RE: Newbie10 Sep 2022 13:00
With only a small amount of capital to lay down, your best allies are time and patience.
I would argue that with enough time allowed, even the smallest of investments will yield you a profit eventually. Be prepared to wait a year or five once you invest this money for it to yield anything like a useful return, but be confident that it will eventually do so, barring your chosen company failing or somesuch other uncontrollable circumstance.
My advice to you would be to do two things before you jump in though -
- go to tradingview . com and get yourself set up with a free account and start yourself a watchlist of shares that you are interested in. Pick out some companies you like the look & sound of and just watch their charts on the 4 hour and 1 day timeframes for a month. This will show you how that company's price is ebbing and flowing over a decent timeframe and give you some idea what kind of price you might want to look to enter at.
- Look up the concept of "resistance trading" and apply it's principles to the charts you are following. Draw some lines on your charts and see how those principles play out over your time watching the shares you are interested in. This will give you a clearer idea of where and when might be an appropriate time for you to make your purchase.
Also, consider that while they are somewhat "boring", shares that offer a dividend mean you will always get SOME return even if the share price doesn't do fantastic things in the short term.
Finally, never sell at a loss. No matter how long you have to wait. As long as the company you buy doesn't go bust and you learn from those two activities above, it is far more likely that you will make some return or at worst break even. You will mess up the timing. Don't sweat it.
I've been investing for about three years now and have made some stinker purchases that flopped hard and kept me locked in for in for over a year, but every single one of them either broke even or made a return eventually, a couple of them taking over 18 months to do so. Remember that while your investment is in the red, if you buy more, even very small amounts, you can reduce your overall break even price significantly. Don't over-trade either. Fees eat profit. One purchase/sale a month is plenty.
For reference, I started out with RBD shares around this time last year with £1k which I used to buy in a couple of chunks, starting at around 0.26p. By December last year the price had arsed it down to 0.1p and I thought that was that and tough luck.
I now have ~120k shares here that cost me nothing and can be left to free ride forever, my original capital back and around £650 in cash profit to play with.
I was well in the red for a significant amount of that year period though and nearly bailed a few times.
Take your time. Be patient. Use resistance trading principles to choose when to buy and sell. Don't sell till you win.
Have fun!
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