The profit so far:
I have now been trading for about 5 months and at the time of writing, I have made £450 as a profit or return on my investment. And this amount does not include the dividends that I have or will receive as owing the shares of various companies. This may not seem the best or huge return on investment of £4000, but so far the investment has yielded a return rate of around 25% which I think is quite a good number when compared to the interest the amount could have had had it was kept in a bank account.
When did I start?
I started in October 2020 with an initial deposit of £800 but as the profit started to build up, I increased the total amount to £4000. This is the amount I would ever going to invest and if it all goes bottom-up, then this is the total amount that I am going to lose.
Which shares, FX, or CFD do I buy or invest in?
I don’t do CFD or Foreign Exchange (FX) as I don’t understand them or find it too volatile for my liking. When it comes to shares, I only invest in FTSE100 or 250 or SNP 100. These stocks can often make you wait for weeks to see any return on them, but they are also less volatile and less unlikely to vanish your money altogether.
Which stocks do I invest in?
I normally go for stocks of companies that have had good quarterly, half-yearly or annual results, pay dividends and are part of FTSE 350. Just to make sure that the money I am investing in has a good chance of protection. Currently, I hold all four big UK banks as they all have had their annual results for 2020 in and they all had profit, albeit less than the previous year, and have resumed dividends. Miners such as Fresnillo, Glencore, and Ferrexpo are some of the stocks that have given me profit and dividends. And I have also bought and sold stocks of Amazon, Google, and Tesla, etc. Just for the same reason that they have more chances of not going out of business overnight or have more strength of withstanding a financial blow.
When do I sell the stock?
I never wait for or expect a big return on my investment. Sometimes I sell my stock even if the profit is in pennies. There are two reasons for it, 1, a tiny profit is better than a loss, and, 2, it protects my initial investment. Moreover, even a profit in pennies is a good return if you can generate it more often. A profit of 79p on investment of £67 over a 3 day period means that the return is 0.39% a day or 143% over a year. And it also frees up the money so I can reinvest it.
Not paying a commission does help.
Thankfully more and more free trading apps are coming up into the market and one does not have to pay a fee every time he sells or buys stocks. Currently the cheapest fee-paying share dealing account in the UK charges you about £6 a go. Even as a beginner if I bought and sold 10 times a month, that is £60 that I was never going to see. However, trading without a fee does help to make a profit or at least mitigate losses. I have been using Trading 212 for a few months now and if I was using any fee paying service, I don’t think I would have made any profit.