Tips for Newbies šŸŒ± (starting with Ā£300)

What Korean company would you go for ?

I donā€™t know much about the Korean stock marketā€¦
Also, it is not available on T212.

I tend to stick with mainly Europe and a small amount of USA. At the moment I only have 2 asian companies in mind (1 Taiwanese and 1 Japanese) for when the markets are available on T212, apart from that I may invest in Emerging Markets or Asian ETFs once the markets situation returns to normality.

personally I think this is the worst bit of advice I have ever heard someone say they would tell a newbie at investing.

losses are only real when you sell, someone new to investing shouldnā€™t be trying to time the rise and fall of a stocks value for the day and certainly shouldnā€™t use a feature that provides no safety net. A stop limit fair enough, but never a stop loss.

you are also giving ā€˜tradingā€™ advice to a newbie ā€œinvestorā€. really bad combo going on here.

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The worst bit of advice youā€™ve ever heard is to practice strong risk and money management?

Scary stuff.

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Lols :smiley:

I think he just means, a stop loss normally results in a near zero chance for new investors to make money as they for the most part donā€™t factor in the volatile swings.

Setting hard limit stops I think is useful, but it needs to be mentioned hand in hand with allowing the stock enough room to ā€œbreatheā€.

For absolute beginners, the best route for them to follow is play with the practice account for a while then buyā€™nā€™hold a company or ETF.

Personally, iā€™ve only ever cut positions too short using Stops, only for the equity to rise on and later be proven correct, so I can see why some people are against them.

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When I put stops, I tend to put them 20-30% below the equity price, so they only trigger in case of a disastrous week for the stock. Unless a crisis or pandemic like Covid-19 comes along.
I only put it on some stocks, not all though. Most I am happy to hold even if they have a sudden dip.

50% company 50% etf is the way to go

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how do you do this, what do you mean?

I go 70% ETF 30% stocks

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Agreeā€¦ if people starting on the stock market cannot handle to see a -20% on their portfolio, youā€™re in the wrong place.

There are many books and videos and speeches of very successful investors (not gamblers or speculators) that are doing very well for decades, just go and grab some knowledge from them.

Itā€™s a very complicated market, thousand of people with all kinds of high level degrees donā€™t do well and absolutely nobody only winsā€¦ but following those people that ā€œlose lessā€ is already one great thing to do when starting.

I really have the feeling (always say that to some friends that want to start to ā€œinvestā€) that a big percentage of people on the stock market will be much happier and make more money going to Vegas.

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So whatever you invest in, it is guaranteed increase to a profitable position?

Sticking your fingers in your ears and telling yourself losses are not real is madness and poor pyschology.

If I bought shares in Tullow when they were 1400p, its now 27p, but my losses wouldnā€™t be real, right?

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You make a fair point.
:innocent: Technically though they are not realised losses though lol :innocent:

But yes, STOPs do have a valid place. Canā€™t really argue there. Just donā€™t make them too tight i guess.

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A price drop in a good stock is only a tragedy if you sell at that price and never buy more. To me, a price drop is an opportunity to load up on bargains from among your worst performers and your laggards that show promise.
If you canā€™t convince yourself ā€œWhen Iā€™m down 25 percent, Iā€™m a buyerā€ and banish forever the fatal thought ā€œWhen Iā€™m down 25 percent, Iā€™m a seller,ā€ then youā€™ll never make a decent profit in stocks.

Peter Lynch

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Well no offense, but you clicked buy button, so your conviction at time was that it is good investment. You have to ask yourself , is the thesis broken.

Poor Due diligence can bring to poor decisions.
But by buying great companies at fair price or lower almost in every scenario will give you positive returns in long term.

Ofc if you buy Apple at all time high when whole market is overbought, it might take longer to recover in case of downturn.

But anyway, choose solid companies with solid growth prospects and balance sheet, with fair valuation/price and you cant miss in long termā€¦

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Basically buy low and sell high, donā€™t let your emotions of percieved losses make you do it the other way around. Youā€™d be suprised how valid sticking your fingers in your ears and closing your eyes singing lalalala actually is. Unless you are just speculating on price.

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If all else fails:

:smiley:

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Sell at -15%ā€¦ is that too tight?

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Iā€™m assuming you are asking this in regards to stock price but is -15% is a huge amount of loss, you donā€™t want to be selling for a loss! I saw your allocations above, i understand that you are new to the game so why donā€™t you invest in some bluechip stocks rather than risking it on Cineworld? ( Assuming you are planning on investing for the long term) Disney is a good shout and is still at a reasonable price.

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Thanks! Completely changed my game plan now. Cineworld has gone as I saw the light.

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Itā€™s also called monkey picking if i remember well. :slight_smile:

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