One No-Brainer Stock To Buy Today Nov 08

I hope your right Brucey, I bought into an FTSE all share tracker last week! keep telling me it was the right thing to do please!! I did that as it felt really hard to do.

What was it Buffett is famous for saying? It's better to be a little right than totally wrong or something?

Good luck!

Hmmm... Price 1758 dividend, 1.60USD exchange rate 1.58 GBP=1USD, (1.60/1.58 )/ 17.58 = 5.75% six ish.

p\e as a percentage ? RDSA is between five and six, so I guess that's about where RDSB is.

So what happened to these great intellectual property companies ?

Anyways, would it have been helpful for the potential investor to tell them why Shell is a sound company nstead of opining that there isn't too much risk from volatility. Try: reserves are less than expected, the dividend is cut, the price falls so far that the company is bought for a song.

>It could even be in recession in 2010. Right now, >the length and depth of the recession is >impossible to predict for any economist, let >alone a mere mortal such as myself.

Pshaw! Three years, seven months, five days, sixteen hours, nine minutes and forty six seconds. I think you'll find that answer to be very precise.

>Base interest rates are down to 3%, and are >predicted to fall even further. Some pundits are >suggesting interest rates could get close to zero >– they are effectively at that point already in >the US. For the safety of having your money in >cash, your medium-term return should be around >3.5%, the equivalent of the 5-year government >bond yield.

Of course if you'd bought Consols while the interest rate was 'high' at six percent you'd be laughing. Had you followed Ben Graham's advice and kept a balance between bonds and equities, you'd have done really well by selling of at the low yielding equity peak and buying low priced gilts. they'll be redeeming war stock at this rate !

Safer than buying the shares.

It's the old risk/reward ratio MarieTeresa - the higher the reward, the higher the risk and 7% is way over the odds at the moment.

Every equity share can go up or down and there is NO GUARANTEED winner. Anybody who thinks there is, is heading for trouble.

I thought last week's advice was to avoid insurance company shares?

Reply to NucktheKing:

Does Mrs Nuck know that you refer to her as your "current" wife???

Not so long ago (almost) everyone was pointing out how oil is running out, the word was that RDS was in a bad way because they didn't have access to reserves (oil), there was also a minor scandal about the valuation of the resources in their books. (didn't someone loose their job over it?) And now it's supposedly a future-proof company? Based on what? Their currentfinancial situation and the "pundits'" expectations?
As far as I can see, pundits are people who hype a financial product they have bought in order to get the public to buy it from them so they can make a profit. Only weeks ago the pundits were predicting the oil prize to go over $200, and the gold prize to go over $1000. And I couldn't see or hear anyone saying any different.
Another thing: there are so many people trying to call the bottom of this cycle, and keen to buy, that it makes it possibly the opposite of anti cyclical behaviour?
Personally, I shall remain cautious. May be regularly drip feeds of small amounts into a tracker, or a basket of companies. but I will try to assess how well those companies could do in a recession and possible further financial upheavals.

TooFool; if it's good enough for Terry Wogan it's good enough for me....

Shuggy; I see your point; long term, I hope that I can "time" selling the shares when they have made some money (which might be in 10 years' time); but if I can guard against inflation short-term, and then make the most of a later Stock Exchange recovery, then I might win on both counts.

I might have got this all wrong, but doesn't your theory assume that I buy AND sell at the same time: this isn't my intention.

Have I got this right?

Nuck.

Hundreds Of Other Cheap Stocks
For every Shell, there are literally hundreds of other cheap companies. I counted 50 companies in the FTSE 100 alone trading on forward P/E ratios of less than 10, the equivalent of a 10% earnings yield. Many of them also trade on dividend yields above 5%.

OK NAME THEM kbrowney@o2.co.uk

I suspect that when companies are announcing results, earnings will be much less than expected, thus changing the p/e ratio. I wouldn't be surprised to see lots of companies cutting dividends as well.

I have £8k M&S shares which have lost almost 10% since June. Should I go or should I stay?

I have also started buying back into the market - buying large quality companies and/or the tracker seems a sensible approach to me.

I'm taking a steady and cautious approach over the coming months and years to even out the ups and downs.

I have a maturing bond with London Scotish bank. They are offering me over 7% to renew it. I see their share price is now about 3p. Is it safe to take out the bond?

Maybe that's the reason to buy shares..

Over the last few years, by putting all of our children's Child Benefit into a savings account, rather than into our account, we have managed to build up around £4500 in the Halifax.

1 month ago, I took out £1250 and put it into Fidelity's Index Tracker ISA. I also took out £1250 and put it into the National Savings Index-Linked saving bond; this pays +1% over inflation if you keep it in for the full 3 years.

And I've kept the rest in the Halifax for instant access emergencies.

This morning, the ISA was worth £1,374.91; and over the last few weeks, it has only twice dipped below its original value.

I still think that, long term, the Stock Market is undervalued; but I'm not sure that with the small amounts of cash that I have, that I would be prepared to take a punt on one individual company...even if it did seem like a sure-fire winner. I prefer to spread the risk (and yes, the potential gain) over the whole FTSE 100.

So far, it seems to have been the right idea; we shall wait and see over the next few years...

Perhaps I shoud give up the teaching game and become a professional investor; but I think the current Mrs Nuck would worry too much...!

Why would anyone with bills to pay buy shares at the moment? 2009 isnt going to see one single quarter of growth and job losses are looming. Surely a better bet would be sticking the cash however much or little into the Co-Op or Britannia or somewhere else nice and safe. Now isnt the time for greed or taking advantage (please dont trot out Buffet's quote, its always been alright for him, he made his first million very early and hes lived in the same modest house for 45 years), its the time to consolidate and see out the next 5 quarters with mortgages intact.

Bruce - I wouldn't bet that "the financial crisis is over"
I have a gut feeling that many banks, insurance companies and other financial institutions haven't yet 'fessed up to the real value of the toxic debts they still have on their balance sheets.

Nucktheking, inflation will fall over the cliff and maybe we will have deflation, so not good for index link gilts, one good decision and one bad, but on balance, good diversification, if markets retreat further, as IL gilts will be a safe haven. So your returns will be cancelled out by the other, and this is what is called negative correlation.

The old rules hold good - don't invest money in shares that you can't afford to lose - or might need in a hurry. I'm going to put 10-15K of spare cash into equities with a 5-10 year view. let's face it if the market doesn't recover by then we will probably be all stuffed anyway.

To me, it makes no sense to invest in individual companies when one can invest in tracker funds.

First rule of investing = don't lose money.

In a tracker its impossible to lose all your money, in fact its almost impossible in all but most severe bear markets to lose more than around 50% of your money. If you do, stay invested and it will recover anyway.

Not so if one invests in individual companies.

Its the gambler's instinct in all of us to try and be clever and outperform the market by betting on single shares, but its just not worth it. I've had this re-affirmed over the years (e.g by buying HBOS as one example)

The sooner we all realise this fact the better off as investors we'll all be. Also and sigificantly with trackers, due to automatic re-investing, we can benefit from compounding up dividends (a massive investing tool)

Perfect time to be putting money into trackers now in my view. Happy tracking.

I make it 46, a couple of those are n\a so probably not accurate.

Friends Provident, Royal Bank of Scotland Group, HBOS, Kazakhmys, 3i Group, British Airways, Barclays, Old Mutual, Xstrata, Lloyds TSB Group, Vedanta Resources, Thomas Cook Group, Antofagasta,
Man Group, Eurasian Natural Resources, BT Group, Royal Dutch Shell 'A', Anglo American, Lonmin, BHP Billiton, Marks & Spencer Group, Wolseley, Schroders, Drax Group, HSBC Holdings, Next, Standard Chartered, Carnival, Legal & General Group, Rio Tinto, BP, WPP Group, RSA Insurance Group, Schroders, Invensys, London Stock Exchange Group, Experian Group, Rolls-Royce Group, John Wood Group, Stagecoach Group, Vodafone Group, Johnson Matthey, Fresnillo, ICAP, International Power, SABMiller, Prudential, Kingfisher

Of course the p\e is expected to be different for different sectors. Oilies and miners aren't usually all that high, utilities may be higher because of perceived stability.

Buy on the rumour, sell on the news ?

HoxtonBoy is right.

The problem though is in deciding whether you might need the cash you propose to invest within the period you must tie it up.

I agree the timeframe is going to be 5 years +. Those investors who are brave now and get their choices right will make a lot of dosh.