Few questions from beginner.

[breadman]

linas
the article you read in a paper is about 5 years to late. the stockmarket and house building shares have been rising for the last 5 years, will it continue no one or at least not many know. before buying any shares you should go on the company web site read the reports and account, trading statements, brokers notes. also go to the websites of companies in the same sector as bellway etc, to see if the hole sector is trading in the same direction. look for shares with rising prices, rising profits, rising dividends, rising margin. as it happens bellway has all of the above. You then have to decide if you think the trend will continue. the main things that will affect the house builders are the supply/demand, interest rates and mortgage availability/affordability. I would also look at a chart and make sure 50 and 200 day moving average are flat to rising with the 50 day above the 200 day and the share price is at least above the 200 day moving average. I would buy as close to the 50 moving average as I could. in the case of bellway this would be £18.80 to £18.90. final thing set a stop which is the max loss you are willing to take.

 

[Linas1976]

Thank you very much for advice, breadman

 

[f2calv]

Given that Linas1976 doesn't appear to have any prior investing knowledge I'm sure that he/she wouldn't have a clue what a "moving average" actually is. So a lot of these good intentioned comments are probably wasted.
@Linas1976 - if you can't stomach a £25 dealing charge (and the stamp duty) when investing £10,000 then I think that possibly a cash ISA is a better investment vehicle for your tolerance to potential loss.

Alternatively when(if) you dump half or two thirds of your house builder stock, I suggest you use the HL "regular savings" feature, which allows you to drip feed money into stocks (ideally in different sectors) month by month, thus smoothing out any bumps in the road ahead. It's been statistically proven that investors who use this method see higher returns over time.

http://www.hl.co.uk/investment-services/vantage-service/regular-savings

i.e. invest £200/month into Stock A, £200/month into Stock B & £200/month into Stock C

The dealing charge for that is just £1.50

 

[Linas1976]

Given that Linas1976 doesn't appear to have any prior investing knowledge I'm sure that he/she wouldn't have a clue what a "moving average" actually is. So a lot of these good intentioned comments are probably wasted.
@Linas1976 - if you can't stomach a £25 dealing charge (and the stamp duty) when investing £10,000 then I think that possibly a cash ISA is a better investment vehicle for your tolerance to potential loss.

Alternatively when(if) you dump half or two thirds of your house builder stock, I suggest you use the HL "regular savings" feature, which allows you to drip feed money into stocks (ideally in different sectors) month by month, thus smoothing out any bumps in the road ahead. It's been statistically proven that investors who use this method see higher returns over time.

http://www.hl.co.uk/investment-services/vantage-service/regular-savings

i.e. invest £200/month into Stock A, £200/month into Stock B & £200/month into Stock C

The dealing charge for that is just £1.50

Thanks, I'll have a read about regular saving option. Can you explain how to calculate ''moving average'' ?

 

[f2calv]

Thanks, I'll have a read about regular saving option. Can you explain how to calculate ''moving average'' ?

See;

http://www.investopedia.com/terms/m/movingaverage.asp

A moving average is one of many indicators that traders use to analyse stock/indexes/currencies/etc - however a retail *investor* like yourself (i.e. not a trader) should really have no need for this level of detail given that you are (I'm guessing) looking to make a return over the longer term as you are holding your investment inside an ISA - which isn't the best suited to shorter term trading IMO.

 

[Linas1976]

See;

http://www.investopedia.com/terms/m/movingaverage.asp

A moving average is one of many indicators that traders use to analyse stock/indexes/currencies/etc - however a retail *investor* like yourself (i.e. not a trader) should really have no need for this level of detail given that you are (I'm guessing) looking to make a return over the longer term as you are holding your investment inside an ISA - which isn't the best suited to shorter term trading IMO.

it's not an ISA , it's 'fund and share' account which suited for share trading and of course i'm more interested in shorter term trading

 

[f2calv]

it's not an ISA , it's 'fund and share' account which suited for share trading and of course i'm more interested in shorter term trading

Ok my bad, well in that case I suggest you;

1) sell your shares and take the loss immediately (as someone else pointed out you bought on a whim and at an all time market high, which is never a good place to buying). Take the monetary hit as a lesson which will save you many £££ in the medium to long term.
2) purchase some investing & trading books and read them cover to cover - see the Educational section of these forums for recommendations (I would recommend the Naked Trader (4th Revision)).
3) paper trade/practise trade

Don't risk your life savings until you have learnt a lot more than you know at present!

 

[Linas1976]

Ok my bad, well in that case I suggest you;

1) sell your shares and take the loss immediately (as someone else pointed out you bought on a whim and at an all time market high, which is never a good place to buying). Take the monetary hit as a lesson which will save you many £££ in the medium to long term.
2) purchase some investing & trading books and read them cover to cover - see the Educational section of these forums for recommendations (I would recommend the Naked Trader (4th Revision)).
3) paper trade/practise trade

Don't risk your life savings until you have learnt a lot more than you know at present!

)) don't want to loose that much ) Yesterday morning my loss was -£400, today at one point it was -£279, so at the moment I'll read as you guys adviced, but still hold the money in that account with the hope my losses will be as low as poss.

 

[dearlife1989]

Linas, I have just read this thread and I am just plain shocked :-0 I cannot believe what I have just read

You know, there are people who actually deserve to loose everything and learn the hard way because they haven't bothered to spend any effort to understand anything. Do you fall into this category of people?

All brokers, companies, etc. state one thing over and over again, which is - get professional advice before investing! The first step is to get information, understand the game after which you try to get some experience with active risk management! What kind of a person goes and spends £10K without any knowledge and experience? You didn't even know about stamp tax transfer! Man!!

What returns are you hoping for? Time frame? Do you know much the share has to rise so that your get those returns subtracting all charges? Have you thought about anything?

It would be safer for you just to open a high interest fixed deposit account for this 10K and not mess with a game you didn't bother to understand...

People spend months researching, another few months on demo and small size account.... you cant just go and buy 10K shares like that man!

Many people here have said that you exit your trade immediately (not because they want you to loose money, but because you are in a game that you don't understand and you can loose MUCH more, including charges, etc.).

Exit, research, understand, debate which investment style might suit you and re enter when you are ready or else you will learn the hard way!

 

[Linas1976]

Linas, I have just read this thread and I am just plain shocked :-0 I cannot believe what I have just read

You know, there are people who actually deserve to loose everything and learn the hard way because they haven't bothered to spend any effort to understand anything. Do you fall into this category of people?

All brokers, companies, etc. state one thing over and over again, which is - get professional advice before investing! The first step is to get information, understand the game after which you try to get some experience with active risk management! What kind of a person goes and spends £10K without any knowledge and experience? You didn't even know about stamp tax transfer! Man!!

What returns are you hoping for? Time frame? Do you know much the share has to rise so that your get those returns subtracting all charges? Have you thought about anything?

It would be safer for you just to open a high interest fixed deposit account for this 10K and not mess with a game you didn't bother to understand...

People spend months researching, another few months on demo and small size account.... you cant just go and buy 10K shares like that man!

Many people here have said that you exit your trade immediately (not because they want you to loose money, but because you are in a game that you don't understand and you can loose MUCH more, including charges, etc.).

Exit, research, understand, debate which investment style might you and re enter when you are ready or else you will learn the hard way!

Thanks for reply man I understand what are you saying Naturally I'm very careful in life with decisions, but this time I acted really spontaneous I'm keen to learn a bit about this trading game, but I don't expect to be living from this I know I made mistake with this rushing, but as I said I hope my shares will rise back again, why shouldn't they ? Building market is quite healthy at this time, isn't it ? But yes - that will be my lesson anyway and I'm very thankful for your advices guys

 

[dearlife1989]

Thanks for reply man I understand what are you saying Naturally I'm very careful in life with decisions, but this time I acted really spontaneous I'm keen to learn a bit about this trading game, but I don't expect to be living from this I know I made mistake with this rushing, but as I said I hope my shares will rise back again, why shouldn't they ? Building market is quite healthy at this time, isn't it ? But yes - that will be my lesson anyway and I'm very thankful for your advices guys

"Naturally I'm very careful in life with decisions..." everyone says that... till they realise how delusional they are! Last year, 81 million USD was wire-transferred to Africa just from USA, by people who were "careful" while being convinced that they have won the lottery and need to pay some taxes upfront or pay for a "hot Italian lady" stuck in Nigeria to settle her "debts" so that she can come and visit you and get married! All of them think the same thing... that they are usually very careful!

"Building market is quite healthy at this time, isn't it ?" beyond shocked! How old are you man? At least do some risk management... make a small plan... how much are you prepared to loose before "the building market is quite healthy" concept start working? Would you be willing to accept your "investment" to drop to 9K or 8K before the market turns?

 

[Linas1976]

"Naturally I'm very careful in life with decisions..." everyone says that... till they realise how delusional they are! Last year, 81 million USD was wire-transferred to Africa just from USA, by people who were "careful" while being convinced that they have won the lottery and need to pay some taxes upfront or pay for a "hot Italian lady" stuck in Nigeria to settle her "debts" so that she can come and visit you and get married! All of them think the same thing... that they are usually very careful!

"Building market is quite healthy at this time, isn't it ?" beyond shocked! How old are you man? At least do some risk management... make a small plan... how much are you prepared to loose before "the building market is quite healthy" concept start working? Would you be willing to accept your "investment" to drop to 9K or 8K before the market turns?

U been funny with lottery thing, not that old to be that gullible
No, i'm not willing to accept £9K, I'll better wait till everything comes back and then reinvest those money in 2-3 different sectors/companies I'm patient
'risk management', 'small plan' - I make those notes, thank you!

 

[MajorMagnuM]

dont worry, keep an eye on it as it may be a felix culpa. God knows ive done well early on by making errors. doesnt last tho!

 

[breadman]

Thanks, I'll have a read about regular saving option. Can you explain how to calculate ''moving average'' ?

linas,
you don't have to work out the moving average yourself. just go to Hargreaves lansdown website click on, share prices stockmarket, search bellway, click on full interactive share chart, click upper indicators, simple moving average 50 and 200 day. here's the link to click on hope it works
http://www.hl.co.uk/shares/shares-search-results/b/bellway-plc-ordinary-12.5p/share-charts

 

[timsk]

U been funny with lottery thing, not that old to be that gullible
No, i'm not willing to accept £9K, I'll better wait till everything comes back and then reinvest those money in 2-3 different sectors/companies I'm patient
'risk management', 'small plan' - I make those notes, thank you!

Hi Linas1976,
I've blown my account in days gone by on a trade that went against me and I hung on, 'waiting till it came back'. I don't wish to scare monger and, to be fair, it may well recover and it will probably work out okay. For your sake, I hope that's the case. But it's a high risk strategy and, in the long list of rookie mistakes, hoping the price will reverse is quite high on the list. I recommend you follow the advice you've been given already which is either to sell now or, failing that, set a stop loss which caps the amount you're prepared to lose.

Your main problem is that BWY is likely to be being carried by a very buoyant market. A rising tide floats all ships. The minute the main indices start to falter, my guess is that the price of BWY will waterfall. I don't know for sure that this is the case as I no longer trade stocks and I've never traded U.K. ones. Perhaps others who have experience in this market will tell you how correlated BWY is to the FTSE. If I'm right, you'll need to keep a close eye on the index and be prepared to get out for a much bigger hit than you'd take if you closed out the trade now. On a positive note, if the indices continue to forge ahead to fresh all time highs, BWY might ride on the crest of the wave.
Tim.

 

[Atilla]

By the time the public press and magazines show interest, tipping companies - it is a clear sign share valuations at peak and we are approaching exhaustion.

Here's a terrific read... Don't dismiss the article as out of date... :smart:

 

[MajorMagnuM]

Hi Linas1976,
I've blown my account in days gone by on a trade that went against me and I hung on, 'waiting till it came back'. I don't wish to scare monger and, to be fair, it may well recover and it will probably work out okay. For your sake, I hope that's the case. But it's a high risk strategy and, in the long list of rookie mistakes, hoping the price will reverse is quite high on the list. I recommend you follow the advice you've been given already which is either to sell now or, failing that, set a stop loss which caps the amount you're prepared to lose.

Your main problem is that BWY is likely to be being carried by a very buoyant market. A rising tide floats all ships. The minute the main indices start to falter, my guess is that the price of BWY will waterfall. I don't know for sure that this is the case as I no longer trade stocks and I've never traded U.K. ones. Perhaps others who have experience in this market will tell you how correlated BWY is to the FTSE. If I'm right, you'll need to keep a close eye on the index and be prepared to get out for a much bigger hit than you'd take if you closed out the trade now. On a positive note, if the indices continue to forge ahead to fresh all time highs, BWY might ride on the crest of the wave.
Tim.

I can tell you that said company has utterly flooded the GB market with eye watering vol levels that show no sign of abating

 

[malaguti]

Hello everyone.
1. I'm very new to this thing. I opened HL share trading account and bought 500 Bellway (building company)shares at £20.14 that cost me over £10K, they charged me £11.95 for trade and £50 for stamp tax transfer When I asked them is this normal, they said yes, companies incorporated in UK are eligible for 0.5% stamp tax. DO you guys also buying shares from UK and paying 0.5% tax? Or is there a list of some kind offshore companies where you can avoid that tax? Or you don't bother about that?
2. What websites do you trade? I see LSE charges £9.95 per trade and Hargreaves & Lansdown - £11.95, I wish I could have seen LSE first
3. Do you trade on the brokers website or there's some kind of trading platforms/programs where you can monitor your shares processes/diagrams?
Appreciate if you take your time and answer to some of my questions, Thank you very much in advance

Good for you, really hope the investment pays off. I started a few years back in a similar situation. I wouldn't recommend it again, but hey we all start somewhere

I did learn some things though so hope this advice helps..your entry is on a whim, but don't also sell at a whim. take your time now to decide at what point you are willing to lose or gain and stick to it. you have loads of time. Selling now just because of your entry would be an awful decision so start a plan now.

technically there is nothing wrong with the stock, so if anything changes at least the conditions for entry were sound so don't beat yourself up over it even though it may not have been the best entry point but how can you know that without hindsight right?
right now it looks just like a pullback nothing more. only until the trend looks to be changing should you consider your exit strategy
something else I've learnt. the entry is not the important thing, but your exit is. so don't be quick to sell. stick to a plan for exit like i say even if the entry was a little misguided doesn't mean your exit has to be

also, take a look at this thread which might suit your investment style. Its a proven and successful method for investing

http://www.trade2win.com/boards/technical-analysis/134944-stan-weinsteins-stage-analysis.html#top

and unfortunately there is no getting away from stamp duty if you are holding onto uk shares. you could consider a longer term spread betting alternative which I've tried. Personally I'm happy with the relatively small cost of stamp duty compared to the slippage/dealer referral crap you get from a spread betting provider and its still tax free if its in your isa
good luck mate

oh and brokers..try iweb £5 flat fee cheapest around
i would consider getting your own platform rather than a broker provided one. look at stockcharts.com which are free for end of day viewing and now do UK shares, or look into prorealtime which is also free

 

[Linas1976]

Thanks for advice. yes, looks like I'm stuck with these shares here. But the good point is - I have more time to gather information

 

[gerryg]

By the time the public press and magazines show interest, tipping companies - it is a clear sign share valuations at peak and we are approaching exhaustion.

Here's a terrific read... Don't dismiss the article as out of date... :smart:

Market can't go indefinitely high, slump is necessary to cool down bulls a bit. And don't remember that the higher the climb the more pain you'll get from fall.

Don't play with overheated markets they can burn your fingers well.