Stocks

newguy · Mar 27, 2020

This is a pretty interesting read, detailing average returns of the FTSE over the years: https://www.ig.com/uk/trading-strategies/what-are-the-average-returns-of-the-ftse-100--190318

In short, with dividends reinvested: a 21% over the past 5 years, a 121% gain over the last ten years and a 375% gain over the past 25 years.

lazarus · Mar 27, 2020

Some words from one of the greatest traders to date.
“Be fearful when others are greedy and greedy when others are fearful.”

If you are going to hold for over the next 5 years then you will do great holding the safer stocks.
(And I mean safe!) not Billybobs Meatballs inc but stocks like Coca-Cola

We don't know how low the market will go or when it will start to recover, so the best strategy right now, in my opinion, is something called Cost Averaging

Some portfolios are divided into safe and risky so you could do 10% risky and if it comes off great you get more x gains, if not, then so what.

Murray · Mar 28, 2020

lazarus said:
If you are going to hold for over the next 5 years then you will do great holding the safer stocks.
(And I mean safe!) not Billybobs Meatballs inc but stocks like Coca-Cola

I was thinking if McDonalds announce they're closing in the US wont that hurt their value? and after that it must be the safest bet ever surely long term

lazarus · Mar 28, 2020

Yes, but I would still use Cost Averaging as my strategy, So that way I buy stock using chunks of my total investment all the way down to dip

newguy · Mar 28, 2020

Murray said:
I was thinking if McDonalds announce they're closing in the US wont that hurt their value? and after that it must be the safest bet ever surely long term

I think the markets are future focused and so some of that may already be priced in. It looks like their shares went from 217USD in Feb to 162USD currently, but I'd say you're right that 'long term' it's not like they're going to go out of business.

It's a hard balance right now between health and economic factors, because there's a lot of interplay between them. For instance, the current shutdown has an obvious impact on employment, use of services etc, 'but' when things open up again, will the fear still be there for a prolonged period? Definitely certain demographics would be wise to keep a low profile from a health point of view for probably a year plus! Also, how long will it take for the wheels to start turning again when life and business has been on pause? All of this has to be weighed up against the fact that surely 'eventually' this horrible virus will be consigned to the dustbin of history and things will get back to something approaching normal.

lazarus · Mar 28, 2020

If only we knew which pharma companies are going to get the rights to manufacture and distribute vaccine!

newguy · Mar 28, 2020

lazarus said:
Yes, but I would still use Cost Averaging as my strategy, So that way I buy stock using chunks of my total investment all the way down to dip

Sounds like a sensible approach, as I think without a crystal ball in hand it's all but impossible to know where the bottom is in a market, and it's possible to miss out if you try to have perfect timing.

lazarus · Mar 28, 2020

Also, beware using leverage. Platforms love pushing high leverage. I'd use no leverage myself when it is this volatile. Small leverage should be OK. It is commonplace to use it when trading. But make sure you have the backup funds available and the option to maintain your trade if it starts going south.

Murray · Mar 28, 2020

newguy said:
I think the markets are future focused and so some of that may already be priced in. It looks like their shares went from 217USD in Feb to 162USD currently, but I'd say you're right that 'long term' it's not like they're going to go out of business

I thought that was reacting to closures in Europe, it tanked on the 10th, looks like burger king did too, I guess that was just a day of overall crashing

ian · Mar 28, 2020

The markets were over bought anyway, this has rebalanced them somewhat. Don't forget much of what you think (businesses unable to profit for X amount of time etc) will be priced in.

Murray, drop me a message and I'll explain what I've done, am doing.

Murray · Apr 6, 2020

I bought some stocks today, my first ever, big airlines and oil

Only put about 1/5 of what I hope to put in eventually but going to wait a bit longer and see how things develop

Been really enjoying learning about stocks and looking into companies over the past few days, been a nice distraction

I think I'm getting into the stage where I know enough to be dangerous and lose money lol

ian · Apr 7, 2020

You've probably done quite well out of the airline stocks this last couple of days. Given airlines are not off the ground again yet, or any sign of them being so anytime soon, I question whether they'll retain these prices.

Murray · Apr 7, 2020

ian said:
You've probably done quite well out of the airline stocks this last couple of days. Given airlines are not off the ground again yet, or any sign of them being so anytime soon, I question whether they'll retain these prices.

I haven't put enough in to make anything meaningful

I bought Carnival and Royal Caribbean too, afterwards I was thinking I don't know why I did that; going to take a long time for cruises to recover if they ever do

Only put $200 into Royal and $150 in Carnival

Then checked today and they jumped 30% and 20%, wish I put more in lol; Apparently Saudi Arabia's sovereign wealth fund purchased an 8.2% stake in Carnival

Have dipped since, all though rc are back to 27%

Maybe I should sell them and take the little bit of profit and buy back in when they drop again

It wasn't the plan to trade in and out, was suppose to just buy and leave for years

ian · Apr 7, 2020

Never a bad time to take profit.

newguy · Apr 19, 2020

Murray said:
I haven't put enough in to make anything meaningful

I bought Carnival and Royal Caribbean too, afterwards I was thinking I don't know why I did that; going to take a long time for cruises to recover if they ever do

Only put $200 into Royal and $150 in Carnival

Then checked today and they jumped 30% and 20%, wish I put more in lol; Apparently Saudi Arabia's sovereign wealth fund purchased an 8.2% stake in Carnival

Have dipped since, all though rc are back to 27%

Maybe I should sell them and take the little bit of profit and buy back in when they drop again

It wasn't the plan to trade in and out, was suppose to just buy and leave for years

I eventually decided to put 4k in an Lifetime ISA at the very start of January and another 4k after 5th April (as there is a £4k limit each year). If you fall within a certain age range the government tops that up with £1,000 extra each year. There are various rules and restrictions, but I figured I'd just do this each year (income permitting!) for an extended period of time rather than remove the money (I don't have a pension of any description so long term this might be about to bridge that gap).

Initially, I put the money into shares for William Hill and GVC (who own Ladbrokes), as I'm assuming that sport will begin to return before long and they will recover from the hit they've faced. So far I'm up about 1k in total, so that's not bad going really! Long term though, I will likely spread it out across more companies to deal with the ups and downs of how I'm sure these things can go.

Murray · Apr 19, 2020

newguy said:
Initially, I put the money into shares for William Hill and GVC (who own Ladbrokes), as I'm assuming that sport will begin to return before long and they will recover from the hit they've faced. So far I'm up about 1k in total

Nice profit

I looked into ISAs more but I think I'd prefer to risk the money myself and gamble

I've got £2000 total between Chevron, Exxon, Shellb, Delta, IAG, Boeing and Carnival at about £300 each

Sold Royal Caribbean for a small 30% profit and put the money into more Carnival shares

I'm going to gamble on oil and some of the bigger airlines long term, don't think I will put much more into cruises unless they drop again

I've learned in the past couple weeks promising news is all you need in a company to shoot up 20%+ atm, not much based on too much real world changes; Could have sold in and out of Royal Caribbean and Cineworld and others and made a lot if you're bold they way they jump up and down

I have no idea what I'm doing really but it's been a fun distraction, much like domains dropping it gives you something to look forward to everyday, fun.

newguy · Apr 19, 2020

Murray said:
Nice profit

I looked into ISAs more but I think I'd prefer to risk the money myself and gamble

I've got £2000 total between Chevron, Exxon, Shellb, Delta, IAG, Boeing and Carnival at about £300 each

Sold Royal Caribbean for a small 30% profit and put the money into more Carnival shares

I'm going to gamble on oil and some of the bigger airlines long term, don't think I will put much more into cruises unless they drop again

I've learned in the past couple weeks promising news is all you need in a company to shoot up 20%+ atm, not much based on too much real world changes; Could have sold in and out of Royal Caribbean and Cineworld and others and made a lot if you're bold they way they jump up and down

I have no idea what I'm doing really but it's been a fun distraction, much like domains dropping it gives you something to look forward to everyday, fun.

It sounds like you have a thoughtful approach to this, and as you rightly say it's certainly not the worst time to be getting involved. I've felt the same way about it really, something to get involved with when there is very little else going on right now.

Yes, I'm pleased to be up, though I missed the bulk of the rise with William Hill especially as it was prior to deciding to get involved. Crazily their shares when from £189 in late Feb down to £36 when sport was cancelled, then back up to £100 once people appreciated that sport is bound to get back up and running before long. I like the idea of empty betting shops had spooked people, but it's temporary, plus everything is going to be more online focused in future anyway.

Alan Fletcher · Apr 20, 2020

At the end of the day - if it's fun, why not! Everyone needs a distraction at the minute.

bonusmedia · Apr 20, 2020

Murray said:
I looked into ISAs more but I think I'd prefer to risk the money myself and gamble

You can still trade shares yourself within an ISA account.

newguy · Apr 20, 2020

bonusmedia said:
You can still trade shares yourself within an ISA account.

Yes, that's what I'm doing at AJBell (youinvest.co.uk). You can buy shares in just about any company there. Whereas with sites like Vanguard (vanguardinvestor.co.uk) they offer funds to invest in consisting of shares in various companies.

I suppose ISA is essentially a container that shields you have paying tax on profits, though if someone is thinking more short term and not investing mind boggling amounts I doubt they'd pay much tax on any gains anyway, as the yearly capital gains tax allowance is £12,000!!