New to buying shares

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15th Feb '16 by munty8

7 comments 3463 reads

Hi,

I am new to Stockopedia what would you say are the best indicators to go buy when choosing shares?

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Munty8

Premium Member

7 comments

Source

15th Feb '16

The ones that work are always the best! :)

-- There are many numbers and rations that help and different investment strategies seems to rely on some more than otheres. However there is a general and long held view that a Shares Price Earnings ratios (PE) is helpful to understand and it helps classify different shares for comparison...Importantly forecast PE's also!...Maybe start by doing some basic reading about PE's before commiting any cash though Munty8.

Hope that helps for a start, but you are asking a rather big question!

Regards,
Source.

Ken Lowes

15th Feb '16

Don't be in a hurry to buy anything, Read, look and learn as much about what is available and then create a strategy that you think might suit your tolerance to risk, Then set up a few VIRTUAL portfolios using the amount of money you think you might wish to invest, don't use real money!!.
Questions you need to ask yourself are---- how long am I prepared to have my money at risk --how would I feel if the losses started to build up--- what is the annual % return I would be happy with and many others.
Listen to what everyone is saying but don't act upon it until you know why it is being said. Alternatively what better time to buy-- the markets are down twenty percent from the high, probably when they are forty percent from the high, who knows!!
Good Luck
Ken

JollyBiologist

15th Feb '16

I think I would use the Stockopedia Ranks to create a short list of possible companies. I agree with Ken that you shouldn't be in any hurry - spend a year running a virtual portfolio and see how you get on - but when you do finally summon up the nerve to commit your hard earned cash, maybe go for a company where you understand what they do and WHY they look like they'll grow. And DON'T fall for story stocks!!!

pka

15th Feb '16

I suggest you read these articles:

http://www.stockopedia.com/columns/stockrank-reviews-8/

shipoffrogs

15th Feb '16

Start by reading and re-reading The Warren Buffett Way by Hagstrom. 2nd hand copies available on Amazon for as little as a penny plus postage.

garbetklb

15th Feb '16

I'd read Paul Scott's "Small Company Valuation Reports" each morning. Whether you are interested in small companies, or not, they will give you one view of things that an investor might like to consider. The sort of things to read, think about & start to form a view on are : Price, PE ratio, growth, dividends, debt, management, credibility.

You might like to consider some form of collective investment initially - personally, in your position, I'd be tempted to buy a few Investment Trusts, having thought about what sort of things / places / sectors I'd like to invest in. Then have a good look at past NAV performance, present discount/premium, stability 7 track record of manager etc.

My only tip : DON'T buy companies who promise a great future once the product takes off and don't buy shares with lots of commentators on ADVFN etc bulletin boards.......

Good luck!

gus 1065

16th Feb '16

Hi Munty.

I agree with what is written above.

Also, depending on the amount of capital you are thinking of putting into the market long term and your personal tax position and investment horizon, you might also want to consider making use of this year's ISA allowance for you (and your spouse/partner if you have one). This would need to be done before April 6th. If you are not ready to pick specific stocks before then you could consider holding your investment in cash or maybe a general tracker or managed UT or IT.

Currently just over £15,000 per person per annum, this is a very useful wrapper to shelter long term savings whether you choose to invest in funds, ITs or specific shares. It is also quite a good way of smoothing out your investment timing if you can get into the regular habit of using the full allowance each year. I got into the habit with the original PEPs in the 1990's and now have quite a substantial sock of largely tax free capital gains.

Good luck.

Gus.

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Munty8

7 comments

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