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Will a policy of long term investing counteract any short term losses potentially caused by Brexit or Trump’s next tweet?

Is there a general rule of thumb on the best time to cut your losses and sell a constantly falling share/ETF or when to wait it out?

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Brilliant question! This situation, especially for a newbie like myself, would be a tortuous decision to have to make.

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Historically on a long enough timeline, the stock market beats cash.

For example, even if you bought at the peak of the last bull market in 2007, right before the crash, you would have more than doubled your money by now.

Whether that will continue, no one knows for sure but if you are 25 for example and have decades of investing ahead of you, you could benefit from the wealth creation that the stock market can provide. That’s assuming that you also have a long time horizon of course - so you’re not planning to buy a house with the money that you’re investing in 2 years, for example.

On your 2nd question, the only ‘right time’ would be when it’s right for you, based on your sentiment, analysis and research. What you could do is decide if you will “average down” (i.e. buy more, so the average price you pay for the stock or ETF is lower) or set a price or % change in the price when you will sell, ahead of time, as a strategy to manage your emotions. Rather than just reacting impulsively to price movements.

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:point_up:️100% and one of the hardest things to do when starting off.

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Newbie question here - I presume that this would be a potential response to a stock (a share?) decreasing in value? Presumably you’re “averaging up” (if that’s a thing) if the share price goes up?

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So I’ve been reading my way through the fantastic introductory wiki. Lots of questions come to mind (I’ll be back!), but I was wondering about this line from What Even Is a Stock?:

In an IPO, the current private owners aren’t necessarily selling their shares — in fact, often they legally can’t for some time.

I’d naively assumed that in the event of, say, Freetrade IPOing, then all the original investors would be bought out - with any tax liabilities that that entails. I’m now assuming that’s not the case - and the private shares can be translated to listed ones. Is that right? If so, is there a tax implication for this transfer? Would you be able to wrap the newly listed shares in an ISA, for example - or would you need to sell them first? On the timing issue, does anyone have any insight about why private owners might be prohibited from selling shares? Would this be agreed / voted on as part of the prep for IPO? Maybe to ensure share price stability? :thinking:

(Also, random probity question: would the Freetrade platform be able to trade Freetrade stock, assuming that it’s listed on, say, AIM? Are there any conflict of interest issues? I’m assuming not, but it crossed my mind and I’m curious! :slightly_smiling_face:)

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I can’t comment on exactly how this would work if / when Freetrade goes public at this point but as a general rule, yes, private shares can be switched to public shares.

I’d have to do a more thorough check before I can answer the tax / ISA questions too I’m afraid.

As you say though, sometimes founders are prohibited from selling their shares, there’s often a ‘lock-up period’ for employees shares. But investors may also want key employees to stick around, to help ensure that the company keeps up it’s good performance. Snapchat’s CEO committed to not selling any of his shares for 9 months after they went public, for example. Although unfortunately he didn’t manage to save the share price :grimacing:

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I’m new to investing. I was looking to buy some of Vanguard’s 'All-World High Dividend Yield ETF (VHYL). I was going to buy some individual shares using Freetrade rather than invest via the Vanguard website. If I buy individual shares will I still receive dividends? On the Vanguard website you need to have a minimum stake in many instances and buying individual shares seems like a good way to get around it. I was just wondering if I’d still get all the benefits.

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Yeah, you’ll still get your dividends :slight_smile:

But it’s something you should think carefully about, because by purchasing the stocks individually, you could expose yourself to more potential risk as you won’t get the benefit of the diversified/risk weighted portfolio that Vanguard will manage.

Edit - also forgot to mention, if you buy VHYL (or any other ETF) in the open market, you don’t have to make the minimum investment that Vanguard ask for, the minimum is simply the price of one share of the ETF (plus any applicable fees) :raised_hands:

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Just to give you a heads up - unfortunately this isn’t one of the ETFs that’ll be available when we launch. You can see what we’re initially planning to offer Stock Universe. So please do request this one & any others that you want to invest in here :raised_hands:

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Thanks for the feedback. I’d like to invest in Stocks that pay a Dividends and I thought VHYL might be a safe and steady option since it was a mutual fund. The fund itself has 1291 holdings and although I understand I’m not buying in to all those individual companies I thought by buying in to VHYL I’d still benefit from its diversification since that’s the purpose of the fund.

Do you think buying individual shares in VHYL would be worthwhile?

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Ah! Sorry I misunderstood, I thought you were suggesting buying the individual stocks that were being held in the fund, instead of buying the ETF. You’re totally right if you buy VHYL through a trading platform, you will buy the same mutual fund offering from Vanguard, just without having to go through Vanguard themselves, but as @alex.s said, it’s not going to be in the initial Freetrade universe, so you might have to shop around for something else until it’s available - some inspiration for you here & below

Best of luck :v:

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Thanks for the advice. I’ve sent in the request :slight_smile:

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Is Lloyds Banking Group (LLOY) a dividend paying stock?

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Yes it is - https://www.lloydsbankinggroup.com/Investors/shareholder-info/dividends/.

Apologies if I’ve missed this somewhere in my reading but is there going to be a minimum amount you can transfer to your Freetrade account from your bank in a single transaction?

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Good question, it’s £1 according to the help docs. Here’s a link to the page https://intercom.help/freetrade/getting-started/how-can-i-top-up-and-withdraw-funds-from-my-freetrade-account

Strangely I can’t paste in the Discourse app. Had to login on a browser :upside_down_face: ( edit - phone reset fixed it )

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Are withdrawals £1 as well? Can’t see any reason that I’d have £1 in my account and want to withdraw it but it’s good to know these things :grin:

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Not sure tbh, guess £1. I think the minimum amount you can invest is also a £1. I know it gets tricky if you invested xyz and were left with 99p :joy:

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Those penny stocks make you money yo!

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