but it doesn't make it unworthy of investment. Better to invest £1000 than to blow it on crap. How do you think people end up with lots of money? Nobody starts BIG.

Not if it's your only £1K in the world and it also depends on what you mean by "investment". A lot of things that the markets label "investment" are not, they are speculation. Gambling money you can't afford to lose is much more stupid than the people you're calling stupid.

[Herr]

(Original post by jardantuan)
I'm looking at Nintendo. With the Wii U coming out at the end of the year, regardless of how good the console is, it's going to sell by the truckload. The same thing happened with the Wii a few years back, and I think the price rose 400% or something ridiculous.

It did go up by 400% indeed, but it took almost 2 years to reach it's peak from the usual hovering area.

Do you think you can recognize when that stock hits the ceiling?

(Original post by Tycho)
Don't invest from an overdraft! That's crazy. The interest/charges the bank will take with you being in overdraft will likely be higher than the money you make investing - if indeed you make any money.

Where did you see that Nintendo's share price rose by 400% after the Wii? Do you seriously think that if it was that easy to increase your money four-fold that more businessmen wouldn't be doing it? Don't be naive! The best way to make money is to make calculated decisions within the limits of what you can afford to lose. As a safety mechanism you should be naturally suspicious.

A lot of stocks have increased several fold in value, question to be asked is over a period of how long. 1 month? 1 year or a decade or somewhere in between. Generally very few people can recognize when a stock is at its ceiling or even at the peak though.

But yes, using your OD to buy stocks in a tech company now is a very silly idea and one that has potential to go disastrously very wrong....... hint : look at what happened to Facebook

[jardantuan]

(Original post by Herr)
It did go up by 400% indeed, but it took almost 2 years to reach it's peak from the usual hovering area.

Do you think you can recognize when that stock hits the ceiling?



A lot of stocks have increased several fold in value, question to be asked is over a period of how long. 1 month? 1 year or a decade or somewhere in between. Generally very few people can recognize when a stock is at its ceiling or even at the peak though.

But yes, using your OD to buy stocks in a tech company now is a very silly idea and one that has potential to go disastrously very wrong....... hint : look at what happened to Facebook

I'm by no means claiming to understand the ins and outs of the stock market. Nor do I want to absolutely maximise my profits. I'd be fine if I sold up when the price, say, doubled, even if it would end up at 500% the original value after a year longer. I'm not looking to make millions from the stock market - I just wanted to earn a little extra with the money I (sort of) have.

I was fairly confident that Nintendo's stock price would increase with the release of the Wii U - it seems there's a lot I've got left to learn. I'm certainly reconsidering now