Disclaimers And Regulatory Notes


This site is not providing any form of advice and it not encouraging share investing or trading it is a personal view that some people may find interesting. For further clarification on what Advice Is you may wish to read the FCA document that makes it clear that information on this site is not financial advice.
MiFiD (Market In Financial Instruments Directive) - Personal Advice?

There is a specific exclusion in MiFID38 for a recommendation given through a distribution channel (such as a newspaper or other media, including the Internet), where information is, or is likely to become publicly available. By its nature, a recommendation given through these distribution channels will not normally be a personal recommendation.......... The CESR Q&A39 made clear that, in deciding whether a personal recommendation was being given, one criterion was whether it would be reasonable to think that a personal recommendation is being made
RAO (Regulated Activities Order) - Article 53(1) or not?

For advice to be regulated at all, it must relate to a specific investment.

The FCA clarification does not explicitly discuss strategy but it does make the following statement.

Advice to buy shares in the oil sector or shares with exposure to a particular country is generic advice because it does not relate to a specific investment and is not regulated.

Beginners Share Dealing

Picture of me Everybody knows that shares should be held for the medium or long term, you can't go onto a share dealing forum or investment site without being told this.

As a beginner in share dealing it is easy to believe this, but is it true?

It is clearly true that the companies that survive over the medium and long term have share price increases and may have paid dividends.

What the medium and long term hold argument ignores are the losses that occur when you are holding shares in a failing or failed business.

When should you have sold your shares in Yellow Pages, Woolworths, Royal Bank Of Scotland....?
So does buying shares with the intent of holding them for the short term which is the strategy discussed here make sense?

As you read more and more articles it becomes clear that most of the information is sourced from the experience of professional investors using other peoples' money in nominal funds that are intended to last for 50, 100 or more years and will have new money added on a continual basis.

Most private investors will start in their 30s or 40s and will need to stop adding and start withdrawing money from their pot in 15 - 30 years.

Clearly the professional managing a pot of £100 million will have a different view on a share that is undervalued by 30% but can only be bought in chunks of £5,000 per day to a private investor for whom a couple of purchases (£10,000) would be a significant amount.

Beginners Share Dealing, A Strategy

The strategy discussed here is focused on individuals who have roughly £5K to £100K to invest.

If you have a fund of over £100K then you are probably doing it right already and if your fund is much less that £5K, then the amount of money that you will be gaining using these strategies may be too small for the necessary effort.
  • The basic ideas is that you take your investment funds and break them up into pots of around about £5K, the total number of pots being dependent upon the total amount available. There is nothing magical or scientific about the £5K size, it is like a 30mph speed limit, experience says that it is a good starting point.

  • These pots are then used to purchase shares in a range of solid companies,(FTSE 100, 250 or All Shares but not The AIM) trading at around 30%-50% off from their recent peak price but not "falling knives".

  • These pots are then sold when they offer a profit in the range of 5%-15%, meaning that you are selling well below their peak prices and hopefully trading each pot 10 times a year.

  • 10% share price increases are relatively frequent whilst 50% increases are not.

  • Although these profits sound small, taking them means that at the end of the year there has actually been some growth, rather than none whilst waiting for that "big one".

  • Compound growth is key, as each investment is slightly larger than the previous one you only need 18 trades at 4% to double your original pot not 25.

  • The low profit and high trade frequency aims to avoid the much more frequent than you might expect massive share price drops that wipe out the growth from other trades.

  • At some point in time there will be a big stock market drop and you need to be able to accept a few years of no growth whilst the market recovers.

  • Because of this short term holding has to be aimed at building a pot for retirement rather than for income, so it is best suited to those who have a job or another source of regular income.

If you think this sounds too easy, try it and you will find otherwise. The work involved in doing this is not trivial, expect to spend about an hour a day on this.This not a get rich quick strategy based on it once worked by luck, it is a disciplined, almost engineering approach.

This approach is contrary to the traditional view that shares should be bought and held for a number of years as I believe that doing this is very risky for the smaller investor.

The point of going for small profits is that such opportunities are frequent, relatively plentiful and as far as any share dealing can be low risk, these are. Significant growths, those much over 15% are much rarer and generally occur over much longer time frames.

When I started trading I was surprised by the number of apparently safe and stable shares that would drop 20%-40% overnight and then stay at the new lower value for years, it is far more common than you might expect.

Instead I am happy holding shares for a few hours up to about three months, possibly letting it drag on for 6 months although this would be regarded as a failure.

Despite the short term nature this is not gambling and is very different from CFDs (Contracts For Difference), Spread Betting or Day Trading; There is an objective and if that objective is achieved within a few hours, then so be it, sadly but as you might imagine the few hours is much more of a theory than a reality.

Another "everyone knows" is DYOR (Do You Own Research) when deciding which shares to purchase, it is critical to understand that you have NOT done the necessary research because you can't.

Probably the final factor to consider is the management ethos, do you understand the management's motivations and do they match yours? Initially I was staggered by the number of failing companies that had management taking large salaries because "They are worth it." and surviving on new share issues every year.

Now the tough part, when you bought a share you should have decided on when you will sell it, but things are looking good and there is more profit if only you wait a bit longer take the profit or loss.

Spread sheets can be your enemy here the spread sheet says hold on a bit longer and the numbers will look great, the spread sheet still says that as the share price drops back down and your pot is no bigger.

Finally don't get depressed by the missed opportunities. I've watched Dixons shares rise and the business merge with Carphone Warehouse but it could have been Comet who won out and Dixons who went under.
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Current Market Suitability
Stop Icon Retreating into cash just before the EU/EEC referendum seemed prudent, but what now?

We have a long period or negotiation and can you afford to be out of the market for 2 or three years?

Beyond the sound bites I am completely confused by what the post Brexit market will look like, so there is a real risk of investing in areas which may be important to the business within them but not critical if they block the whole exit treaty.


Current Holdings
I would like to display my current holdings but at the moment opinion seems to be that this may be deemed advice and covered by Article 53 of the Regulated Activities Order.


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