My Family And Other Investophobes

So what does your Dad's pension fund put its cash into? Bonds, commercial properties and commodities presumably, if shares are a no no?

I'm in the same boat as well and I had the same kind of 'throwing your money away' comments from my family too!. I remember my first buy last year, checking the share price several times a day afterwards and worrying if I'd done the right thing?. I bet every newbie investor goes though the same!.

I never liked Halfords. Any Halford store i see has a deserted car park and they sell overpriced products

Well done Chris,It's very hard to break a family habit but the real travesty is that if you take no risk at all you end up with negative returns.
If you use pound cost averaging it will smooth your returns and if the market collapses fill your boots with good quality stuff.

It's not logically possible for it to be the same as throwing money away, the money is at risk and you may make more money or lose money but the final result of such action is only known to you on the day you sell some point in the future.

In a way a lottery ticket is not money to waste until the result, however with the lottery the odds are so stacked against any return that it is as good as dead money, with investments you have to ask yourself if the odds are in your favour, if they are not then just like lottery tickets and horse racing.

So sometimes it is legitimate to say, like for instance if you buy a speculative oil and gas explorer...i'm afraid that is dead money unless they hit oil or gas and can make money from it...not all stocks are equal some are as safe as your bank account and some are as dangerous as blackjack and roulette, knowing which is which is the important part.

I like Halfords as a good punt for both capital growth and yield. In fact, even if the current yield was halved it would still be a reasonable income share.

But beyond that it is indeed in a difficult place just like the rest of the high street. But it has a near monopoly for consumer car care and bikes in much of the country, it is a market that supermarkets look to be unable to match (particularly as they look to expand via smaller stores), so the 'mothercare effect' is unlikely.

Lastly, now having a near bike monopoly it will benefit from a likely olympics effect in the summer, particularly as it now has the Boardman link up to flog fast bikes cheap (although how anyone manages to ride a racer on UK potholed roads these days is beyond me).

Chris, out of interest, why did you choose to start by buying individual shares, not spread the risk by regular investing in low-cost index trackers?

Novices to investing in shares have a lot of learning to do. The best lessons are learnt from mistakes, which no one likes to make. The novices who become experts the quickest are those who can learn from experienced investors, and your dilligence in reading Motley Fool articles and company reports is to be credited.

However, here is advice I would give to any new investor. Before making your first selection, it is important to assess how much you have to invest in total and decide on a balanced portfolio in which to invest. Due to dealing costs I would not recommend anyone buy shares for less than £1,000 as an initial investment. The portfolio should be balanced across different sectors and sizes - the less risk averse you are, so the greater proportion of large caps whould be in your portfolio. My personal "ideal" portfolio for instance would contain 15-20% Large Caps, 5-10% small caps, 10-15% managed funds & 60-70% mid caps. When markets are growing well I may move the balance to small & mid caps, when markets are suppressed as now I move more to large caps. If you can only afford one share I would strongly recommend you do not buy a single company share (as you have) but go for a fund which itself spreads the investment across a number of companies. Research for what funds are available, and their pros & cons can be done efficiently with Trustnet or Morningstar.

As for Halfords - I like the business, and have shares in it, but would not have started with them. It is gratifying that you have not been influenced by promises of high growth, but seen the importance of dividends. Why I don't like Halfords (for a one off investment) is that it is operating in a single market: the UK, which is depressed, and likely to be so for 6-12 months minimum. Halfords business to a large extent depends on the discretionary spend of the public; and that does not look like the best customers to have right now. I would feel much happier if you had chosen a company with a wider geographical spread to their business, and offered some more immediate hope of significant growth. Unilever, Glaxo, Reckitts, Diageo, Rolls Royce come to mind. Having said that if you have bought in the last few days I think you have got into Halfords at a good price, and the downside is protected by the dividend (assuming they maintain their dividend, which they are certainly likely to do this year - next year may be a different story.)