Self Imposed minimum stock purchase

Hi Guys,

I'm new to the industry and have been sniffing around Spread Betting, but I'm interested in building an investment portfolio too.

I am invested in a few companies (William Hill, Disney & Atlantic Coal Plc)

What I'd like to know is, do you set yourself a minimum purchase amount when adding stocks to your portfolio?

Will you buy £100 worth or will you wait until £1,000 is possible for example.

Cheers,
Matt

Cowlinn said:

Hi Guys,

I'm new to the industry and have been sniffing around Spread Betting, but I'm interested in building an investment portfolio too.

I am invested in a few companies (William Hill, Disney & Atlantic Coal Plc)

What I'd like to know is, do you set yourself a minimum purchase amount when adding stocks to your portfolio?

Will you buy £100 worth or will you wait until £1,000 is possible for example.

Cheers,
Matt

Click to expand...

for me Matt its all about how much is available in my capital at that point in time and then how far the stop loss is will depend on how much I invest
I might have invested in half a dozen stocks and my capital is only 15k say but with only 6k left to trade
I calculate 1 or 2% (depending on the state of the overall market) of my remaining capital and then work out how much I can afford from that.
Only this will tell me if I can afford 100 or 1000 at the time

hope this makes sense. rather than a minimum purchase amount its a maximum purchase amount is what im after so that i never overexpose myself

malaguti said:

for me Matt its all about how much is available in my capital at that point in time and then how far the stop loss is will depend on how much I invest
I might have invested in half a dozen stocks and my capital is only 15k say but with only 6k left to trade
I calculate 1 or 2% (depending on the state of the overall market) of my remaining capital and then work out how much I can afford from that.
Only this will tell me if I can afford 100 or 1000 at the time

hope this makes sense. rather than a minimum purchase amount its a maximum purchase amount is what im after so that i never overexpose myself

Click to expand...

Hey - thanks for that. It's really insightful.

I'm building a different, more long term approach adding holdings as and when I feel I'm able to afford to.

I have no intention to sell any stocks any time soon. So I'm more concerned about trading fees etc.

Cowlinn said:

Hey - thanks for that. It's really insightful.

I'm building a different, more long term approach adding holdings as and when I feel I'm able to afford to.

I have no intention to sell any stocks any time soon. So I'm more concerned about trading fees etc.

Click to expand...

I get that Matt. I'm more for long term also, I will hold for years but I do have strict entry points i look for, and will add onto a holding but still within the stop loss level. I'll never just hold though especially if trend is changing. good luck though

malaguti said:

I get that Matt. I'm more for long term also, I will hold for years but I do have strict entry points i look for, and will add onto a holding but still within the stop loss level. I'll never just hold though especially if trend is changing. good luck though

Click to expand...

Thanks Malaguti. But no firm rule for you? For example no purchases under £1,000?

Cowlinn said:

Thanks Malaguti. But no firm rule for you? For example no purchases under £1,000?

Click to expand...

no, but because of the capital and the 1-2% rule its unlikely to..again i'm more into setting maximums rather than min
not really being much help am I!

malaguti said:

no, but because of the capital and the 1-2% rule its unlikely to..again i'm more into setting maximums rather than min
not really being much help am I!

Click to expand...

Haha! no no, it's all very helpful believe me. Essentially, what I'm getting as is, providing it fitted with your plan - you'd be happy buying £100 worth of stock.

Cowlinn said:

Haha! no no, it's all very helpful believe me. Essentially, what I'm getting as is, providing it fitted with your plan - you'd be happy buying £100 worth of stock.

Click to expand...

not really because it would have meant i'm maxed out on my capital
(using the 10k as an example I'd have to have been exposed to 90% of my capital to have left me with 1% of remaining and thats just on 10k)

but in theory if it was in my plan and my capital was a lot less, then if it was 100, then yes I'd only be buying £100 because that's the maximum allowable to me at that time

I have just started buying stocks, starting small as dont have any major capital to trade with at the moment, and also testing the water in these choppy China times!! I would say look to have around 5 stocks in your portfolio. Research each week each company, news director dealings, CEOs stepping down etc. Also don't put all your eggs in one basket (ie- 1 sector, all miners for example) diversify.

Also don't just look at buy and hold, for instance Reckitt Benckiser has put on and lost 100+ points about 5 times in last 10 days, that's opportunities to take profit and buy it back again, where as buy and hold you'd be watching it jump up and down