If you invest tiny amounts in shares what's your strategy?

[Orangeis]

I've decided to put just £50 a month into shares, using a free self investment platform. Last month in a flurry of excitement I bought 5 lots of tenners worth, what fun researching and choosing! But now I'm watching them and releasing the amount is too small to ever matter.
If you dabble with tiny amounts what do you do, what's your minimum investment in one company? It is very addictive at the start isn't it, I'm checking the app about 10 times a day!

I'm no expert, very much a dabbler like yourself, albeit with a slightly higher amount.

Rule 1 that I'm sure everyone will reinforce... don't dabble with what you cannot afford to lose!!! And to all those not in shares, this is not a get rich quick scheme, if you have an addictive personality or are a gambler in general, need a quick out etc, this is not it!

That being said, I would probably go for penny shares... go for the most insignificant shares you can find! With these, you're more than likely going to see big changes. They may go up or they may go down, but they usually change quite significantly. Shares like Amazon might change a few percent, but penny shares can adjust by whole orders of magnitude. Argo Blockchain was one that did this several years ago that I tagged on the tail end of, and my money literally doubled in the space of a few hours.

Really, there are two classic strategies... First is watch a reliable company that has had some bad luck, buy at a low and watch it recover. Second is watch all the shares and observe the ones that are improving and ride that (likely brief) spurt.

@C1N1C thank you. It is definitely "spare" money that I'm playing with, I appreciate I'm fortunate.

What's the least you'd bother to invest in one company? Have you had many opportunities to sell or do you tend to hold on to the shares and hope for longer term growth?

I've been doing lots of reading and am really enjoying the learning, I've signed up to a few newsletters etc, but they are really more aimed at people dropping hundreds if not thousands, rather than me with my £10 punts.

I have both... I have shares in gas and electric companies that are maybe worth a thousand. They go up and down, maybe 10% gain a year. OK, not a bad amount but not life changing. But I also have the flutter shares that I just play with as and when.

If you want that 'excitement', I'd say 100... of course this is entirely subjective but I'd say for the average person, it's a nice safe figure. You could lose 100, and sure it would hurt, bit it wouldn't HURT... but if it doubled, trebled etc, you now actually have that buzz :).

Second rule for me... (I said the first rule above)... is take the win or lose for what it is. If you lose, draw a line under it and move on, don't try to gamble again, or if you do, set a hard, fast line that this is solid last try. If you win, don't angst over the "what if" that you could have put in a thousand, or ten thousand and made millions. It will only spur you on to gamble larger sums that you might not be able to afford to lose... take the win; you came out on top.

Sensibly, if you happen to double your money (woo!), bank your initial investment and do what you like with the rest... that way you haven't lost anything :).

I have a few, I ditched my building society ones years ago and did ok, if I had held on for years like my sister, I would have lost money...have some in Easyjet now, advice from a broker friend....not a good investment but early days...only a few hundred pounds....have ignored his advice about a beauty skin testing company, a fad,...they have done badly so pleased i didnt buy any....not sure what to buy next.....?

Ah, I can't really offer suggestions as even people who do this for a living can never be sure.

I'd say just decide what sort of an investor you want to be... Will you be watching like a hawk and ready to sell at a moments notice... or are you a casual, maybe every few days or week sort of person? If the former, jump on climbing shares and sell when you're happy they've climbed enough... if you're more laid back, go for one you have researched or have faith will recover, and just sit on it.

I recently started to dabble and have been buying shares when bad news comes in and the share price crashes, if I don’t think the bad news is bad enough to warrant a long-term downturn. My portfolio is currently +40%, with the best share +80%. I think I may have been lucky though.

buying shares in individual companies is just gambling dressed up to look fancy.

I drip-feed money into a boring tracker from Nutmeg and then ignore it. I look once a year to see how it is doing (mostly well) but otherwise I don't even thing about it. slow and dull but also safe.

You're better off investing in funds whereby your exposure is a lot less. They tend to fund the top businesses in a market. The S and P 500 for example is a great one, has returned on average 8 percent annually for the last 2 decades. Unless you do your due research you won't make money dabbling in single stocks and shares unless you get lucky. The big money controls the market.

I go for blue chip reputable companies when there is bad news too - sudden dip, get in at the low, sell at profit on gain.

I don’t necessarily wait for dividends either, but will often time my sells leading right up to the ex-divi date (i.e sell at a high price when everyone else is buying just for the divi)

Or buy at the dip after the ex-divi date itself.

if you can gain upwards of 10% to 50% and do it 10 times over with 10 different shares, then you have gained a good lump sum - which is something new to invest, then start the process again.

Have done this for example with Royal Mail, Whitbread, Dunelm - all on bad news, all good gains later.

Also the markets dip each morning at 0830 - I used to look avidly then for the bad news blue chip companies (biggest fallers) and sometimes choose wisely there, sometimes even selling before close the same day.

Trading fees and tax applied to share purchases have to make it worthwhile though…..

Would also not be able to do it in £10 denominations though….

Thank you all, interesting thread.
@mobear did you keep the 80% share or sell? What a result that was!
@parietal I drip money into a LISA with Nutmeg as well, but this is so much more exciting 😁
@C1N1C I love the idea of pulling your original investment out then investing with absolutely free money.
@Identifyingasadolphin I love your advice about bad news days and selling before the dividend, where would you look for bad news, specialist financial websites or general news articles about who is doing badly?

@Orangeis I’m holding at the moment. I’m sure they’ll dip again but I don’t need the money and I’m curious to see how it pans out. Currently 85%+.

@mobear do you mind me asking who it is? This is the sort of thing I'd be interested in following to se the patterns to look for. It's officially my new hobby!

META, it dropped under $100 in November, it’s now circa $186.

can i ask where to buy the penny shared please...any links...have been looking for a friend and going round in circles...links to articles that go on and on and no place to actually buy . thanks

I spend £10 on shares at work, employee pricing. It's not going to change anything in my life, but I won't miss a tenner so I'm fine with it. I'd be interested in learning more about investing in shares though. It's a whole new world to me.

an awful lot on info on internet....too much info to read and digest....my friend bought a few easy jet shares for me but doesnt do the cheap penny shares...i have tried looking online but keep getting directed so sites that have hundreds of articles....i dont want to read about them....i want to buy them...its so frustrating....!!

If you're wanting to dabble in a small number of shares, I'd firstly pick a zero commission platform (like Freetrade or Trading 212) so your funds aren't being eaten up by share trading fees (usually lower for monthly investing but can be £10 per trade otherwise).

Rather than looking at penny shares, have a look at platforms that offer fractional shares. So you can buy 0.2 of a share in Meta or whatever.

Personally, I prefer actively managed funds and you can invest smaller amounts on the whole.

Also invest via an ISA so your gains and income are tax free

I buy individual shares and day trade and I also have S&S ISA’s.