UPDATED: Stock, Equity and Shares how do you choose them?! :o

So you have learned about stocks in my previous blog. But how do you choose them?! This part of the blog will look into a very basic of how to make your decision on shares.

I have to warn you, it takes years to master stock picking if you expect extraordinary returns. However, a basic understanding will let you create a portfolio with a reasonable return, and this part of the blog will be a starting point.

Everyone whats to find out whether the stock will go up or down. Guess what, there is no easy answer to this question because everyone would be rich then. Although it is prudent to start with fundamentals. The idea is to try to decide what is a good price to pay for a stock-based on underlining company and not just some speculation.

So let’s begin. There are thousands of stocks traded on international exchanges and around 3K in London. Most of them will not be a suitable investment for you due to various reasons. One could be due to significant transaction costs buying from international exchanges, or the company may have a lot of debt, and when times go bad, it will go broke. It could be simple as stocks became too popular and overvalued.

Based on your needs, risk and expectation you will need to choose between growth stocks or dull-but-worthy and often safer income shares. The difference between the two broadly are as follows:

Continue reading →

From Zero to Professional Investment (IPS)!

This part of the blog is to help you to stick with your goals and help to create a customised portfolio for you.

When you come first time to wealth adviser Investment Policy Statement (IPS) needs to be prepared. To finds out more information about you and help adviser to provide products that are most suitable for your current needs. The statement is usually reviewed yearly or if your financial situation changes. So we will create one for you…

The primary goal is for you to be decisive and stick to your goals. However, also we will determine what reasonable goals are. Create IPS, and you will remove most of the stress from the investment. The result will be a gift you will make to yourself when you start investing. You will not need concern yourself with market volatility. We will try to get you to a position where your money is working for you within given boundaries, which we will create.

True, it will take some time at first. However, you do it once and later you will need just updating it. You can download a simple copy of IPS here (IPS).

At end I have also attached document form The Great Life Assurance Company. It is quite good summary document for our dicsussion and can be used for your decsion making.

____________________________________________________________________________________________

What will be considering in IPS?!?

Objectives:

  • Return
  • Risk

Constrains:

  • Time
  • Liquidity
  • Tax
  • Legal
  • Unique circumstances

Additional information:

  • Target Asset Allocation
  • Diversification
  • Financial Goals
  • Any additional information which is relevant to investment decision making. Like, where you would like to invest.

Now we will go into more detail on each element to help you to learn more about yourself and potential investment portfolio, which you can construct.

____________________________________________________________________________________________

Return: Continue reading →