Stocks

[Murray]

I don't know anything about stocks, now seems a good time to learn sat at home

Do you see any big opportunities atm from things tanking? short or long term

Are there airlines that are too big to fail? cruise ship companies? that would be worth buying stocks to sit on for a few years

What platforms do you guys use/suggest to do your trades?

Any recommendation on things to read/videos to watch?

Thanks

 

[ian]

Risky game to play, markets plummeted on virus breakout and have seen a partial resurgence despite a bleaker period to come. It is hard to understand how the markets are holding firm today despite the US reporting record unemployment of over 3 millions, and this only accounts for a small period of time; in the coming weeks and months, as the impact takes hold, I cannot honestly see how prices can hold; and if they do, all bets are off.

For safer option is index funds, which cover a wider spectrum of stocks, bonds etc, tailored to risk appetite.

Airlines are being saved, though most of them (in the UK at least) have sizeable cash to weather this storm. Unfortunately a lot of large corporations have little by means of cash because they've been buying back shares over the years to reduce their outlay in dividends; then they go to the government for hand-outs!

History would suggest that long term, stocks will always yield a reasonable return, but if you are looking at short term gains, you might be in for an emotional rollercoaster.

 

[Hay]

@Murray i would strongly advise you get a demo account to understand the basics, They will give you a pot of fake money to trade against real prices, if you get lucky dont jump the gun and throw real money at it until you fully understand the concepts.

Furthermore, Anything you load into stocks such as your initial starting balance... This should be money your happy to lose and you should enter the markets expecting to lose.. Never enter a market when in need and never use money you can not afford to lose, some people make the mistake of gambling X amount of money in the hope to double it in order to pay xyz.

I made a fair amount when bitcoin was climbing the charts but those days are gone (At least for now until we enter the next recession)

Remember... Trading is basically gambling, regardless of your skill or knowledge unless you have enough capital to influence a move in the markets to favour your trades or your in a pump and dump at the right times.

 

[Alan Fletcher]

I've been in banking and finance professionally for just under 20 years, and my advice would be if you are going to day trade, only trade small amounts of money you can afford to waste, and do it as a bit of fun if your learning. At the minute... my advice is don't trade! In this market, even the professional traders aren't making much money, you need volatility granted, but these are unprecedented market conditions, so at the minute you want to be as liquid as possible- the general worry is that we are going into a global depression as covid-19 continues to decimate the world economy. My one bit of advice.. the key to it, is coming up with some good trading situations that play out over 3-6mths, rather than jumping in and out of positions. If your analytical and you can foresee economic events two or three steps ahead, you can learn everything else!

 

[keys]

Trading is basically gambling

There are many parallels between trading and gambling, and participants would argue that sports trading is not gambling.

For success in either, research and experience are key requirements. Beginners' luck or high risk strategies can appear to be a substitute in the short term, but it takes a lot of time and effort to make consistent returns.

A big problem for newbies, is emotion. Losses are inevitable, and should be included in planning, therefore they are not a shock prompting hasty foolish reaction (further losses). It sounds obvious, but has been the downfall of some previously successful traders.

 

[Murray]

Remember... Trading is basically gambling.

IMy one bit of advice.. the key to it, is coming up with some good trading situations that play out over 3-6mths, rather than jumping in and out of positions. If your analytical and you can foresee economic events two or three steps ahead, you can learn everything else!

This is my thinking, you can tell me if it's stupid

I'm looking at stocks in airlines and they're all down 50-60% since late Feb

Big airlines and the stock market will recover eventually even if it takes 5 years

Surely from here a company like British Airways is destined to hit new heights? in terms of cash price anyway with all the new currency that's going to be created out of thin air

Wouldn't £1000 now hold it's value better in a too big to fail Airline companies stock in the next 5 years than in the bank?

Would the above be considered gambling? seems very safe to me, but my opinion on stocks is based on pretty much nothing

 

[crazihos]

Wouldn't £1000 now hold it's value better in a too big to fail Airline companies stock in the next 5 years than in the bank?

That is definitely gambling though and is the problem with stock picking. It's hard to know who is too big to fail.

Probably a ftse tracker etf is a more sensible bet - spreading your cash over a wide range of firms so failure of 1 company isn't an issue. The returns may not be as high but it'll be safer and is what Warren Buffet himself recommends.

 

[Alan Fletcher]

Well the airlines is a really good example- take Dart Group PLC, they own Jet2 and are probably the best capitalised/safest bet out of the main group of companies as unlike a lot of airlines that lease all of their planes, they own a lot of their planes, they are the only airline that haven't made redundancies, they have £150bill on the balance sheet, and I think they will grab a lot of new routes in the autumn from some of the others that are in trouble. Their share price tanked when all of this started as did everyone else's. Then rumours in the market of a £7billion bailout, share prices start to shoot back up, then the Chancellor announces that the government aren't bailing the airlines out after all - you would assume that would have a negative effect... but the price went up again unexpectedly. As people investing - were aware of all of the above information and had done their homework, they believe - they could be the last ones standing of the smaller airlines, should covid-19 continue for 6-12mths. So speculating/day trading short term positions at the minute is dangerous as it's so volatile, unless you have done the research in substantial depth. As a long term speculation - the airlines should be safe, "as an industry" but I agree with the above, there will be takeovers, there will be high profile airlines going bust, and new ones launching I'm sure after this, so a big branded airline like BA isn't always safe. It's just about doing as much analysis of the company as you can essentially - and then keeping your fingers crossed! Their are safer ways to invest £1000, bonds, etc.. not as much fun though!

 

[3gmedia]

I don't know anything about stocks, now seems a good time to learn sat at home

Do you see any big opportunities atm from things tanking? short or long term

Are there airlines that are too big to fail? cruise ship companies? that would be worth buying stocks to sit on for a few years

What platforms do you guys use/suggest to do your trades?

Any recommendation on things to read/videos to watch?

Thanks

Hi Murray, my son plays the currency markets and makes a nice bit of money on the side of his main job as a day manager at a small hotel.

Last year he made 45% net profit, not bad as a hobby, better than a savings account.

Last week he made over £1700 and this week he made £830.

I keep asking him to give me the heads up regarding how it works but the little bleeder will not teach me how its done!

 

[getmein]

Big airlines and the stock market will recover eventually even if it takes 5 years

But possibly not all airlines will. Remember that in the capital structure equity holders are at the back of the queue, if an airline goes bust from a customer point of view the airline may continue to operate but shareholders can get completely wiped out. So the prospect of losing 100% of your money is very real (or even more, if you enter the world margin and leverage - certainly not recommended until you are an experienced trader).

FWIW I think that companies like IAG (BA/Iberia) will survive and shareholders will get a nice return from the low point, but it's possible we haven't even reached that low yet.

Good luck!

 

[Murray]

But possibly not all airlines will

FWIW I think that companies like IAG (BA/Iberia) will survive and shareholders will get a nice return from the low point, but it's possible we haven't even reached that low yet.

I guess I will have to research as best I can what airlines are most likely to survive

I was reading that in Feb "Qatar has tightened its grip on the owner of British Airways, spending more than £450m on new shares"

Putting some money into IAG seems like a no brainer for the long term? isn't it inevitable it would go up in the next 5 years, probably double?

If not @everyone what am I missing

 

[dee]

If I had cash at the mo i'd quite happily stick it in some indices. Of course nothing is set, but I reckon if you take history into account you'd be quids in in a year or two. If you look at all previous crashes, the slope has come back and carried on as normal. UK100, SPX500, DJ 30..... all good bets IMHO. I'd wait though till next down leg.

 

[newguy]

I've often heard it said that it's "time in the market, not timing the market". As such, something like a diverse Stocks and Shares ISA with Vanguard that you contribute to and don't overly obsess about or tinker with for 10+ years doesn't sound like the worst approach.

There's certainly worse times to buy in than now. Admittedly it might not be the bottom of the market (who knows!) but in the long term that may not matter a great deal.

 

[keys]

@Murray I think you are a potential investor, not trader. Some overlap, but the strategies are very different.

In either camp, you are looking for value with facts to support your position. If you are after high returns it is usually an advantage to follow a market sector which you understand, and is of ongoing interest.

 

[Murray]

@Murray I think you are a potential investor, not trader. Some overlap, but the strategies are very different.

Yes investing is what i'd like to do, buy some shares and leave them for 2-5 years and hope they regain the 60% they lost in the past month due to the crisis when things return to normal

I don't plan on keeping a close eye on anything or day trading or anything fancy

Just buy and sit and hope

 

[newguy]

Yes investing is what i'd like to do, buy some shares and leave them for 2-5 years and hope they regain the 60% they lost in the past month due to the crisis when things return to normal

I don't plan on keeping a close eye on anything or day trading or anything fancy

Just buy and sit and hope

People not overly interested in tinkering or keeping an eye on things regularly often go for something like FTSE Global All Cap or one of the LifeStrategy funds at Vanguard: https://www.vanguardinvestor.co.uk/ 'If' you haven't used your 20k yearly ISA allocation, you could feasibly deposit both this and next years allocation over the next couple of weeks into a Stocks and Shares ISA, then any gains would not be taxable.

 

[Murray]

People not overly interested in tinkering or keeping an eye on things regularly often go for something like FTSE Global All Cap or one of the LifeStrategy funds at Vanguard: https://www.vanguardinvestor.co.uk/ 'If' you haven't used your 20k yearly ISA allocation, you could feasibly deposit both this and next years allocation over the next couple of weeks into a Stocks and Shares ISA, then any gains would not be taxable.

Ashamedly I know nothing at all about ISA's or what the "FTSE Global All Cap" is

It is just giving them your money to invest how they think is best?

What kind or returns can you expect? - I guess that depends on the option you choose and how much you put in, but if it's going to be like £10,000 to get maybe £300 a year then it doesn't seem worth it

 

[newguy]

Ashamedly I know nothing at all about ISA's or what the "FTSE Global All Cap" is

It is just giving them your money to invest how they think is best?

What kind or returns can you expect? - I guess that depends on the option you choose and how much you put in, but if it's going to be like £10,000 to get maybe £300 a year then it doesn't seem worth it

I'm no expert myself, but co-incidentally it's been something I've been looking into too .

Each tax year you're able to deposit 20k a year into an ISA (including Stocks and Shares ISAs) , the benefit of which is that you then pay no capital gains tax on any gains made. This can be useful if you invest, or gain, substantial amounts over the years.

"It is just giving them your money to invest how they think is best?"

Pretty much. There are different funds with varying risk profiles, but the "FTSE Global All Cap" is an example of a broad fund that ticks a lot of boxes. Another is Life Strategy, some have more emphasis on UK companies, others US etc. The fund I've been looking at an an accumulation fund, so effectively any dividends from companies you hold shares in are reinvested. The compound nature of this over time apparently is responsible for a lot of your gains, so you don't need the index itself to be sky rocketing as such.

Of course though, if the stock market has a dire time you could potentially lose money too (though it pays to remember that you will have only lost money if you cash out, if you're leaving it for years you could just wait it out). From examples I've looked into, due to the bullish nature of the stock market over the past several years, you'd have more than doubled your money if you invested it in something like this 10 years ago. Of course the past may not be indicative of the future, so the general consensus appears to be that the longer you just leave your money in there and don't react to events, the better off you'll be.

Being that the stock market has all but fell off a cliff of late (but has staged a partial recovery), it seems like it could be a decent time to invest (well certainly compared to a few weeks ago!).. It could of course drop much further over the coming months, but at the same time over the long term maybe that'd be a minor blip in the scheme of things.

 

[newguy]

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]

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.