Investing in shares...(and maybe a fund)?

[ilovereading]

Just that really. I've never done this before, but am intrigued to try this out for the first time, with a little money that has come my way that I don't need for a while. I know there are risks involved, and I've always been cautious, financially... but I have never made any money to speak of just by being cautious and economical.

If there's anyone out there who has a lot more experience and some wisdom in this field, I'd love to hear from you before I perhaps do something silly. Just one or two tips from your own experience, perhaps, to keep me on the straight and narrow?

[DoctorTwo]

The price of gold is actually still fairly high today. It is worth what somebody will pay for it

Upthread the OP stated she was being quoted a higher price than the spot price for actual gold, which indicates that gold is underpriced. At least your second point was accurate. And pretty soon, when western banks crash, gold will be $7000+ per oz.

[PigletJohn]

Or maybe it won't.

I bet all the mugs who bought gold three years ago, or six months ago, believed it was going to go up.

If you think you can find someone who will pay you more than the spot price for your gold, try to snatch their hand off.

Nobody knows what will happen when the Chinese banking crash comes, we only know it will be worse than the last American/European one happened.

[Goldenlab]

I am Goldenlab's husband, she knew i would like to comment on this thread! First of all if you have a mortgage pay it off, then make sure you have sufficient savings in traditional bank/building society accounts with various fixed terms that cater for when you might need/not need the money. These should ideally be in a tax free environment making use of your annual ISA allowance. Only then would I consider investing outside of that.

If you do have money available after that then I would advise you to be very cautious and invest via someone like Hargreaves Landsdown who are the largest in this field. I would strongly advise you to only invest in funds as it takes years and years to develop the skills required to invest directly in shares and even then you will make mistakes, this learning curve/experience is both costly and could give you sleepless nights.

The best advice for which funds to invest in would be UK High Income funds such CF Woodford UK Equity, whose manager has an excellence track record of performance over the long term. Again do this making use of your ISA allowance of £15,000 per annum currently.

Stocks and shares can be a minefield and there is strong debate over whether markets are over valued or not so be very careful. Perhaps invest your available money over a period of time and then you can see whether this is for you or not.

[ilovereading]

A thousand thanks to all since I last posted for sharing these insights, wisdom and benefits of experience. Despite some controversy I think every point has validity - it must often be a question of careful timing (possibly also seasoned with a dash of pure luck) as to what succeeds, when.
I find it inherently nonsensical that if I was cast away on a desert island, a fresh spring and some coconuts would do more to actually sustain my life than a bunch of share certificates or a bar of gold! - How odd that our society attaches so much value to such things. But it does, so at this late stage in life I am curious to explore the financial world tentatively, and initially, on a very small scale. I have bought a small number of the shares which my father swore by and stuck to over decades, just to see what happens there; considering one of the funds mentioned upthread; and toying with the idea of a (very small) gold bar...! But only with money which I could put aside for a long while, instead of spending it on treats or luxuries.

[ilovereading]

So grateful again to all posters, and do please keep on posting your tips and insights. I'm now getting keen to stop being a financial ignoramus and have started to buy the FT ( though it's a job to find one in this neck of the woods). A massive thanks too to Mumsnet for such a good forum with such high quality posters :)

[DoctorTwo]

Something weird is happening to the gold price. Despite the afternoon fix at $1142 (£715.54) the US Mint is pricing it at $1456.00 (£912.89) due to 'unprecedented demand'. They're also quoting a $28 premium on silver and have run out of Silver Eagle 1oz coins. Something serious is about to happen.

Gold and silver prices from this link. Price premiums from Planet Ponzi.

[ilovereading]

Thanks for this DoctorTwo. Have to say I am a bit mystified by all the ups and downs of gold . Is it that banks (or governments/institutions/peope) rush to buy gold when there is an imminent crash? - when, for some reason, it seems to become the must-have security. Then, at other times, it seems to become less 'valuable'. Can't really get my head around the concept... still wondering whether it's wise to buy some when others don't seem to set much store by it

[PigletJohn]

If you had some way of knowing when it was going to go up, and somehow could forecast better than the pro traders, yes, you could buy low and sell high.


Have you?

Which of these ups and downs could you have correctly forecast?

[ilovereading]

I have none of this knowledge, hence my wariness! As for those gold price charts - they seem pretty random to me, TBH. Thanks for the useful link.. it all helps.

[Rufus200]

If you want an easy read financial magazine, I read money week, which also has an app so can be read on a tablet. Explains everything that is going on in the financial world.

Get 4 issues free
//www.moneyweek.com/freetrial

[ilovereading]

Thanks Rufus, I am getting their email updates already into my Inbox - ('Money Morning' I think it's called? for Money Week) - so was looking today at this, and it had a feature from someone called Tim Price, with a link to click to see if your money is at risk - which I did... EEEK! This scared the bejesus out of me. He's saying (in a very lengthy video) that a massive crash is def. on the way, and the only way to stay safe is to subscribe to his special 'inside-info' mag which gives insider tips etc ... all at a cost of 99, BTW! He seems to be hinting strongly that, unless you invest in a very specific gold mine in Mexico (as opposed to bullion), or else in certain Japanese stock, we are all doomed.... I was almost convinced, apart from the small detail of having to part upfront with 99....

[ilovereading]

Don't know why pound sterling signs come out as question marks?!

[Want2bSupermum]

I have gold and silver. Shares are hard because you have no control. I still own shares though and I am a firm believer in dollar cost averaging. I take 33% of our savings and invest this amount every month in the tracker. I do it mid month as I figure others are doing this at monthend. The rest is invested in businesses that are proven. I do not touch shares of companies that have not yet turned a profit. I didn't buy Facebook or any of the other tech related stocks as no real operating profits.

I am an accountant so able to read numbers. Another easy rule to follow is to avoid investing in companies where they have negative cash flows from operations. You will see this on their statement of cash flows. If that is negative and cashflows from financing and investing are positive I get nervous about the long term prospects of the company and normally walk away. There are always exceptions but I do listen to my gut which tends to be right more often than not.

[atwitsendbutpaddlinghard]

After the party but ...

Don't buy what you don't understand.

Don't invest what you can't afford to lose.

Read Thisismoney.

Monevator monevator.com/investing-for-beginners-why-do-we-invest/

[SnowBells]

I invest but only for the medium to long-term (min. 5 years). But I also work in finance. I invest in funds because I know the fund managers personally. They are all long-term investors. While their investments can go up and down on a monthly basis (luckily, mostly up), over the long-term, they do go up.

Can be hard for those who don't work in finance - but then again, my mum (a housewife) was a lot better in investing than my very professional dad.

[jim8888]

Years ago I decided to start managing my own money and it was the best decision I ever made. I think I learned two big lessons. First, clear all your debt (outside of the mortgage). Secondly, invest regularly - monthly - in Index Tracker Funds. These maybe sound complex but they are as simple to invest in to, and withdraw money out of, as a normal bank Savings Account. You do kind of have to set your sights for saving in the medium to long term, say over five years, but it's worth it. I personally invest across Index funds in the UK, the US, Europe, Asia and some Global indexes. Charges are minimal compared to "managed" funds and in the long term Index funds outperform about 98% of those run by highly paid fund managers. I would stress to everyone that doing this is dead simple. Have a look at the Fidelity website which is where most of my investing/saving goes. And look at the Motley Fool and Monevator websites for great advice. As for buying and selling individual shares, it can be fun but be prepared to win some, lose some and eventually discover that you too are part of the 98% who generally cannot beat the market!