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Stocks & Shares - Bulls and Bears - What the hell are they? Why it sounds so ridiculous for the man (or woman) on the street to entertain such thoughts - or not! British Web Shop - I shop here because I'm always sure of picking up a bargain. And let's face it - living on £4000 for a full year means I NEED BARGAINS Shona Prophett - My website, this one, has been set up by NYK Media as part of their Scottish web project. If you would like to set up your own website, have a quick look at DOMAIN NAMES The average house -hold could save up to £325 off their energy bills if they changed supplier. Click here to find out how much you could save. Uswitch - Click here to compare prices on UK telephone suppliers and save up to £140 on your phone bill. Tesco is currently ranking #1 in my book for groceries & general household bargains! |
THE MONEY ZOO FAIRYTALE (It's all about the money, It's The Big Bad Bunny) TIP - Leave the stock market well alone until you have cleared all your debts and have some secure savings as back-up. (I suggest an ISA and perhaps a few Premium Bonds) Stock Market, FTSE 100, London Stock Exchange, NASDAQ, portfolios and bonds, stocks and shares, bulls and bears... the list is endless and all made up of stuff about which ordinary people like us have no idea. Nor, on the most part, do many of us care to find out, let alone learn and understand. It irks me, somewhat, to catch fragmented conversations about ne'er do wells versus those born with a silver spoon well and truly wedged between their aristocratic jaws. But what, exactly, makes one person capable of achieving greater things, whilst another is less fortunate and destined to a life of drudgery, a life of 'just making ends meet'? If I could answer that question, I reckon it would pay me handsomely and lead me to my fortune. Is life all about money? Money has lead to such atrocities. Money is the root of all evil. Money cannot buy happiness. Or so they say... The secrets of how to attain wealth have been hidden within the depths of fairytales. BULLS & BEARS BULLS - What's all this nonsense about bulls and bears? Is it rhyming slang for stocks and shares, or is that just a coincidence? A bull market... I can only think of Perth Bull Sales and see huge beasts lumbering around in circles with a bunch of speculators eyeing them critically, some with a gleam of hope and others with a gaze of longing. Could this be half the secret to the bulls and the bears? Bulls relate to those shares one buys that look good, perform well and make you a fortune IF they perform as well as you expect? I'm not convinced! But mainly because elsewhere in my brain there's a bull in a china shop wreaking havoc on precious commodities that have been so carefully chosen and strategically positioned to gain maximum exposure. What the hell is a bull market? My easiest method of remembering is the former - Perth Bull Sales. There are always more hopeful buyers than there are really good bulls, so a bull market is simply that - more buyers than sellers resulting in an increase in the price of what's being sold ie The Bull. Of course, this may well all be bull! BEARS - Like the bulls, I haven't a clue about bears, so dream up another conundrum. Instantly springing to mind is the hibernating bear, plumped up, fed up and maxed out on fish before hibernating, returning after months of sleep a shadow of its former self. If it survives, it continues to grow and flourish until the same thing happens the following year. Bears hibernate because they cannot sustain their own existances throughout the year, so they preserve their energies and recharge a few months later. They may sleep deeply and for prolonged periods but they do re-emerge and regain their former strength, even more so in a good year. So, does this story metaphrically relate to the bears within the stock market? NO! Apparently, it's a slang term for falling prices over the long term with the belief that they are going down, as in potentially out. Strange though, I would always expect my bears to come out of hibernation, not just curl up and wilt away to nothing. The final icing on the cake of this fairytale is that falling share prices can rally. I'm assuming that bears can be thought of as shares with prolonged falling prices. Nobody wants to buy a sleeping bear or, as the saying goes, let sleeping bears lie. Well, if those bears begin to rally round, they can regain some strength and if they continue to rally round for any prolonged period of time (known as a sustained rally) they could actually turn into bulls! Wouldn't that be a sight to see! That brings me right back to the hibernating bears of the wilds. When they say to let sleeping bears lie, do they mean 'lie' or do they mean, 'lie'? If you go down to the woods today, you're sure of a big surprise! STARTING YOUR PORTFOLIO What's a portfolio? It's like a file where you keep notes about the things you buy and things you sell and, hopefully, a list of things that are worth more than they originally cost. [I've set one up during this challenge at a cost, so far, of £1,333.00 The details are included in the messageboard updates and in the February entries of my online diary.] It's easiest if you use two files, each of a different colour, that way you can grab the right one without too much difficulty. I bought a pink one and a blue one - pink makes me happy (in the pink), which I am when I look at what I can call my own - bought and paid for, no debt involved, there for the selling if things get tight. Blue is for what has gone (feeling blue) by way of old deals and for my 'I want' notes. For most of us, the blue folder will always outweigh the pink but to even succeed in owning a pink folder is, in my book, a reason to be cheerful. RESEARCHING YOUR MARKETS This part is all down to what you can afford and how comfortable you are about having your money tied up in it for any length of time. By all means research, but don't go spending time and money on products that you simply cannot afford to put into your pink folder. Like you basic finances, you need to prioritise and build slowly. Nobody ever builds their castle from the turrets and roof downwards, they dig deep enough and then lay their foundations, the cornerstones of their future. Stocks and shares can be immense fun but lay a careful safety net before jumping out of the security zone. By all means, fill up your blue folder with wishes and wants, but leave the first pages of the pink one for secure dealings that WILL hold your money without fear of loss. YOUR MARKET RESEARCH We, the ordinary people, have the capacity to change the financial world at any moment in time. We, the consumers, are the ones who spend our hard-earned cash on what we need and, if finaces permit, on what we want. So, it is only fair to say that 'they' earn vast fortunes out of profitting from us. That's my theory and I'm sticking to it. Harking back to cigarettes and tobacco products, WE keep buying them regardless of their being a want, as opposed to a need. It is just as fair to say that the tobacco companies profiteer from even the poorest of our native population. How often have you seen a beggar smoking? How often have you seen a beggar with alcohol? How often have you seen a 'poor, homeless guy' with a dog in tow? How often have you been asked by an apparently homeless guy for money 'for a cup of tea'? My view is that tobacco, alcohol, pet food and tea are all safe bets when viewed as commodities on the stock market. So too are staple foods like rice and pasta. Unfortunately, they (the city bigwigs) are fully aware of these basics and are well ahead of the game, pricing most of us base level traders well and truly out of the market. And if you are thinking Uncle Bens, Dolmio, Pedigree or Whiskas, think again, because they are all part of Mars Inc. That's right, the Mars Bars people. And you CANNOT buy shares in what is probably one of the largest 'family' businesses in the world because it is still just that - a private company. OK, what about money? We all need money to survive in our capitalist societies, even the homeless. Let's invest in the financial markets. Again, we find that traders wearing 'L' plates are priced out of the market. We simply don't have the amount of money available that it takes to spend 'big cash' on investing in cash generating institutions like banks. One handy tip that I have found useful, however, is that when you see big name banks holding millions of pounds of other stocks, it isn't always because those companies are holding off debts. That is YOUR money the banks are spending and if it's a safe enough bet for them, then surely it should be a safe enough bet for us small-timers. Basic utilities! Oil, gas, electricity or even telecommunications, these are all becoming par for the course of life. Basic medical treatments, like pharmaceuticals, sound a good sound investment, afterall, we almost all have drugs of one form or another in our cupboards, even if it is only a pack of Aspirin. Researching doesn't take long to discover that these, too, are fetching hefty chunks of wealth to warrant 'playing' with them as part of a miniscule portfolio. No, not for us beginners are the likes of the true sustainers of life, instead we must scale the heights of society and climb the ladder of needs as it ascends to the level of wants. Try it for yourself. Draw a pyramid on a piece of paper, line it off horizontally and start from the bottom, inserting into each layer items of basic human need. You'll soon discover that the hard and fast rule of earning money on the stockmarket as a cautious beginner is thwarted at every turn by share costs and we need to search further afield, scaling our pyramid. As we ascend the steps of needs and approach the wants, we can see a steady decline in share prices. The trick is to fathom out what 'wants' will soon be perceived as 'needs'. Like computers. They began life as expensive working 'toys' for those with the financial wherewithall to afford them. But the computing trend grew out of all recognition, blazing a trail into everyones homes in one shape or another, until now you will be hard-pushed to find anyone who functions without coming into contact with a computer or microchip of one description or another. In my opinion, working your money is all about timing. And the timer cannot be started until someone blows the whistle and gives us a clue as to what's coming next. Politics may be boring to many but political debates can release hidden treasures for small investors who have the time to research and the patience to see their investments through to fruition. Over the past few years, arguments have sprung up across the political spectrum about national security and the use of microchip technology in counteracting crime. ID fraud is running at an all-time high, computer hacking has been carried out to the highest levels by schoolkids! Credit Card fraud is apparently rife. I must add that human carelessness should not be overlooked, but often is, in this respect. But that's why I think any sort of development in ID technology must be a pretty safe bet. And the current Government's fixation on gambling is another clue to what's in store for our future and that of our kids. Shopping and how we shop: Using yourself as your prime example, try keeping a note of EVERYTHING you buy. Any supermarket using loyalty cards can do it for millions, so there is absolutely no reason why we cannot do it for ourselves. I do. Admittedly, this is easier to figure out if there are a few of you to compare notes, but the basic staples of most grocery budgets have to be bread and dairy products. No matter what happens to your weekly or monthly income, you can be guaranteed that a percentage of it will go on these products. Check it out! Look at your top priorities within your own spending and compare the regularity of purchasing bread, dairy products, tea, coffee, sugar, cereal based products and chemicals (toiletries, detergents, even cosmetics. And that's not to mention the paper products. The not-so-amazing revelation is that the suppliers of many of these products have combined and we see massive conglomerates such as Proctor & Gamble, Nestle, Danone etc cornering the markets. Their shares, of course, out of reach of the small investor. So we find ourselves turning to the providers of these products, the supermarkets. Even here the share prices are prohibitive to most but as more and more stores merge and diversify, we need only look to the products they offer in addition to the staple foodstuffs and we see where the smart money is heading. The Tesco versus Sainsbury competition is really hotting up and, with Royal Bank of Scotland dropping millions of pounds into Sainsbury bank shares recently, it looks like things may be hotting up even further. HOW CAN WE GET IN ON THE ACTION? How easy it would be to sit home in a comfortable chair, tapping at a computer keyboard, hours to suit yourself AND with the potential to earn a phenomenal amount of money... if only we knew how! Well, bulls and bears aside, I ask the question, 'how hard can it be?' Surely there must be a simple way of calculating what to buy, for how much, and when. There must be clues to alert us of when to hold our stockmarket cards, and when to fold them, and when to walk away. My belief is that if this is what you would like to do, even as a hobby (let's face it, you don't need to be a millionaire to start), then get in at whatever level you can comfortably afford and play the game. So what if you have to start so far up that list of needs that you enter the 'wants' territory, those wants can fall fast and fall into the affording laps of the masses at any time. High street retailers - pretty obvious that their share prices should escalate with the Christmas spending, but don't wait too long to get out again. I'd suggest selling before you reckon their distribution bill arrives as the logistics of getting so much stock out can bite hard into profits if the delivery chain breaks. Companies such as Woolworths can be worth looking at if you are content to make 10-20% rather than wait a year for 5% from the banks. Continued on next page Copyright Shona Prophett Shona Prophett writes for pleasure, entertainment value and payment only. Nothing within her writing should be taken as financial advice and she removes herself from any responsibility whatsoever for anything. This is NOT financial advice, it is simple reading material. |
Cyberdosh, to whom I am grateful, is sponsoring this year long financial experiment to the tune of £4000.00 Click here for info. Don't be a wimp - Because if I can do it, then anyone can! Follow my progress HERE MY FAVE LINKS
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