Ask your beginners questions here 🐣

[Freetrade_Team1 (Freetrade_Team)]

The below discussion got started after @Lbiney posted these questions:

@Lbiney

These list above are CFs right? Where can I find and buy all these shares for example Free trade? Or these listed share come and go

What is the meaning of all rounds or 2nd n 4th rounds and both rounds? What is punts. I want to start investing today if nothing at all at least Freetrade

[Rat_au_van (Emma)]

You can only buy them while they are crowdfunding. Some companies do this several times, these are called rounds. Freetrade aren’t crowdfunding at the moment so you can’t invest in them but will be at some stage this year

Strongly recommend you read all the topics in the introductory wiki before you do anything else

Introductory wiki

Have questions while reading these posts? Reading this & have a question that you’re too afraid to ask? Don’t be! Ask the community anything, in this topic for beginners questions - no question is too simple here. If you haven’t tried the app yet, you can check it out here. Contents Intros to investing from Freetrade When you’re ready to invest Intros to investing from Freetrade The one reason a lot of people don’t invest So why doesn’t everyone invest? What are the different ways that yo…

[Lbiney (Louise Bineyquaye)]

Thank you Emma for the breakdown much appreciated

Kind regards

Louise

[kenny (Kenny Grant)]

I’d second reading that introductory wiki link from Emma, it explains lots of stuff.

If you are just starting with investing I’d recommend:

• Make sure you have some cash savings first at your bank (a few month’s salary)
• Invest in stocks for 5-50 years, anything below that use a cash savings account
• Invest regularly (monthly after pay day is good) only what you can afford
• Invest in something relatively low risk, and don’t check it too often
• Never invest in things with high fees, particularly % based fees (freetrade is good for this)
• Ignore the fluctuations of investments over days, weeks or months as much as you can.
• Don’t invest money which you might need in a few years.
• Also look at your pension contributions and consider upping them, esp. if you have employers contributions (these are also invested in stocks).

So on to your questions:

ISA vs GIA
Freetrade ISA vs normal Freetrade account - when starting it doesn’t really matter. When you get to around £10k, open the ISA, so perhaps just start with a normal free account for now to avoid the fee. ISAs are important later when you save lots of money to avoid tax on profits, but low profits are not taxed.

Which Investment?

See this article on trackers - that’s a good place to start IMO as lower risk. Because of financial regulations against scammers/fraud, people shouldn’t give specific recommendations here, but here is a list of trackers, any would be fine IMO (you can find them under discover in the app):

• MSCI World - World companies
• S&P 500 - US companies
• FTSE 100 - UK big companies

Risk

Punt is just slang for a risky bet. When starting out, I’d start with low-risk. I’d avoid crowdfunding except perhaps some very small amounts for fun - if you can afford it it is worth the risk, if you don’t have lots of other savings it is not worth the risk. In terms of risk, I’d list things you can invest in from low risk to high as something like:

• Cash - only risk is inflation
• Index trackers (you won’t lose all your money but it can fluctuate wildly day to day)
• Individual stocks (you may lose all your money, though not likely in big stocks, fluctuates even more)
• AIM stocks (small stock market with small companies, you may well lose all or most of your money)
• Crowdfunding stocks (no way to sell for years (perhaps never), you may well lose all your money)

Crowdfunding is most risky and only a risk worth taking if you have lots of other savings IMO.

[Jim_mcgrain (Jim)]

Great stuff @kenny - I’d also add that if your employer gives you the chance to participate in any Sharesave / Share Incentive Plan it’s usually a good deal on offer.

[Lbiney (Louise Bineyquaye)]

You are a star !!! The amount of information I am getting is priceless. I am grateful for time and effort. I am learning very fast

I have set up a direct debit into my free trade a/c

Will start today

[Piggy (Marcus)]

Probably a dumb question but one that has puzzled me for a while. It’s about dividend. As far as I understand when cash dividend is paid the share price is adjusted down by the amount of dividend paid. So what this means (it seems to me anyway) is that you are gaining dividend in the form of cash but loosing out in terms of the share price. Assuming everything else being equal for a moment, is the net gain from the dividend payment netural?

I do understand that in many cases the ‘gap’ created by the dividend adjustment do close hence dividends would net gain.

[Raul (Ann Onymuz)]

This is far from being a dumb question. Quite the opposite.

A satisfactory answer implies having under consideration aspects like dividend yield or payout ratio, amongst many other things.

Here you can read about the effect of dividends on stock prices. Have fun

[Jim_mcgrain (Jim)]

Some investors purchase shares just before the ex-dividend date and then sell them again right after the date of record – a tactic that can result in a tidy profit if it is done correctly.

I’ve tried this strategy in the past and it is fiendishly difficult !

[Tel (Terri)]

Hi everyone……im new at all this & im totally lost on the whole thing……ive paid for some shares but thats the end of it all for me…do i have to sell them to make money or pay more money for them……ive not had any change in my account & im so confused…i just thought id have to buy stocks & just wait to recieve any earnings……i know u all will probably think im a bit daft but i dont understand all the big words to explain it all……i would appreciate any help with this topic…thank u…

[PoemofXtasy]

Before investing, what savings steps should you take first? Cash savings? Pension contributions?

[anon287192]

Take a look at r/UKPersonalFinance’s flowchart:

[Alexe (Alexander)]

What would happen to my shares if freetrade stopped trading ? Also how do I receive my dividends does cash just appear in my account ?

[Rat_au_van (Emma)]

You get an intercom notification when a dividend is paid. It’s planned to have an item in the activity feed as well.

Know your first question had been answered a couple of times but can’t find a link atm. They’re safe as they’re held separately is the short answer. But they aren’t going to stop trading.

[Alexe (Alexander)]

So the money from dividend will just appear in your account automatically on the date it is due to be paid ?
I wasn’t think they are going to just stop trading and run with my money but if companies go bust and just wondering how I would get hold of my shares if that did happen would i need to take note of a certificate number in order to transfer them to another broker ?

[Rat_au_van (Emma)]

It could take a few days after the due date depending how quickly the company sends it, if it’s paid by cheque etc

Found it. Earlier in this thread

Ask your beginners questions here

This generally should not be a problem. Unlike with banks, who hold your cash directly, brokers (including Freetrade) keep their clients’ assets segregated from their own pool of assets. This means that if Freetrade was to liquidate, you would simply transfer your portfolio to another broker. To give you a comparison, when Lehman Brothers went into liquidation in 2008, all of its clients’ $275,000,000,000 of assets were transferred to other brokers, mostly Barclays who took over Lehman’s inves…

[Rob14 (Rob)]

The key thing is that your investments are safe and secured by FSCS, who as far as I’m aware are actually very quick to resolve these things, so you wouldn’t have to wait ages to get back your holdings.

But in the unlikely event of Freetrade failing I think another broker would buy the client book so your assets would move over to them.

[MindBlown (R)]

Hi there, noob question here. If I buy shares in a company through here, am I entitled to things like listening in to investors meetings, share holder perks, voting where applicable, etc? If so, how do I go about proving ownership?

I’m sure there is a lot of variation between companies, but in general?