NEED help finding STOCBROKERS!!!!!!!

[Fran8]

Hi everyone

I leave in the UK, and Im plannig to invest around £200 a month, I would invest in shares and the strategy that I use is long term.

The problem that I found is that all the like Td Waterhouse, E Trade etc the prices that the offer per trade is let say £10 (some of them a bit cheaper some a bit more expensive) and the yearly account maintainance £30 (again some cheaper some more expensive).
Let also add another £30 of selling and other expences like stamp duty etc.

So the cost for the year will be:

£10 x 12 months = £120 + £30 Account + £30 Selling = £180.
And all soposing that I spend the £200 in just one company and make only one buy only one stock per month, and that is only investing in stocks in the UK, to invest around Europe and US prices are between £15 and £17.

So if invest £200 a month or £2400 a year and I have costs of £180 a year. I would need at least an annual return of 7.5% just to cover costs.

Getting a pretty good return and not that easy to get 10% I would be left with only a **** return of 2.5%.

Can someone help me and tell me what to do ?
Where can I get a cheaper broker where will cover costs easily etc. I do not know what to do.
I thoght that one of the solutions may be to open an account with an American company like Scottrade that the offer trades buy and sell for only $7. But I tought that would cause me problems with the taxes etc. Is this right?

P.D- Dont tell me to get a higher return because I already know that one

Thanks

 

[MrGecko]

I cant see why any discount broker won't do the trick. I guess they can send you certificates etc.. if you really want them.

Moreover, if you are buying and holding, it might actually work out slightly better. If you aren't using leverage to work out your position sizes, you could use a discount broker, post some margin, and earn interest on the remaining balance - which wouldn't happen if you just bought them outright and stuck 'em in the bottom drawer.

try Interactive Brokers - no experience of them myself, but they come with a good reputation.

Direct Access Online Trading, Options, Futures, Forex, Stock

 

[Fran8]

Thanks for the reply

Not at the moment I do not use leverage.
I see that at the beginnig of your response you said that a discount broker will not do the trick but that if Im not using leverage a discount broker may work ?

I buy and hold for the long term

 

[NetTecture]

Well, seriously - with an account size of that dimension, and being a long term investor, a broker may simply not be what you are looking for. An index fund with investment plan (as your bank should have access to) should be a lot better. Yes, returns may possibly be lower, but then, the COST side is going to be a lot lower.

The overhead of running with a broker may simply not be what you are in for Sorry.

 

[MrGecko]

A discount broker should work whether you account for leverage or not. It's just that if you use a discount broker, you

a) will get cheaper comms
b) might get to earn a little interest on your balance that isn't assigned as margin for your stock position.

Of course, if you aren't actually interested in having shareholder rights, a simple Spread Better might be better - zero tax after all...

 

[Fran8]

What about an ISA account that is tax free do you guys know any stockbroker with ISA account as cheap as Interactive Stockbrokers (I had a look and looks good thanks for that)

 

[Hoggums]

If you are trading small amounts (<£500 per purchase) and you trade mostly FTSE 100 shares then the share centre is probably going to be your best bet. Their commissions are quite low for small share purchases in big blue chips.

 

[MrGecko]

Dunno if you will get sommissions as low as Interactive Brokers - or any discount broker to be honest.

Have you thought about putting on a long-term spread bet? There is no tax whatsoever, and no position limits or account cap; then you can use your ISA allowance elsewhere. Also, commissions will be comparible with IB's, perhaps a little better.

IG have a good reputation. Again, you can opt to choose no leverage whatsoever in determining your position size and let it run.

 

[Fran8]

I have never consider spread betting as I have always considered to be risky

 

[MrGecko]

Just a note: The IG link in the post above takes you to the CFD webpage;

IG Index | Spread Betting | Financial Spread Betting

This is the link for spread betting. A spread bet and a CFD are different instruments.

 

[Fran8]

I have never consider Spread Betting I thought of it as very riskie. Is it actually riskie?

 

[Fran8]

quote

Just a note: The IG link in the post above takes you to the CFD webpage;

IG Index | Spread Betting | Financial Spread Betting

This is the link for spread betting. A spread bet and a CFD are different instruments


Is that the best website for Spread Betting?

 

[MrGecko]

I have never consider spread betting as I have always considered to be risky

It can be risky, largely due to the leverage and inexperienced clients.

A spread bet is just a regular gamble like you would put on the difference between the goals scored in a footy match. You work out how many $'s you want to place per "goal" (in this case, pence per share); you set the reference as the price that you enter into the bet, and you earn / lose the agreed $ value as the currnet market price moves up or down. As it's gambling, it is totally tax free. In this case, you just work out how many shares you were going to buy, and take the equivalient $ per point (pence per share) spread bet.

You can even short, and use many more underlying;s (commodities, currencies, Interest rates, all sorts).

The "problem" with spread betting is that you are making a deal with the counterparty, who then have some say in what the final price is. A CFD has a listed instrument as it;s underlying (as far as I know), and so is much less prone to the conflict of interest that exists with spread betting companies and their clients

Often you hear tales of "stop hunting", where people claim their spread betting company has purposefully manoeverd the price of their instrument away from what is "supposed" to be the underlying, although these must be taken with a pinch of salt - in the main, spread betters are "trading" for entertainment, as a hobby, or for a second income if any) - much like trading in a games arcade. This is probably where the rumors of it being risky come from - driving a car is risky, but it neednt be if you know what you are doing.

CFD's are recognised as legitimate financial instruments - with the safeguard against being messed about by a spread betting firm comes legislation; I don't know what the tax situation would be, better seek professional advice.

Anyhow; provided you are using no leverage, and so deposit with the Spread bet company enough capital to cover your losses (and keep your position open) if the stock were to go to zero (maybe with a bit of wigglle room too), you should be OK.

Of course, you are taking advice from a stranger on the internet, so do your own homework. Caveat Emptor.

 

[MrGecko]

IG Index for spread betting

IG Markets for CFD's

 

[Fran8]

As I said before I leave in the UK, I know that some American companies like Zecco offer trades for just $4.50, much cheaper than all brokers that we have been talking about the problem is that the money will be in the US, for me that is not any problem but for tax purposes Iit may be, do you know anything about that?

 

[MrGecko]

If you bring the money into the UK it will be taxable. I suggest you research the spread bet route, there are some reputable, professional firms out there.

 

[Fran8]

Thanks very much for everything, I will have a closer look into spread betting.

P.D Nose que haces en Gibraltar, deberias estar en la feria de Sevilla jejejeje

Thanks

 

[Christiaan]

hey

have you tried fxpro big name I don't know if they will be cheaper.After you download their meta trader 4 platform you can trade a few stocks as well as a few indices.Don't know too much about stocks but I think you should try this company

 

[Fran8]

Thanks for the reply the only things is that I can not find the prices for stocks so I will phone them tomorrow

thanks