Your Questions About How To Invest In The Stock Market Uk
1. Your Questions About How To Invest In The Stock Market
Uk
Mandy asks…
How can a person in America invest in the UK stock market?
The UK stock exchange has a couple of stocks I would like to invest in which are not listed in
the American exchange.
Steve Winston answers:
Your broker will place the trade for you in almost any country. As long as it is legal. The U K
should be no problem.
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2. Lisa asks…
how to invest £100 on the stock market in the UK? how much
would i make?
Steve Winston answers:
Firstly, i dont think its a very good time at the moment. Secondly, any trade would cost of at
least 10pounds (ie 10%) of your capital + stamp duty etc. (and thats if you put all your money in
one stock!) Best suggestion I would make is if you had to invest now, do so in FTSE 100 share..
Probably a share in retail or a bank if you want a "safer" option or if you want a punt invest in an
oil company or biotech. Tesco has given a 10% av return.. However very difficult to predict a
return (or loss!) in this climate! If you are a beginner open a Halifax Share saver account, lets
you trade for £1.50 per trade (on predetermined days).
Best advice for now is be patient, the markets are all about timing dont just jump in head first...
All the best.
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3. Susan asks…
how do I go about buying shares on the stock market? (UK)?
I'm 18 and live in the UK and I'd like to start buying shares because I've done lots of research
on companies and I now have money to invest in it. How would I go about doing this? (It's not
a massive amount of money) and it would be on the london stock exchange
thanks
Steve Winston answers:
There are a ton of online brokers in the world today. One company I know that does
international markets (you can buy any company on any exchange in the world including
london) is interactivebrokers.com. Give them a call and they will help explain what you will need
to start an account and start buying. Otherwise look in your phonebook or at your local bank for
a stock broker or financial adviser. They should easily be able to help you make a purchase (but
they will probably be more expensive than an online broker). Good Luck!
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4. William asks…
What happens when I invest in Japanese stock on a US exchange?
Ive been very confused lately with exchange rates as I live in UK. At the minute its a great time
for sharedealers to invest in US stock market as the pound is very strong. However I cant
seem to grasp what happens to my money when I invest on the NYSE in a japanese company
such as Toyota. How will the us exchange rate against the yen affect my investment?
A simple case study would be really helpful.
Thanks
Steve Winston answers:
The dollar-yen exchange rate will have no effect. If you by Toyota shares from a US broker
you'll either be buying shares in Toyota USA or an ADR for the Japanese stock. In either case
they are solely US investment vehicles.
However you should think very carefully about making investments through a US broker. There
are US tax consequences in this that can get expensive since you are a non-resident alien for
tax purposes. All dividends as well as all capital gains will be subject to a flat-rate tax (normally
30%) that is withheld at the source. That's particularly painful for capital gains as it's double the
normal rate you would pay if you were a US resident or citizen. You may also be liable for UK
tax on that as well, further watering down the profit.
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5. If you don't reside in the US, I would strongly recommend against direct investment in US
securities. You can invest in those securities in your home country in most cases without having
to pay US taxes on any income or gains involved.
David asks…
How to get started with the stock market?
Hi i want to invest money into stock market obviously hoping for a profit, i know it can be a
loss as well.
the problem is I know nothing about the stock market so can I have some guidance about
getting started and any website links where I can find the information.
I looked on some sites but the things they said did not made any sense so any help would be
appreciated.
Thanks. ( I am in UK so relevant information please)
Steve Winston answers:
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6. Please visit the website and contact them in this regard - www.dvpe.co.uk
James asks…
Help-i just DONT understand the stock market?
I live in the UK-am i limited to the UK stock markets, the FTSE etc etc, or can i invest in
foregn markets. How is best to do this? Go to a bank? Use the online things etc? Do you pay
taxes on stock purchases? Are these taxes automatically applied to any purchase? Also, if i
buy a stockand it somehow goes DOWN and costs less than what i paid for it, does this mean i
owe the difference?
Finally, if i need to sell as a certain time, when i say the proverbial "sell sell sell"-is there a
gaurntee that there will be anyone waiting to buy the stock off me? What if i want to sell and no
one wants to buy?
Steve Winston answers:
No youre not limited to the UK stock exhange.
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7. Get an (online) broker account with a bank (do some research into which is cheapest, not all
banks will charge the same fees)
i would advise you to read a book on investing first. The stock market is a jungle and if you dont
understand whats going on, you might loose a lot of money.
If you buy a stock for lets say €10 then youll be charged €10. If the stock goes down. And you
sell it, for lets say €7 youll have made a €3 loss.
Technically you wont owe... Because a stock is a % property of a company. As the value of the
company fluctuates, so will the value of the stock.
There is no guarantee that you can sell a stock youve bought. Especially in small unknown
companies. If you buy stock from big companies like RBS, APPLE, McDonald or the likes youll
almost always be able to sell teh stock again because shares changing hand per day reach into
the millions.
If i were you i would stick to stock until youve gotten the hang of investing. Stay away from
futures, and options until you get to know the market.
Robert asks…
How do I start investing - UK?
Hi. I want to start investing this coming summer and I think I want to invest in the stock
Market. I'm a management student at university and want to start early so I can learn how
everything works before I want to start really making money out of it.
In the long-run I'm looking for larger returns but now is just for educational purposes.
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8. My question is how would I go about starting to invest this way? Any information is welcome as
well as recommendations of books/website where I can learn.
Thank you
Steve Winston answers:
To Start Investing
It takes a long time to learn the stock market and it would help if you read some books from your
library and information online. Before you start investing in the market the first thing you need to
decide is what risk level you want to take. CDs backed up by the government has about 3-4%
annual return for the long term with a low risk. Bonds or Bonds Funds has about 5-7% annual
return for the long term with a medium risk. Stocks or Stock Mutual Funds has about 8-10%
annual return for the long term with a high risk and are more volatile than Bonds. A person
could make more than 10% annual return with the right investment. Usually the more risk you
take, the more return you will have, but not always. To see the Risk vs Return go to my photo:
http://i1142.photobucket.com/albums/n620/Chief-1/RiskvsReturn.jpg The stock market is basally
made up of stocks and bonds. Investment managers pick a group of stocks to make a mutual
fund or a group of bonds to make a bond fund. They even put a mixture of stocks and bonds
together and call it a Growth & Income Fund.
1- MUTUAL FUNDS: Mutual funds have a group of stocks (could be around 100+) invested in
different sectors, and manage by a professional. Managers have lots of schooling for investing
in stocks, around 8 years. So I think managers can pick stocks better than I can. You can make
a buy or sell order anytime of the day for mutual funds shares but it will not go in affect until the
close of the day. There are lots of different kinds of mutual funds that does not charge any fees
to buy it's shares and they are called Noload Funds. There are also some funds called Load
Funds that charge about 5% of your investment. Most funds has trading restriction and you may
not be able to trade more than 4 times a year. That's because it makes it hard for the fund to
make a good return if there is to much trading in the fund, causing the fund manager to make
more buys and sells and keep more cash on hand. Mutual funds are meant for long term
investors.
2- STOCKS: Stocks is more volatile than funds unless you spread you money in about ten
different sectors and know witch sector will do best. Stock trading restriction is only a few days,
not like mutual funds. If you own stocks, you will need to keep up with all the company's
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9. business so you don't get stuck with a bad stock. That could take a lots of time. If a person buys
just a few stocks he probably is hoping to make a bigger return but he may be taking more risk.
If that's the case, look at the leverage ETFs.
3- ETFs (Exchange Traded Funds): ETFs are like a mutual fund but trades like a stock and that
is the main differences between ETFs and stocks and mutual funds. There are some ETFs that
represents Index's. An Index is like S&P or DOW. Index's operate just like a mutual fund with a
group of stocks in deferent sectors, manage by professionals. You can't buy Index's because
they are not for sell. A company owns them. But you can buy a mutual funds or an ETF that has
the same stocks as the Index they represent. There are a lots of different kinds of ETFs for
someone to choose from. Some have 1x leverage, some have 2x leverage for aggressive
investors, and some has 3x leverage for more aggressive investors. There are some that
represent almost every kind of sector.
To buy stocks or funds, you need a broker account. You can find several good brokers that
charge $8.00 and under per stock trade and no fee on Noload Funds. Most broker websites
have good research tools. Some popular broker websites are Fidelity, TD Ameritrade, E-trade,
Scottrade and others. I think you need a min. Of $500 (some sites $2,500) to open a broker
account and need to be at lease 18 years old. If you not 18, you might could get your Dad to
open an account for you.
If you want more info, click my picture and read About Me.
Michael asks…
What websites are good for buying stock in the UK?
I'm looking to get into investing, I've read books etc and understand how the stock market
works to a pretty high extent.
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10. My cousin has shown me bank's websites that he uses but they are for US citizens, whereas I
live in the UK.
Can you suggest any websites which are safe and reliable to use to buy and sell shares?
Thanks.
Steve Winston answers:
Http://www.hl.co.uk/
Sandra asks…
What has been the difference between "investing in the stock
market" and a game of "musical chairs" or "poker"?
and why? why and how manyh still do it and how compared to UK or Europe vs. USA and
why? how about Oz?
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11. Steve Winston answers:
There's a big difference. While all three require some degree of skill and strategy, the more skill
you have and the better you strategize, the more successful you are likely to be, chance is a
significant factor in poker - no matter how good you are, if you're not getting the cards, you're
not getting the cards. Musical chairs, you never know when the music's going to stop.
Chance is a factor in investing, too. But the big problem is with exactly what is 'investing in the
stock market'. For too many, it's not actually investing at all. It's gambling, a game of chance,
where the more skillful do better than the amateurs. Buying individual stocks, trying to time the
market, day trading...all are activities pursued by gamblers, not investors.
Why do they do it? They're looking for excitement along with the chance to make money.
Well, making real money, by investing smartly for the long haul, is anything but exciting. It's
actually dull for most people, which is why most people don't do it and stick with it long enough
for it to pay off. Individual stocks are not something to own until your portfolio hits at least a
million dollars, and many experts suggest that figure should be even higher. You invest for the
long term by owning good no-load mutual funds, and by paying attention to them and
rebalancing your portfolio as needed. Not all top funds stay on top forever, so you can't just buy
a Fidelity Magellan and keep it forever. 20 years ago it was one of best funds you could own,
today, it's a mediocre fund that too many people still own.
Trust me, the good funds do own the good individual stocks. Let the professionals do the job of
picking those good stocks and deciding if and when to sell them. Even they are not immune to
the chance aspect, however. When a stampede mentality hits, like it did in 2008, even the best
managers can see their funds take a hit, but the best managers bounced back faster and
stronger.
How the US markets vary from overseas markets, I can't address.
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