market -stock market issue 3
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8/8/2019 Market -Stock Market Issue 3
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38 marketthe market 39the
in quick trading, holding their shares for
a few days, hours or even minutes before
There have also been plenty of people
is a strategy requiring great dedication
and plenty of research and analysis of the
INVESTING FOR INCOMEInvestors in search of a steady stream of
income and with less of an appetite for
trading may choose to invest in stocks
that pay a steady half yearly or quarterly
night worrying whether share prices will
move against them but they also need
to be aware that dividends can be cut or
I
why the stock market exists, what
about researching stocks and how to get
to grips with some of the key terms and
A key reason that investors have
returned to the stock market after
the crash of 2008 is that leaving their
money with a bank or a building society
nothing, because even the best savings
rates at around 3% produce a loss in
stocks that produce dividend income at
more than 4% looks attractive and they
may also produce capital growth if their
“caveat emptor” , the
dividend nor the capital gain are
investment strategy to use to lower the
DAY TRADERFor some, stock market investing is a
intensity, prepared for the thrills and
are plenty of people who claim to have
made money buying and selling shares
investing 101
Before starting to invest in stocks and
shares it is as well to decide why and
how? The right strategy can help investors
through thick and thin because no one said
stock market investing was an easy ride.
Stock market
Part 3
Investing for income is a valid strategy
but it is as well to hold a variety of
way to do this is to buy a tracker fund,
one that invests in stocks within a
particular stock market index such as
A good, cheap way of doing this is to
buy shares in an exchange traded fund
exchanges just like the shares that these
considering investing in, to make sure
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40 marketthe market 41the
of its terms and whether it provides
income or whether the dividends on
can be bought and sold at any time
the market is open and apart from the
dealing costs, there are no other fees to
They are valued much less frequently
DIY OR EMPLOYING A MANAGER
funds is an important decision to take
it might not be better to hire someone
advisors (IFAs), banks and fund
managers offer such services in one form
they are “execution only” they merely
carry out instructions that you give them,
buying, selling and holding the stock for
you agree with the broker his terms of
reference – how much discretion you
back to you periodically on the results
they have achieved from investing your
Inevitably there are able brokers and not
in advance by searching the web, speaking
to friends and reading their prospectuses
TAXIt is also worth spending time thinking
about how to avoid paying tax on your
most people will be investing income on
which they have already paid income tax
Firstly, remember that each individual
from buying and selling shares are lower
entire allowance can be invested in stocks
and IFAs will all advise you or offer you
homework on terms, conditions and
you (and also your partner) get a new
allowance every year and they save you
personal pensions insulate you from
taxpayer you will also get an additional
you cannot take your money out until
and dealing charges to take into
read the terms and conditions carefully
so you understand the restrictions they
discretionary investment services are
Above all, once you have digested the
possible choices, checked the prices and
charges and considered your strategy,
some investment opportunities but the
chances are you will be able to seize
most successful investors, such as world
and invest long term in companies they
understand and which have scope for
By Richard Willsher
“FOR SOME, STOCK MARKET INVESTINGIS A SORT OF SPORT. THEY ENGAGE IN
IT WITH GREAT INTENSITY, PREPAREDFOR THE THRILLS AND SPILLS OFFLUCTUATING PRICES.”
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