Stock performance history in £


(Kunal Singhal) #1

Hi! I just got access to Freetrade. It looks great. However I am not a huge fan percentage based performance charts. I would like to see the £ value of stocks over last 1 year or 1 month before deciding to invest. Looking at a percentage chart is slightly confusing.


(Kenny Grant) #2

Tracking stock price growth in £ can be very misleading - with splits and merges the stock price can vary dramatically, and also a 10p increase on a £30 stock is very different from that on a 10p stock - something which beginner investors often miss. Comparing stocks in the past requires restating values due to splits and gets really confusing, and means perception of value is skewed. So I think % is a better choice, particularly given Freetrade are targeting those new to investing.

To give one example, RBS shares are currently at £2.45 compared to Lloyds shares at £0.59. Lloyds fell from a peak of £6.50, and RBS from a peak of around £6, but because graphs are restated, if you look at Yahoo say you’ll see a share price of £70 (!) for 2007, because RBS did a reverse split on November 07, 2008 meaning owners of 20 shares now owned 1 share, the effect of which was to drive up the price from pennies to pounds, and remove the perception of a penny stock, thus obscuring the huge fall in value. Comparing them now a beginner might naively think that RBS is doing much better and worth a lot more, and a memory of a drop from £6 to £2 would be really misleading if you didn’t know about the reverse-split. Also if both went up 10p the change in value would be very different and hard to calculate in your head, and that’s all you care about if you are invested, not the absolute share price, because the % growth is what changes your investment, not a change in pence.

All these reasons make pricing stock growth in pence/pounds not very useful and a graph of % changes is better. I’m pleased Freetrade have taken this decision for stock charts, in fact I’d rather see % growth on the portfolio chart too (as well as an absolute figure above).


(Vladislav Kozub) #3

Removing existing votes is becoming difficult due to the abundance of good ideas proposed. I am surprised no one raised this one yet!

Whilst that is exactly right, the chart will quite clearly indicate how sharp the growth is. For £30 to be 10p up, the change will be almost flat, whereas 10p up by 10p will be very steep.

Do you think the percentage graph will spot the split? I think it is just data taken directly from the LSE and changed to % using a formula, but the information is purely dependent on the source.

Also, whilst Freetrade’s aim is to make investing simple and friendly for the first time investors, this approach should be balanced for the app to suit the majority of users. A traditional £ graph is something that will be relevant for many people and discounting this option will not appeal to everyone. Having a toggle for £/%, on the other hand, would have been the solution working for all.

Oh, and a fun fact about splits:

When googled “Rightmove share split”, Freetrade Community was the third on the list! :joy:

#FreetradeEducates :slight_smile:


(Big Boss) #4

Sickkkk


(Luke Bebbington) #5

Provide both options perhaps? Something as simple as tapping the graph switches between £/%


(Kenny Grant) #6

Yes that’s true, but I think people starting in investing tend to trust prices in £ far too much, I know I was guilty of this when learning about shares years ago. A % growth figure on the chart, and a £ price above is the right mix IMO.

Do you think the percentage graph will spot the split?

It would be restated just like the £ figures I imagine, but is less confusing I feel, as if you have a memory of a stock at £6 10 years ago say and didn’t track the split, seeing it at £2.50 gives you a false sense of the fall unless you consult historical charts (which was more like £6 to 24p (figures might be wrong)). If you see it fall 100% or whatever it’s far clearer what is going on.

I do think the strongest argument against growth in £ is just that it distracts and doesn’t impart the important truth - if a stock is up 10% I want to know that, not do mental arithmetic in my head just to arrive at the growth figure which impacts my savings or decisions to buy. Fundamentally investors should not really care if a stock is 12p or £12 - they do, which companies sometimes exploit, but they shouldn’t.

A traditional £ graph is something that will be relevant for many people and discounting this option will not appeal to everyone. Having a toggle for £/%, on the other hand, would have been the solution working for all.

Perhaps I’m missing something, can you explain why it would be relevant/useful to see growth charted in £? I haven’t seen a positive case for growth in £ except familiarity, and given its downsides, that’s why I’d be against it, but would be interested to learn why people want that.

When googled “Rightmove share split”, Freetrade Community was the third on the list!

This is really interesting, and highlights a huge benefit for free trade from having this forum and having it filled with financial advice, I feel there is a dearth of disinterested advice for investors (in the vein of the very early Motley Fool before it became a content farm) which free trade could allow users to fill while avoiding giving advice themselves.


(Vladislav Kozub) #7

I guess it would be more of a personal preference than genuine reasoning, and based on other users’ sentiments, those who gave their feedback, having a price chart in addition to the percentage is a common wish :slight_smile:


(Kunal Singhal) #8

I think it is probably how I am used to look at these charts. I like to be able to quickly understand high, low and average prices in the last month. I don’t have a scientific way to use these numbers, but it just helps me make a decision.


(Emma) #9

I’m apparently unique in that I like it the way it is. Graph shows me the trend and I can see from the price at the top roughly what’s been going on. Don’t need actual £ value or dates on the x axis. But maybe I’m doing it wrong :woman_shrugging:


#10

I’ll add a little controversy. I’m not really a fan of smoothed out / curvy graphs, I like the spiky bits. :smiling_imp:


(Adam) #11

Performance history in £ is the more traditional route, but as others have said, I don’t think it’s the most useful way of presenting historical returns and can be misleading.

I like % as it makes it easy to compare the historical returns of one stock vs another or the broader market, eg Barclays vs the FTSE 100. We’ll be releasing more tools/features that will help with this.


(Big Boss) #12

Agree!

Then we’re going to need to differentiate between time weighted and money weighted returns.

In need of a blog post! :joy:


(Adam) #14

Have you been eavesdropping on our team meetings? :wink:


(Richard varga) #15

I’ll admit it would be nice to have more advanged charts however I’ve always used trading view for my TA anyway no matter what exchange/broker I use. Also it would be impossible to see all my indicators on my phones screen anyways…


(Big Boss) #16

Haha! I wish!

I pity whoever’s going to write the blog post. I have enough trouble explaining it to my clients! :joy: