Advice on how to successfully enter stockmarket

W

windo77

Registered User
Messages
79
Hi,

I would like to invest in the stockmarket. I have €1,000 to invest - I am prepared to lose it as have a pension and I believe that I also have a good spread of 'safe' investments earning 4 - 7% p.a.

Given that the minimum commission charges are typically €20 - 100 per trade, I reckon I would need to limit myself to two trades. Does anyone disagree with my way of thinking?

Also, do I lodge money with the stockbroker or do I transfer money from my bank account each time I wish to make a transaction? I have a current account with NIB. So, I am thinking of using them as their commission charges are relatively low. Any comment?

I know very little about spread betting but given there are no commision charges and the minimum trade is often €1 (meaning that I could risk less per trade than if I buy shares), perhaps this is a better option for me. I understand that the risks involved are greater but if so, I am thinking that maybe I should take that risk after I learn what I need to know - I am currently reading The Financial Spread Betting Handbook by Malcolm Pryor and The Naked Trader by Robbie Burns. Any comments on these books? Any other recommedations for reading?

Finally, if I open an account with a non-Irish-based stockbroker / spread trader, do I need to open a bank account in the country in which they are based?

Thanks in advance for any advice.
 

First, establish in your own mind whether you want to invest or to gamble.
 

If you go with NIB you will need to open a custody account, this is easily done in your local branch. There is an annual charge of €40 for this a/c but if you have free banking you don’t pay this.

You can then buy up to the cleared balance in your a/c.

Suits me, easy to use, €20 for small on line trades, and no annual fee.
 
Padraigb said:
First, establish in your own mind whether you want to invest or to gamble.
Click to expand...

Hi, I am prepared to risk losing the €1,000 and while I recognise that a deal on a share may be less risky than a spread bet (is that true?), spread betting attracts me because I can bet very small amounts in a given bet and there is no commission.

Or are there other, better ways of investing on the stock markets?
 
With such a small amount, there's no point in you buying shares. I've used the Sharewatch small trades service to buy before (used them because I wanted to take collection of the share certificates myself). They charge €50 a trade. So if you've got €1,000 and want to make two buys, you immediately need your investment to rise by 20% before you break even when you sell (remember there's a €50 fee for selling as well!).

To me, it sounds like spread betting is what you're after. Have a look at www.theirishinvestor.com, there's a chap there who actively spread bets. You might get some pointers and information on who to best spread bet with.
 
"I would like to invest in the stockmarket. I have €1,000 to invest - I am prepared to lose it as have a pension and I believe that I also have a good spread of 'safe' investments earning 4 - 7% p.a."

What exactly are the safe investments which earn 4 - 7% p.a.? Do you mean cash in the bank or are you invested in funds which may have an exposure to the stockmarkets with or without your knowledge?

For a small sum like 1,000 euro, I would not recommend taking a wild risk "Just to try it". You stand a very good chance of losing it all, never returning to the stockmarket and missing out on attractive long-term returns. Have you considered paying into a monthly fund like Quinn Life's freeway? This would reduce the risk and give you a wide spread of exposure to world stockmarkets for your money.
 
When I refer to 'safe' funds, I am referring to accounts with AIB, EBS, etc. - they are not returning the kind of money I am after when I contemplate the stockmarket investment but the funds are protected by the gurantee.

Thanks for the pointers to Quinn Life and the http://www.theirishinvestor.com site. I'll check both out. I have invested in the 'Freeway' type of fund that Quinn Life offer before and I have lost money (not with Quinn Life though). However, they have a good reputation and I shall explore that option.

When I start investing, I don't think I will be "taking a wild risk". At that stage, I'll have done my research and that will minimise the risk involved. I am prepared to take risk losing all of my €1,000 but that would not put me off returning to the stockmarket in the future.

I am not yet fully aware of the risks involved in spread betting but as I understand it, I can minimise my losses by setting a stop loss when I make the trade. Is this view too simplistic?
 
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