Everyday it seems I’m getting queries from clients asking whether they can buy individual shares through the investment accounts that we manage.
These queries are likely to be generated as a result of the sizeable gains seen in some stock prices since last March after the pandemic effects took hold in the UK. No doubt the regular TV and social media advertising of online trading platforms and mobile apps has also added interest.
We all aim to make a positive return on our investments, but the current climate is definitely exhibiting the well-known investing emotions of fear and greed.
In March 2020 when stock prices had fallen generally by around 30% some people were fearful the falls would wipe them out completely and wanted to sell all of their investments.
More recently as prices have recovered others have been greedy for more gains by buying into the rising market.
In our experience neither of these approaches improves your chances of building wealth.
Investing is a long term (many years) activity that allows you to capture the returns generated by the great companies of the world over time . This should be the foundation of building your wealth to achieve your lifestyle goals.
An example of speculating could be where you buy shares in a well-known company because you believe in their products or services and are confident the share price will go up in the short-term allowing you to make a quick profit. You cannot, of course, guarantee a positive return.
I consider a lot of the recent activity to be more like gambling where people are buying shares in companies they’ve never heard off because their mate read a tip on Twitter or Facebook. You might be lucky but like putting money on the horses the punter doesn’t often win.
By all means have a punt for a bit of fun but only if you can afford to lose the money. If you get lucky don’t be greedy but instead use your winnings to start a long-term investment plan.
Stick with it you won’t regret it. Contact us for more info.