The FTSE

[worsleyweb]

I once ran a seminar for Lloyds Bank staff. I spoke to one lady who had worked for the bank all her life, as had her husband. They had paid their £250 a month into sharesave accounts for around 10 years or so and the shares they held at one point were worth £250k with a 5% dividend. As the price fell, they held tight as they always had the “it cant fall any further it’s a blue chip bank” - they lost £225k of value during the banking crisis. It was a heartbreaking story as this was a couple who were not managers or anything, just savers who believed in their employer.

ouch. I spread my shares across 5 holdings for that reason.

 

[Jordie]

I thought the same when I bought RBS after it had fallen by more than 60%.
That didn't end well for me!

I would only advocate investing in individual shares if you are happy to accept lots of volatility and possible loss. The upside may be great but strap yourself in, as logging on and seeing your investment down 10% in a day isn’t for the faint hearted unless it’s money you can afford to write off if the worst comes to the worst.

That reminds me of the old saying "never try and catch a falling knife".

 

[worsleyweb]

Rolls Royce roller coaster has started down 10% today - i have just gone in double my original stake!

 

[west didsblue]

I thought the same when I bought RBS after it had fallen by more than 60%.
That didn't end well for me!

I would only advocate investing in individual shares if you are happy to accept lots of volatility and possible loss. The upside may be great but strap yourself in, as logging on and seeing your investment down 10% in a day isn’t for the faint hearted unless it’s money you can afford to write off if the worst comes to the worst.

As you've said, there's no companies that are too big to fail. About 20 years ago I bought into Marconi after it had dropped by 90% thinking that it couldn't go any further. It then dropped another 99% and I lost the lot. Marconi was the successor company to GEC after the defence electronics business was split off and at one point GEC was the biggest company in the UK. Hopefully R-R won't go the same way.
Another horror story was M&S which I bought into around 2005. I'm probably still 75% down on my investment although the dividends were good for many years which probably covers about half of that.
That's why I keep about three quarters of my investments in funds which are spread geographically and in different classes of investments on the basis that the fund managers should have a better idea than me. Of the remaining quarter invested in individual shares I've had some good successes as well as a few nightmares, but I've got those spread round different sectors as well so it's not too much of a roller coaster - unless there's a pandemic of course!

 

[Millwallawayveteran1988]

As you've said, there's no companies that are too big to fail. About 20 years ago I bought into Marconi after it had dropped by 90% thinking that it couldn't go any further. It then dropped another 99% and I lost the lot. Marconi was the successor company to GEC after the defence electronics business was split off and at one point GEC was the biggest company in the UK. Hopefully R-R won't go the same way.
Another horror story was M&S which I bought into around 2005. I'm probably still 75% down on my investment although the dividends were good for many years which probably covers about half of that.
That's why I keep about three quarters of my investments in funds which are spread geographically and in different classes of investments on the basis that the fund managers should have a better idea than me. Of the remaining quarter invested in individual shares I've had some good successes as well as a few nightmares, but I've got those spread round different sectors as well so it's not too much of a roller coaster - unless there's a pandemic of course!

Yes I remember it well. Sounds sensible. I prefer funds now to individual shares. Mainly because I am getting older and not as much time to make it back. I have the odd dabble now and again but only for a very small % of pension fund.

 

[nellyonthewing]

I have Vanguard ISA ETF's & done pretty well last 12 months.. Tempted to increase in new ISA year but that would take me over £85K protection.....Is that risky?

 

[hampshireblue]

One word-diversification!

 

[west didsblue]

I have Vanguard ISA ETF's & done pretty well last 12 months.. Tempted to increase in new ISA year but that would take me over £85K protection.....Is that risky?

If I were you I'd go for something different to spread it around a bit. Someone mentioned Baillie Gifford funds on here which seem to be a good bet.

Thinking about it, Vanguard funds are primarily index trackers. I would definitely diversify to some actively managed funds as well. You're relying more on the skill of the fund manager but there's a better chance of doing well when the markets as a whole are doing badly.

 

[journolud]

I have Vanguard ISA ETF's & done pretty well last 12 months.. Tempted to increase in new ISA year but that would take me over £85K protection.....Is that risky?

I thought the £85k protection was for bank accounts or what have you, it wouldn’t protect against a stock market crash?

 

[Tommy_Catons_Perm]

As you've said, there's no companies that are too big to fail. About 20 years ago I bought into Marconi after it had dropped by 90% thinking that it couldn't go any further. It then dropped another 99% and I lost the lot. Marconi was the successor company to GEC after the defence electronics business was split off and at one point GEC was the biggest company in the UK. Hopefully R-R won't go the same way.
Another horror story was M&S which I bought into around 2005. I'm probably still 75% down on my investment although the dividends were good for many years which probably covers about half of that.
That's why I keep about three quarters of my investments in funds which are spread geographically and in different classes of investments on the basis that the fund managers should have a better idea than me. Of the remaining quarter invested in individual shares I've had some good successes as well as a few nightmares, but I've got those spread round different sectors as well so it's not too much of a roller coaster - unless there's a pandemic of course!

Ha. I did the same with marconi and also lost it all. But it was only about £100.

Also vaguely recall I had shares in GEC at that time and it was acquired by British Aerospace to become BAE Systems. I was given 1 BAE share for every 4 GEC share I owned. The price went up too so it was a nice little earner.

 

[hampshireblue]

I thought the £85k protection was for bank accounts or what have you, it wouldn’t protect against a stock market crash?

That was my understanding too.

 

[west didsblue]

Ha. I did the same with marconi and also lost it all. But it was only about £100.

Also vaguely recall I had shares in GEC at that time and it was acquired by British Aerospace to become BAE Systems. I was given 1 BAE share for every 4 GEC share I owned. The price went up too so it was a nice little earner.

BAE shares have bobbled up and down between £4 and nearly £7 for the last 20 years but the dividend has been steady. One of my recent successes was selling a load at £6.70 towards the end of February last year. They dropped £2.40 over the next month along with the rest of the stock market due to the pandemic, they're still only £4.75 now although they have been a bit higher over the last year.

 

[worsleyweb]

Made 7 percent on Rolls Royce today since this morning. Very volatile.

 

[doots]

Can't remember who gave the tip on Blackberry but thanks, 160% up.

 

[Jordie]

Can't remember who gave the tip on Blackberry but thanks, 160% up.

That would be @Skip Donoghue

 

[AlgarveBlu]

BAE shares have bobbled up and down between £4 and nearly £7 for the last 20 years but the dividend has been steady. One of my recent successes was selling a load at £6.70 towards the end of February last year. They dropped £2.40 over the next month along with the rest of the stock market due to the pandemic, they're still only £4.75 now although they have been a bit higher over the last year.

i'm in at 4.70 on this one a month ago as part of the dividend portfolio - it has very good dividend cover which is important going forward - a very good stock with Glaxo for anyone looking at Div weighted portfolio

 

[west didsblue]

i'm in at 4.70 on this one a month ago as part of the dividend portfolio - it has very good dividend cover which is important going forward - a very good stock with Glaxo for anyone looking at Div weighted portfolio

Definitely a good bet at that price. Not impacted too much by Brexit due to most exports being outside the EU so should recover well and, as you say, dividend is good at around 5% yield. Slight worry bead is that the UK government might cut defence spending in spite of the recent announcement to increase it. U turns seem to be a thing with this government.

 

[I'm no cynic but...]

ouch. I spread my shares across 5 holdings for that reason.

One tactic I would suggest is to install an automated Stop Loss order with each investment you make. It's not compulsory to do so but it can be adjusted, up or down, to suit your temperament. Example: You buy a holding of shares for, say, 100 units per share but you are aware that the market does it's own thing and could go either up or down. You don't want to lose too much if you get it wrong so you could set your stop-loss at around 85 or 90, as an example. If the market goes against you, the holding will be sold off automatically at that price. If the price goes up, you could change the order to suit and hopefully lock in a profit. Example: if the price goes up to, say, 120 then you could re-set the stop order to 110 or whatever you fancy and if the market suddenly goes against you, you will get out with an automated profit. I've done this many times and it's saved me from major losses but allowed me to run my profits without being sat in front of the screen all day!

 

[Cityfan]

Depends on how soon you need the money. In the LONG RUN, markets always go up. In the short term they can be all over the place as we've seen this last 12 months. The FTSE index first opened in 1984 at a level of 1000 and it has gone through all sorts of ups, downs euphoria and panics ever since!

Not completely true . There have been reasonable size stock markets where you lost everything after revolutions such as Russia and China.
It also depends on what you call the LONG RUN The Nikkei in Japan is still well off its peak of 1989 over thirty years ago.
Oh and the FTSE was higher than it is now in 1999

 

[Cityfan]

If I were you I'd go for something different to spread it around a bit. Someone mentioned Baillie Gifford funds on here which seem to be a good bet.

Thinking about it, Vanguard funds are primarily index trackers. I would definitely diversify to some actively managed funds as well. You're relying more on the skill of the fund manager but there's a better chance of doing well when the markets as a whole are doing badly.

Vanguard do active funds as well, one is managed by Baillie Gifford I believe.
The evidence for what it is worth actually points to active funds on average underperforming indices in down markets as well as up, though obviously some actives always beat the index.