Web trading has made investing simpler
SUNDAY EXPRESS - 15/02/04
(Click image above to see article as it
appeared in the paper)
Landlord Keith Gowthorpe runs a weekly share-trading club with a group
of regulars at his pub, The Woolpack, in Peterborough. The Internet
plays an important role in the club's investment decisions as well as the
transactions themselves.
"We use ShareCrazy.com," says Keith, 60. "I have
been messing about with shares since the 1980s but it is only in the past
three years it has become more than just a hobby." Keith used
to pick up information from newspapers and television but he now uses the
internet. "The Web gives me a lot more information about the
companies I invest in and of course it makes it easier to carry out the
trades."
Members of The Woolpack share club use online bulletin boards to pick
up hints about possible investments. Anyone can contribute to these
boards, often anonymously, so it is best to be sceptical of other users'
claims if you can't find evidence to back them up.
Keith says: "People's contributions can point you in the direction
of information about a company that you might have missed. But you
shouldn't believe everything you read on bulletin boards - and you should
never, ever, buy a share on a contributor's say-so. "Companies
have their own websites so you can look at their accounts and annual
reports and see news articles about them."
Another advantage of Web trading is the cost. "It's
generally cheaper to use online traders," he adds. "But if
you're the kind of investor who needs advice, you should use a broker you
can speak to."
The Woolpack club was set up with £200 each from its eight members,
who also contribute a further £20 a month. Investment decisions are
made collectively at a weekly meeting in the pub.
Good Advice from a Seasoned Speculator
Malcolm Stacey has published two books on investing in shares and he is
a director of online trading service ShareCrazy.com. He has the
following tips for successful speculating:
- Buy shares when the market is at the bottom of a bad patch - most
people buy shares when they are rising and sell in a panic when they
start to fall.
- Look for slow but steady risers which rarely falter.
- Wait for a good success story to meet up with a bargain share price.
- Buy into a company if its rivals are doing badly. Market
makers discount shares if most companies in the sector are doing badly
but one or two firms will always rise above the crisis.
- Buy firms with a low share price compared with others in the sector.
- When there are conflicting buy and sell signals, get out.
- Don't be too eager to sell when there's a panic on.
- When hesitating over whether or not to sell a share, ask yourself if
you would buy it now. If not, sell.
- Don't take profits too early if the shares keep rising.
- Don't be greedy.
- Look for good management. If the board has too many
dreary-looking people or no women, avoid it. It usually means an
old-fashioned outlook, which is death in the modern world.
- Never be discouraged. Pick yourself up, learn from your
mistakes and start all over again.
Stacey adds: "The snag with rules like this is that, simple though
they are, they are almost impossible to keep. But if you make up
your mind now to apply them to every buying or selling decision, you will
probably be very glad you did.
"If you lose money on a share, sell it. Don't expect it to
come back in value. They rarely do."
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