Yeah I get itâs tricky.
I just searched the forum for âdividend paymentsâ and sorted results on most recent. I knew someone had recently asked a question via a new topic.
The result shows it was merged to this beginners thread here, but the link takes you to the start of this entire beginner thread. As I said, no one is going to scroll 1000 posts to find that âdividend paymentsâ comment.
Very good point. We should be able to put a post number in to the link.
Sorry, I donât understand you point. If there is already a relevant thread, you should then merge the duplicate topic into that one. If you instead merge all new topics into this gigantic thread, any useful information is buried, or we simply never get an answer.
Well almost, i have 2 in the green (both are USD stocks) but everyhting else UK in the red.
Started trading in July buying into Cineworld as a total ignorant newbie thinking id be helping them out! But since then bought more companies which i beleive in and use in my everday life (royal mail, tesco, natwest, lloyds, etcâŠ) but now down around 8% overall.
Is it just me ? Is it just bad luck ? Or blatant lack of knowledge? Or all the above?
Is it time to stop and cut loses or do you all think that things will hopefully improve over time?
Nearly all stocks are down. We all make mistakes when we first start. But the question to ask is are these good strong companies? Do they pay divs as this can make up for some of the losses. Do you need your money back anytime soon? If not just sit back and wait. Only a loss if you need to sell today.
3 months isnt very long tbh if you thought these are worthwhile investments what has changed apart from the drop in price.
I thought the same as you when I started I will âsupportâ companies that I use unfortunately that isnt necessarily the best policy.
I have tesco and natwest as long term holds so I wouldnt be worried about those, lloyds not looked in to them so couldnt comment. The post office would need a lot of research re the changes the management want to implement and a workforce that seems to think differently.
Not investment advice just what I think do your own research in all things, the value of your portfolio etc etc etc.
As a beginner, youâd probably be better off regularly buying an ETF such as VWRP.
If you do want to proceed with investing in individual stocks, Iâd suggest reading up on fundamentals and using a stock screener to identify good businesses.
You need to do your research on things like return on capital employed, gross margin, operating profit margin, free cash flow yield, debt, moat and so on.
Either that or make your life easier by just buying a passive fund.
@Da_MoLe Why do you think you are helping company X when you buy its shares? The money you spent did not go to the company.
The idea that you only make a loss when you sell is a truism but at the same time can bite you if you are really investing. There are many good reasons to take losses quickly. Some shares never ever ârecoverâ or take tens of years to do so. And there is inflation to consider. As an example, Look at this screenshot from Google Finance of a share you own:
If you had (for example bought these in Nov 2007) you would have been sitting on a wasted asset for the past 15 years with no sign at all that it will ever recover to that lofty high. That brings us to another point about shares - forget about the past. What you bought at is a sunk cost. You have to look at shares in terms of the future. The call you need to make is: âAre the business prospects improving or not?â. You need to have a clear handle on what âimprovingâ means.
I recommend as @rehpot suggests to consider not investing in single stock shares unless you have done your research. Consider employing a passive investing strategy. Look at this Topic Passive Investors - ETF Portfolio Discussion and read this answer How to diversify - #115 by bitflip.
Good luck with your investment journey.
No is the answer as freetrade is not whole of market so when new company IPOs it will be sometime before it appears on here.
Your options are to open an account somewhere else which doesnât charge for general account. Most donât. Download primary bid. Not all IPOs are on primary bid but there is a reasonable amount. You register your other account with them and they move your shares direct to the other account.
I have retained my HARGREAVES LANSDOWNE fund and share account so if there is something on primary bid that tickles my fancy and I have the money I will buy, it is then transferred into that account. Download primary bid and see if anything comes up that you would be interested in first.
Cineworld was definitely a mistake there debt is overwhelming. Canât see anything particular wrong with the others.
8% doesnât look that bad in the present market. Might even go as far as decent.
PS your not trading your investing. Pedantic I know but there is a difference
I started in November last year and I am in a similar boat, pretty much been one world problem after another since I started investing! I also made a number of rookie errors, which everyone does. My advice would echo others here and thatâs to try and invest in ETFs more. I initially went for individual stocks and itâs just quite risky for a beginner. Iâve been changing my portfolio over the last 6 months and being more ETF focussed and things are better. My heavy losses are all the individual stocks I bought at the beginning.
Some of your choices are also unlikely to make you any money in the short term. I held Lloydâs shares for 6 months or so and they went nowhere, highly unlikely to soar and unless you have invested a high sum, youâll make very little. ETFâs give you that smaller but more stable rise (generally speaking) and tend to be a safer bet. I invest a monthly sum into them. With the way things are just now I have been sticking to VWRP and the Global Clean Energy ETF, which has come down a bit in price so at a better entry point if you are interested.
Taking the date you use which is absolutely the worst time to buy as a one off, by my consideration and assuming you had bought 1000 shares then, you would have received ÂŁ1729 in dividends between now and then if you had reinvested those dividends the compounded amount would be higher.
I know this wouldnt equate to your loss if you had got in at the peak and sold today (I cba to work out the compound if you had reinvested all dividends back in to tesco shares) but as with all things its not black and white.
I did not have to choose that date - I could have chosen many other dates over 5 or even 10 years to make the point that share price may not recover even with well known shares.
But you could have made more. Much, much more. By selling and moving out into something which give you higher total returns.
The point that I am making is that the idea of âyou only lose if you sellâ is often a poor one (but apparently common with new investors). This is not - in general - a good principle to live by when you invest. When you buy things the cost is sunk. Later, when you do your periodic review you should be thinking about the underlying thesis of the investment - whether it still holds. I would sell even if the price had risen if my reasons for investing were no longer valid. I am happy to buy shares even when the price is rising for exactly the same reason.
You should be thinking about the future prospects of the investment (within a portfolio) when deciding whether to stay with a stock or not - one of those might be, just as you have very reasonably elaborated, dividends and reinvestment.
Thanks to everyone for all your input and advice. I notice this seems to be a minefield as everyone has their own reasons for investing (the company, the timing, the amounts, etcâŠ) ⊠if only we had a crystal ball!
I was hoping to part invest into growth shares which dont pay dividends, buy, hold sell when higher and then part invest longer term into other companies for the dividends, which i assumed reduces the daily stress of ups and downs.
Just being new, having started in July and seeing every single one in the red is rather demoralising, just hoping its something i wil get used to or hoping the market will rise at some point.
I noticed quite a few i invested in were already at 5 year (and even max ) lows but they all seem to continue dropping.
Cheers all ! Heres to learning the hard way and then asking questions ! Probably did those in thebwrong order !
I donât look at my investments on a daily basis. IMHO the portfolio graph has more value as âentertainmentâ than anything else. Long term investing by definition shouldnât require me to look at my investments daily. Indeed that is one of the values of passive investing.
Not a new investor but this is still my mind set although I get your sunk cost view. In my mind, I havenât lost if thereâs a chance the price can go up.
One of the investments I bought many years ago is down 75% (minus 80% at one point) but my buy and hold âfaithâ in the company stops me from clicking the sell button and I want to stay invested in it. Recently, Iâve been topping up to average down but being a little cautious given the current energy crisis.
FYI, the stock is Centrica (CNA).
What you are describing is Loss aversion (which is distinct from risk aversion). The short version of this well known phenomenon in Behavioural Economics is âYou feel the loss of ÂŁ500 more than you feel the gain of ÂŁ500â.
It is perfectly rational to hold a stock that is down if there is a chance that the investment thesis you hold is still valid or if a different thesis for that stock still suggests better market valuation. The question comes down to business prospects as the market sees them. As the previous discussion was pointing out it is not by any means certain that stocks will recover. It is not just Tesco or Centrica that fit this bill. I have friends who have made colossal losses on Vodafone (for example). They failed to realise that the âgrowthâ time in which Vodafone grew (talking about c. 2000) is not the present time.
To me âaveraging downâ in the manner you describe is a psychological crutch - you are still making a loss on the shares that you bought at a higher price even if the ones you buy more recently are sold at a profit.
BTW, the ideas behind Loss aversion are contained in an interesting theory called âprospect theoryâ. If you are interested you may wish to read, the very readable, section 2.3 of the Scientific Background behind the Nobel prize that was awarded for this work.
Could you do a short explanation on what intrinsically makes a stock go up even when not paying a dividend? As the money does not go to the company, you are essentially buying thin air in some respects.
I have been asked this recently and I can not answer this question exactly. They understand when a dividend is paid as this provides a form of cash reward, there is theory to a valuation.
Rly awkward thing to explain, maybe you can do it better?
Good question. Your share represents a % of the business. You are willing to pay $1 (share price) to own $10 of the (say enterprise/book) value of the business. If the book value of the business goes up such that the $10 of the business you own is now $100 ⊠your share price goes up to $10.
I think that is the basic idea. Grossly simplified of course.
This 3 minute video timelapse is eye opening by 2016 on the top players swarming into position. Great view on long term investing.
