Can you help a newbie??

[barbie2002]

Hi! I've been asked to put together a brief presentation on trading for some friends who are considering setting up an investment club. I've had some limited (and I'm sure accidental) success with spread-betting, but I need some help with the basics. I know that there's a lot of information out there, and on these excellent posts, but I want to start off with some gentle and easy-to-understand hints and tips.

a) How do you choose between spread-betting and 'normal' trading?
b) How can you pick the turkeys from the high-flyers?
c) Is there any method or mantra that you particularly hold dear?
d) What has been your biggest success? And worst failure?
e) Anything else, in particular dealing with other members of an investment club ...

Thank you everyone.

Barbs.

 

[ewilcox]

a) As far as I can tell the main people spread bet is for the fact they are treated as bets and are treated as such in tax terms. For an investment club I would have though you would be investing for long term growth and therefore spread betting will not be a suitable method of trading.
b) Turkeys v high flyers - in terms of what? Good trades?...well if you find out please tell me! Kinda very vague and broad question imho.
c) If you don't understand or know money management then don't even attempt to trade?
d) Prefer not to answer.
e) Be scrupulously honest, let everyone have an equal opinion on all matters and always listen to ideas you might yourself discount out of hand.

 

[Jbat001]

Hi! I've been asked to put together a brief presentation on trading for some friends who are considering setting up an investment club. I've had some limited (and I'm sure accidental) success with spread-betting, but I need some help with the basics. I know that there's a lot of information out there, and on these excellent posts, but I want to start off with some gentle and easy-to-understand hints and tips.

a) How do you choose between spread-betting and 'normal' trading?
b) How can you pick the turkeys from the high-flyers?
c) Is there any method or mantra that you particularly hold dear?
d) What has been your biggest success? And worst failure?
e) Anything else, in particular dealing with other members of an investment club ...

Thank you everyone.

Barbs.

a) Make a distinction between trading and investing. Investing primarily is constituted by buy-and-hold approaches. Trading is more the rapid movement into and out of positions for profit. Investment clubs almost certainly lack the flexibility and speed needed for trading (unless the members meet every day). Which do you want to pursue?
b) All markets (potentially) have the right stuff to make you a huge profit - it's just a question of using and adhering to the right methodology.
c) Buy low sell high!
d) Again, prefer not to say, but for me, anything more than £1,000 profit in a day is cause for celebration
e) A touchy area, but above all, make sure everyone has an equal stake, and make sure that investment decisions are transparent and fair. There are special rules governing investment clubs by the FSA that avoid some of the more onerous points of financial regulation, but bear in mind that an unregulated person is not allowed to give financial advice to another person (I'm an IFA by day, so I know). By advice, I mean the oral or written direct proposal that another person buy or sell any particular contract. Investment decisions must be made collectively, or if you lose money and one particular person was responsable for the advice, it could get very messy!

 

[Splitlink]

Hi! I've been asked to put together a brief presentation on trading for some friends who are considering setting up an investment club. I've had some limited (and I'm sure accidental) success with spread-betting, but I need some help with the basics. I know that there's a lot of information out there, and on these excellent posts, but I want to start off with some gentle and easy-to-understand hints and tips.

a) How do you choose between spread-betting and 'normal' trading?
b) How can you pick the turkeys from the high-flyers?
c) Is there any method or mantra that you particularly hold dear?
d) What has been your biggest success? And worst failure?
e) Anything else, in particular dealing with other members of an investment club ...

Thank you everyone.

Barbs.

I agree 100% with posts 2 and 3. Investment clubs usually go for long term. My personal longer term criteria are all fundamental., involving earnings, gearing and similar things.

Without wanting to be disloyal to the folk here I would recommend that you ask plenty of questions over on The Motley Fool and, if this is your club's first foray into the markets, take your time- no rushing until you have got everything sorted. Clubs mean handling other folks money or making recommendations. A big responsibility.

Good luck

Split

 

[Hook Shot]

I agree with much which has been said already - but would add that as an investment club you are taking on the role of "fund manager" for your collective resources. It might be worth finding how some of the good ones make their investment decisions and try and learn from them. Some of them lead investment trusts and have an excellent record and generally open about their methodology. My initial choices for investment trusts to learn from would be Rit Capital (Rcp) and Schoder small and mid cap trust (Scp). These guys are strong performers and you might learn alot from reading their annual reports. Rit capital is global and Schoder trust is aimed at UK Ftse 250 companies.

It doesn't stop you guys taking a flyer on individual stock picks but it helps to have a firm theoretical foundation. Andy Brough who manages the Schoder trust mentioned is regularly on CNBC Europe early in morning. He's usually quite open about what he wants to buy and why - and his record is pretty stellar.

Hook Shot

Ps I'm not recommending your club buy into these trusts NOW - but if the market gets hammered in future they are worth considering for long term growth. It's the knowledge I'm promoting.