buy pharmaceuticals online

Community ideas

Finance Friday: Stocks and shares ISA?

I’m still learning about trading on the stock market, but I find it interesting. Lots of people have a cash ISA to avoid tax, but you can also have a stocks and shares ISA, so your returns on buying and selling shares avoid tax too.

There are a few dealing services, many people use their bank. I use the Halifax and find it quite expensive for what they do. They do provide research facilities and some extra services that are useful sometimes. The annual charge for an ISA is 12.50 and each deal costs 12.50 too. They do a two hours ‘commission countdown’ a month when the dealing fee drops to 3.95. I used that 2 hours to sell RBS and buy Tesco, but when I tried to transfer more money into my account to buy more Tesco shares, I couldn’t. I think the system gets overloaded for those 2 hours. It does advise transferring money in beforehand.

I don’t like buying a lot at the same time. I bought slowly one by one until I had a reasonably diverse portfolio. My first purchase was on a rumour of a takeover bid. I could have sold at a profit, but I hung on for the bid. I lost the lot when the company ceased trading. I learnt a few things! The AIM is risky and you shouldn’t get too greedy. The two human emotions that drive price movements appear to be greed and fear.

Today the FTSE 100 and the all share indices are up about 1% and so is my portfolio, so I think I have a reasonably good balance now. Being diverse reduces your risks. If one company goes under, you don’t lose the lot!

This time last year my portfolio really got trashed. I later called it the Halloween horror. The culprit was Premier Foods that dropped spectacularly. They are only on 32.75 today compared to a high of 184, so I think I’m reasonably safe from a repeat performance. Hopefully, the only way is up for Premier Foods.  The directors seem confident and have a large shareholding between them.

The new boss of Tesco has options on quite a few shares in Tesco and so I’m sure he will be working hard to turn Tesco around. I hope he comes to some sort of deal with Premier Foods and other suppliers for a joint marketing and advertising campaign.

RBS is up about 4% today and I sold those in favour of Tesco, but it’s no good having regrets. They could go down again tomorrow and Tesco could go up. I prefer to look forward rather than back.

I’m always looking for bargains and so I have a ‘watch’ list. I would like to buy into a pharmaceutical to make my portfolio more diverse. I have several on my list, but I am waiting for a good time, when I can pick one up on a dip in prices.

There have been a few trends in the past year that are important. Consumers are shopping around more and going to discount supermarkets like Aldi and Lidl. They are spending less on home energy because the weather has been milder. Petrol and diesel prices are down too. While people have less money than 5 years ago because of the economic depression, they might have saved more to spend this Christmas. The discounters won’t have all the things they need at Christmas and so I expect the likes of Tesco to have a good Christmas.

Many people are saving more and looking beyond the pathetic interest they get on their savings accounts. The stock market takes some knowledge and skill, but you can make a better return on you money. I made 25% over 2 1/2 years on my RBS shares. That’s about 10% a year which is a good target to set yourself when investing on the stock market. My shares in Lloyds have more than doubled in about the same time.

What do you think? Please share you thoughts in the comments box. You can also follow me on Twitter.

One Response

  1. Pingback: The Review: Sex and Drugs | Mike10613's Blog

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: