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Hello! Several beginner questions, if I may.


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Hello traders,

My first post on this forum so please be kind aha. First of all, very nice to meet you! I am a newbie to financial trading, though I have been sports trading for a few years so have knowledge of trading mechanics but I still have some basic questions. I have deposited £1K into a live account and plan on creating my first portfolio today. I am planning on sitting on some positions for 6/12 months initially before taking any profits to explore forex. So, whilst I am at this learning stage, I was just hoping to create a nice, diverse, basic portfolio. Problem is, I don't know how best to split my funds.

My initial plan:

I have chosen 14 companies I would like to invest in. I was thinking of putting a flat £70 into each (£70 x 14 companies = £980). Is only having £20 freely uninvested wise? Is the plan to invest as much of your capital as possible at any one time or to allow 50% (or some other % as a rule of thumb) for wiggle room as the stocks meander up and down in value?

Also, how do I invest exactly £70 when, for example, a stock is worth £140? Can I buy half a stock? What's the minimum £ I can put on a stock (or a fraction of a stock)? Is this the normal way of investing or do beginners usually vary £ on each company? I don't want to be disproportionate with my funds, inviting risk. If I can't break up a stock, does that mean that even with a £1,000 bank I am limited to how much I can buy? Apple is currently around 113/114 does that mean I need to have AT LEAST £113 to buy on stock, I can't invest £70 into the company to keep my portfolio nice and even? Basically, is there an easy way of simply throwing £70 at 14 seperate companies with intent to sit on those positions for a while.

Second question, I'm having trouble searching for things on the mobile app. FTSE 100 has a little red crosses next to it and says "(Data Only)" and S&P500 isn't coming up in my search results (See attached pictures). Berkshire Hathaway Inc - A has a little pen symbol next to it whereas Berkshire Hathaway Inc - B has the green dot. This leads me back to my first question. I have googled the reasoning for the split, Class B is marketed more for long-term investments - can I not buy class A until I have £344,415 in my account? Which would be best (if the former is possible to buy) to buy for somebody like me, with a small starter account?

Third question, I assume the company name + "(All Sessions)" is the one I want? Just want to confirm that and hopefully kill any misconceptions I may have early.

Thank you in advance for all your help!

CPerry :)

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Hey @CPerry, thanks for this post! 

On 24/11/2020 at 10:45, CPerry said:

I have chosen 14 companies I would like to invest in. I was thinking of putting a flat £70 into each (£70 x 14 companies = £980). Is only having £20 freely uninvested wise? Is the plan to invest as much of your capital as possible at any one time or to allow 50% (or some other % as a rule of thumb) for wiggle room as the stocks meander up and down in value?

Our minimum consideration for UK shares is £90. With regards to strategy I'm unable to help however there are loads of people on the community that would love to help. 

On 24/11/2020 at 10:45, CPerry said:

Also, how do I invest exactly £70 when, for example, a stock is worth £140? Can I buy half a stock? What's the minimum £ I can put on a stock (or a fraction of a stock)? Is this the normal way of investing or do beginners usually vary £ on each company? I don't want to be disproportionate with my funds, inviting risk. If I can't break up a stock, does that mean that even with a £1,000 bank I am limited to how much I can buy? Apple is currently around 113/114 does that mean I need to have AT LEAST £113 to buy on stock, I can't invest £70 into the company to keep my portfolio nice and even? Basically, is there an easy way of simply throwing £70 at 14 seperate companies with intent to sit on those positions for a while.

When buying stock you can't buy a percentage. When you bring up a deal ticket instead of typing the amount of shares you are able to change it to the amount of money you want to spend on the stock. 

On 24/11/2020 at 10:45, CPerry said:

Second question, I'm having trouble searching for things on the mobile app. FTSE 100 has a little red crosses next to it and says "(Data Only)" and S&P500 isn't coming up in my search results (See attached pictures). Berkshire Hathaway Inc - A has a little pen symbol next to it whereas Berkshire Hathaway Inc - B has the green dot. This leads me back to my first question. I have googled the reasoning for the split, Class B is marketed more for long-term investments - can I not buy class A until I have £344,415 in my account? Which would be best (if the former is possible to buy) to buy for somebody like me, with a small starter account?

On the share dealing account we don't offer access to indices (FTSE, S&P, Wall st e.c.t.). These markets can be traded on our leveraged accounts, which is why there's a red dot. If there's a green dot it means the market is open to trade. If there's a blue dot it means the market is closed. 

I hope this helps and if you need anything else let me know :)  

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Hi, my 2 cents.

Regarding "All sessions" https://community.ig.com/forums/topic/3364-what-is-all-sessions/

 

It is wise to break down your entries into multiple companies to diversify your risk, but bear in mind that you are not accounting commissions and dividends. With 1K including commissions per trade you might not be able to trade in those 14 companies.

Also think about that you are selecting US companies, that will require to prepare your account to trade in the US. If your account is in pounds you will have to account the conversion rate into dollars on every operation.

I would suggest if you are starting that you should keep it to companies in the UK that pay dividends out. At least for a couple of months until you get familiar with the platform and its routines. There are many posts in the forum from people that complain about how things turned out after completing a cycle. They basically didn't understand commissions so their strategy started to fail after they realised how the platform worked.

Also I think that 14 companies might be difficult to track at the beginning. People that make it in this game trade 2 or 3 markets that know very well and sometimes they expand to a 4th or 5th if they see the opportunity.

It is as well wise to keep some remaining amount in the account, so I wouldn't trade the full amount into your selections, your trades might go against you and if you keep an amount as an insurance you will be able to handle price moves in a more efficient way. Maybe keep 500 out of those 1K as an insurance in case things go wrong.

Good luck !

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Hi again,

Thank you very much everyone for the initial guidance! If the minimum is £90 per UK Share then I think I’m going to make each one a nice, round £100. I want to go for a semi-aggressive start so upon reviewing my plan, I think I’ll go for 6x £100 in half a dozen UK companies.

RE: All Session

I’ve read the thread within the hyperlink and this makes sense to me, except the writer said this is “With American stock we also offer some as 'All Sessions'”. I’ve been suggested to start off by looking only at UK stocks so how do I know that ‘something’ I am about to buy is UK based and doesn’t come along with any of these hidden fees/commissions that I’ve been warned about? Or is ‘All Sessions’ simply what I want to look out for and my money will go to the London Stock Exchange as I am from the UK?

I have shortlisted some UK stocks I am considering, other than looking for those that have a high dividends number, what else is a good trait to look at? I’ve looked at recent earnings and company news already.

With this sort of investment do investors usually go for i.e. 6 well-established slowly (but constantly) growing companies or do some of you recommend throwing in at least one ‘maybe boomer’. Do you mix big stocks with mid/small stocks or just stick to the big boys when starting out?

 

Any other tips to ‘handle price movements’ once the first set of orders has entered the market? When looking at my portfolio, is the amount near the word ‘Available’ how much I currently have if I were to close all my trades now INCLUDING the commissions subtracted or not?

I see four words at the top of the app, to confirm my understanding:

Available: Current equity I have, so after my trades it would be approx. 9 hundred and something because it accounts for commission or would it show £1,000 and these fees are hidden until the point I make the exit trades?

P&L: If Available was £1200 then this would be +£200?

Acc Value: ???

Funds: How much of my money is tied up once an opening order has been made? So with my plan £600 when I first start?

Once again, thank you to everyone who has chipped in to this thread so far! Much appreciated!

CPerry :)

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Hi Cperry, in my opinion its not cost effective putting such small amounts into individual companies......I think ig charges £3 commision only if you have placed 3 or more trades the previous month, otherwise the standard £8 commission applies. So if you only invest £100 pounds the commission 8 + stamp duty 0.5% means as soon as you buy the shares , you are 8.5% down......so just to breakeven you have to make up this loss. Even if you trade regularly and get £3 commission its 3.5% down. compare with investing £1500 (with £8 commision and stamp duty) you would only be charged about 1% ...

on small amounts, freetrade or trading 212 would be better as there are commission free...and one or both of these platforms allow fractional trading

re us shares, if you have 14  companies in mind, surely you know if its american or not without checking? 

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