I played the (stock) markets today, and only lost £7.50, not too shabby?

Original post by Oilfreak1

Yeah i'm in it for the opposite, dont mind if i lose every penny just wanna practice trading stocks, and master the art of being an investor rather than a speculator.

When I have a steady stream of income i'll definitely be looking to funds for steady, regular income.

I don't mind speculators, it's just so much risky. When you are coming in and out of positions (buying and selling) daily, the market is unpredictable. Over the long run a good company will go up regardless of market psychology.

If you want steady income, find some solid dividend stocks. Stocks like your Shell, BP, Rio Tinto, GlaxoSmithKline, Verizon that have always paid decent dividends and have in general maintained the dividend at all costs!

Reply 62

Original post by Oilfreak1

Yeah I use HL so a £68 profit is actually £56. Having an 18k MSc to pay for I Can't put much into stocks.

I've been looking into options since it would let me practice making use of BSM equations but don't wanna leave my comfort zone lol.

Really fascinating to see how much disposable income my peers have though.

HL as in Hargreaves Lansdown? I use them as well. There fees are expensive though, when you do open a proper account it might be worth going for someone like Equiniti, heck I think everyone is cheaper than HL.

Options is basically speculating, it's probably even worse as you are forced to close your position (buy or sell) at the expiry date. I don't like financial derivatives, all these options and futures, people basically use them as gambling instruments when in theory they should be used to protect exposures. So an option can be used to protect the downside on a stock and a future can be used to lock in prices for a farmer etc.

Reply 63

Oilfreak1

19

Original post by fg45344

I don't mind speculators, it's just so much risky. When you are coming in and out of positions (buying and selling) daily, the market is unpredictable. Over the long run a good company will go up regardless of market psychology.

If you want steady income, find some solid dividend stocks. Stocks like your Shell, BP, Rio Tinto, GlaxoSmithKline, Verizon that have always paid decent dividends and have in general maintained the dividend at all costs!

Yeah hargreaves they are pretty extortionate tbh, but they'll do for now.

And yeah options in particular look scary but I want to put some practical use to some of the programmes i've made before starting my MSc, i could just speculate and put no money on an option - but the reality of earning even £1 from using what I read in a book motivates me alot to thouroughly understand what i'm doing.

Reply 64

Original post by Oilfreak1

Yeah hargreaves they are pretty extortionate tbh, but they'll do for now.

And yeah options in particular look scary but I want to put some practical use to some of the programmes i've made before starting my MSc, i could just speculate and put no money on an option - but the reality of earning even £1 from using what I read in a book motivates me alot to thouroughly understand what i'm doing.

The best way to make money is to buy undervalued securities (shares, bonds, any instrument which can be traded in the markets is referred to as a security) and then hold them for a very long time.

Even better is to buy income generating securities, so the dividend from a share, or the coupon from a bond. Then you will do very well if you have paid a good price to the security and you hold for the long term.

Sure these strategies won't make you a millionaire, but you won't go broke.

If you are interested, these are my holdings right now....

Apple (AAPL)
Starbucks (SBUX)
Walt Disney Group (DIS)
Barclays (BARC.L)
Legal and General (LGEN)
BP (BP)
Eros International Bonds (got them at 9.5% yield)
Greggs (GRG)

(edited 7 years ago)

Reply 65

Oilfreak1

19

Original post by fg45344

The best way to make money is to buy undervalued securities (shares, bonds, any instrument which can be traded in the markets is referred to as a security) and then hold them for a very long time.

Even better is to buy income generating securities, so the dividend from a share, or the coupon from a bond. Then you will do very well if you have paid a good price to the security and you hold for the long term.

Sure these strategies won't make you a millionaire, but you won't go broke.

If you are interested, these are my holdings right now....

Apple (AAPL)
Starbucks (SBUX)
Walt Disney Group (DIS)
Barclays (BARC.L)
Legal and General (LGEN)
BP (BP)
Eros International Bonds (got them at 9.5% yield)
Greggs (GRG)

I'm sure steady income will make you a millionaire over time if you have a career in addition to these dividends
(so 2 streams of income). You wont get rich quick or easy it'll be a long hard grind, but imo thats reason enough to go for it.

Atm my excel spreadsheets are normally netting me £60/week (some weeks I earn nothing/ lose money due to stocks not following the pattern I simulated), and as a broke student trying to save up for masters the ~£250 monthly income is too much to pass up for steady savings :frown:

.

Once i'm done with uni though, i'll probably want to contact you again for more a more indepth rationale behind your choices :smile:

Reply 66

Original post by Oilfreak1

I'm sure steady income will make you a millionaire over time if you have a career in addition to these dividends
(so 2 streams of income). You wont get rich quick or easy it'll be a long hard grind, but imo thats reason enough to go for it.

Atm my excel spreadsheets are normally netting me £60/week (some weeks I earn nothing/ lose money due to stocks not following the pattern I simulated), and as a broke student trying to save up for masters the ~£250 monthly income is too much to pass up for steady savings :frown:

.

Once i'm done with uni though, i'll probably want to contact you again for more a more indepth rationale behind your choices :smile:

The main thing in a way is not going broke in the stock market, and the only way that can happen if buying high and selling low or if companies go bankrupt. So it's best to hardly trade the stocks and to invest in companies which can never really go bankrupt, stuff like coca cola, microsoft, shell etc, they may do, but definitely not in the next 20-30 years.

I follow Warren Buffett a lot and he has a lot of great advise (other than being the 2/3rd richest man in the world).

https://www.youtube.com/watch?v=ldPh0_zEykU

http://finance.yahoo.com/news/warren-buffett-best-investing-advice-201019702.html

https://www.linkedin.com/pulse/ive-followed-warren-buffett-decades-10-quotes-what-i-keep-green

(edited 7 years ago)

Reply 67

john2054

OP

6

Original post by fg45344

The main thing in a way is not going broke in the stock market, and the only way that can happen if buying high and selling low or if companies go bankrupt. So it's best to hardly trade the stocks and to invest in companies which can never really go bankrupt, stuff like coca cola, microsoft, shell etc, they may do, but definitely not in the next 20-30 years.

I follow Warren Buffett a lot and he has a lot of great advise (other than being the 2/3rd richest man in the world).

https://www.youtube.com/watch?v=ldPh0_zEykU

http://finance.yahoo.com/news/warren-buffett-best-investing-advice-201019702.html

https://www.linkedin.com/pulse/ive-followed-warren-buffett-decades-10-quotes-what-i-keep-green

I invested £2200, and i lost nearly £100 in the first day, so now i have pulled it all out. And I am going to be happy to leave it to the professionals!

JR

Reply 68

Original post by john2054

I invested £2200, and i lost nearly £100 in the first day, so now i have pulled it all out. And I am going to be happy to leave it to the professionals!

JR

You should hold for the long term. £100 lost on £2200 is not too bad, in a bear market nearly every investor loses money, unless you short the market, which is very hard for us "normal" investors.

Reply 69

Original post by john2054

I invested £2200, and i lost nearly £100 in the first day, so now i have pulled it all out. And I am going to be happy to leave it to the professionals!

JR

FYI, on my £14,000 in the markets, the worst I was down was £1400, it's all recovered back now. You just have to sit in and hold tight.

It's like investing right before a financial crash, ofcourse you will lose money. But it will be made back in 2-3 years after the financial crash and plus more dividends on top.

Reply 70

john2054

OP

6

Original post by fg45344

You should hold for the long term. £100 lost on £2200 is not too bad, in a bear market nearly every investor loses money, unless you short the market, which is very hard for us "normal" investors.

I don't trust the markets enough, sadly.

Reply 71

It's a mugs game. No different to gambling on sports. If anything I would say it's easier to win on sports because there are fewer full time analysts doing it.

Reply 72

Original post by Sternumator

It's a mugs game. No different to gambling on sports. If anything I would say it's easier to win on sports because there are fewer full time analysts doing it.

I disagree, look at the FTSE 100 returns over 30 years with dividends reinvested, or the Dow 30 returns over 30 years with dividends reinvested. You will always be positive in the very long run if you invest in blue chips.

The market always recovers, it has and never will go to 0, now sport betting is a mugs game, because you can lose it all in a day. The financial equivalent of sports betting is the derivatives market and any sane investor stays away from that, unless they want some protection on their stocks.

Reply 73

Original post by Sternumator

It's a mugs game. No different to gambling on sports. If anything I would say it's easier to win on sports because there are fewer full time analysts doing it.

https://dqydj.com/dow-jones-return-calculator/

^^ look at this and adjust for CPI (Consumer price index) inflation, the DJIA (Dow Jones Industrial Average) has made a 1000% return from 1985 to 2016 when dividends are reinvested.

So you have increased your money 10 times in 31 years taking into account inflation.

Reply 74

Original post by fg45344

I disagree, look at the FTSE 100 returns over 30 years with dividends reinvested, or the Dow 30 returns over 30 years with dividends reinvested. You will always be positive in the very long run if you invest in blue chips.

The market always recovers, it has and never will go to 0, now sport betting is a mugs game, because you can lose it all in a day. The financial equivalent of sports betting is the derivatives market and any sane investor stays away from that, unless they want some protection on their stocks.

*

I accept your point about stock returns but investing over a long period (which I do) is different from the day speculation mentioned in the op. Transactional costs easily eat up all of your expected return if you are trading everyday. The expected daily return is approximately 0. And people who think they have an edge on the market are no different to people who think they can win on horses.

Reply 75

Original post by Sternumator

*

I accept your point about stock returns but investing over a long period (which I do) is different from the day speculation mentioned in the op. Transactional costs easily eat up all of your expected return if you are trading everyday. The expected daily return is approximately 0. And people who think they have an edge on the market are no different to people who think they can win on horses.

I bought BP stock at 361p, stock was undervalued, BP is a great company and the 7.5% dividend looked good. Now the stock is 452p, this happened over the period of 2 weeks. A lot of money coming from UK based equities to more international equities. So I made a lot of money here and I didn't expect to, now I'm still holding onto BP because I care more about the dividend than the immediate gains it gives.

But you can see why people trade everyday or every few days or every week, there are some crazy gains to be made with very little work. Daily returns are more than 0, some stocks do swing 5/6/7 % in volatile times like now and if you hit lucky, well done I guess.

Reply 76

Original post by fg45344

I bought BP stock at 361p, stock was undervalued, BP is a great company and the 7.5% dividend looked good. Now the stock is 452p, this happened over the period of 2 weeks. A lot of money coming from UK based equities to more international equities. So I made a lot of money here and I didn't expect to, now I'm still holding onto BP because I care more about the dividend than the immediate gains it gives.

But you can see why people trade everyday or every few days or every week, there are some crazy gains to be made with very little work. Daily returns are more than 0, some stocks do swing 5/6/7 % in volatile times like now and if you hit lucky, well done I guess.

How did you know it was undervalued though? And if you knew it was undervalued, why not get stuck into options to lever your position?

I made a 2000 percent return on a horse today in about 1 minute. That was a crazy return for little work. With hindsight, the horse was overpriced but I still don't think horses are a wise investment.

Like in financial markets, there are a few experts who can do the analysis and get an edge on sports betting markets. And of course, like like in financial markets, there are those who get lucky and then convince themselves that whatever strategy they are using is a winning one. But the average punter loses money.

Reply 77

Original post by Sternumator

How did you know it was undervalued though? And if you knew it was undervalued, why not get stuck into options to lever your position?

I made a 2000 percent return on a horse today in about 1 minute. That was a crazy return for little work. With hindsight, the horse was overpriced but I still don't think horses are a wise investment.

Like in financial markets, there are a few experts who can do the analysis and get an edge on sports betting markets. And of course, like like in financial markets, there are those who get lucky and then convince themselves that whatever strategy they are using is a winning one. But the average punter loses money.

I don't like options! I don't ever like closing my position if I'm wrong, I'd rather hold on to a loser than pay transaction costs.

It was undervalued because it was 30p away from being the cheapest it's ever been given the business still had goodish profits and oil was on the way up.

Yeah I don't like horse betting, too much risk in closing out positions when you don't want.

Reply 78

Original post by Sternumator

How did you know it was undervalued though? And if you knew it was undervalued, why not get stuck into options to lever your position?

I made a 2000 percent return on a horse today in about 1 minute. That was a crazy return for little work. With hindsight, the horse was overpriced but I still don't think horses are a wise investment.

Like in financial markets, there are a few experts who can do the analysis and get an edge on sports betting markets. And of course, like like in financial markets, there are those who get lucky and then convince themselves that whatever strategy they are using is a winning one. But the average punter loses money.

Options are only good to limit losses, but because of that they limit gains. It's like a tool to reduce volatility in a way. You would only use an option if you weren't confident in the position you were taking, but then why take the position at all. If you are going to go in, you might as well go in all the way.

Reply 79