Advice on Buying Shares Please

[cookie334]

Following on from Jonjo's post about share prices. I've been keeping my eye on these for a while. As I posted before I'm opening a Childs trust fund for DD with selftrade and was hoping to buy DLP shares with it, however I need to wait for the voucher to be credited to her account before I can purchase the shares. I sent it off yesterday, but am in 2 minds what to do.

Do you think I should just hold off and see what price they're at when the money is there to be spent on the shares? I was thinking they may come down a bit more as they have been falling every day. BUT obviously I don't want to miss out on such a cheap price - they've already almost halved in price since i first started watching them - so I'm now thinking I should just buy them and put DD's money into shares in something else (although is anything safe at the minute?).

What do you all think? What should I do? Buy now or wait and buy them for DD? Or both?

 

[tennisfan]

I take it your DD tax credit is going into a share investment account? If it isn't then I don't think it can be spent/used until she is 18.

Personally I wouldn't use the credit to invest in shares at the moment as the stock markets are taking a hammering everyday. I have shares in Sainsburys as I work for them, the have lost over £1 per share in less then 5 days & I can't see it getting better for a while.

Disney shares should never be purchased as an investment as they currently don't pay a dividend & it will be years if ever that they climb to a high value.

I would just buy the shares for the benefits if you join the shareholders club. Also you need to check to see if you can be a mamber of the shareholders club under the age of 18.

 

[cookie334]

Yes it was going to be investment in shares.

I'm glad you posted, I really don't know much about shares and things and had assumed that DLP would be a good investment as I didn't think they would go down or if they did, I didn't think they'd stay down for very long - bearing in mind my DD will have them for 18 years so it is the long term that I'm looking at, but you've made me re-think, I didn't realise that DLP shares don't pay dividends.

I think I'll just buy them myself then and think what do to with the CTF later. Thanks a lot.

 

[ukstitch]

Yes it was going to be investment in shares.

I'm glad you posted, I really don't know much about shares and things and had assumed that DLP would be a good investment as I didn't think they would go down or if they did, I didn't think they'd stay down for very long - bearing in mind my DD will have them for 18 years so it is the long term that I'm looking at, but you've made me re-think, I didn't realise that DLP shares don't pay dividends.

I think I'll just buy them myself then and think what do to with the CTF later. Thanks a lot.

I don't know a great deal about shares, but I have noticed the following about the DLP ones:

They've done very poorly since they started back in 92... over the past 5 years, they've fallen from about 60 euros per share to what they're at now.

They had stabilised a bit recently, but the global economy and stock market problems are causing them to fall again.

If memory serves me rightly, they went so low based against the original 1992 price that they had to consolidate (I think that's the term) the shares to get them back to a certain price (they basically bought everybody's shares and gave them back 100x less than they bought, but each share was worth 100x more than the old ones - something like that anyway).

It's hard to tell over such a long time as 18 years, but if the last 19 are anything to go by (DLRP shares started back in 1989), then I would steer well clear in terms of investing in them.

 

[tennisfan]

No one really knows what is going to happen with the Disney shares. I mean they may one day pay a dividend but they will never happen until all the debts are paid off which they seem to be doing well by making increasing profits each year since the debt restructuring they went through.

I have shares in Disney but I purchsed them solely to use the benefits from the shareholders club. I have owned them since 1999 & have got 4 free tickets to the Studios preview before it opened, tickets to the SM2 relaunch, tickets to Buzz Lightyear Laser Blast preview, Crushes Coaster preview & a few others which I didn't use as I couldn't have gone. This is on top of my numerous discounts from meals, merchandise & trips

 

[torsie24]

I dont know whether to buy 5 or 20...

 

[tennisfan]

If you have the money now, whilst they are cheap I would buy the 20 then you can waiver the club fee every 2 years.

I'm tempted to buy the 10 i need to take me to 20 even though I have only renewed my club membership this year. I will have to see how much they will cost me as I have my with Caceis.

 

[ukstitch]

I dont know whether to buy 5 or 20...

As the price continues to fall, the 20 option is becoming more and more sensible...

If you do them through selftrade, then the current situation on 5 vs 20 is:

5 shares to "start up" is:

4.69 * 5 = 23.45 (share price)
15.87 (£12.50 purchase fee for selftrade)
30 (2 yearly admin fee for the shareholders club)
total = 69.32 euros

20 shares to "start up" is:

4.69 * 20 = 93.80 (share price)
15.87 (£12.50 purchase fee for selftrade)
total = 109.67

Bear in mind that with the 5 share option, you have to keep paying 30 euros every 2 years, where as with 20, you don't. So, over time, your spending will be:

0 years: 69.32 / 109.67
2 years: 99.32 / 109.67
4 years: 129.32 / 109.67

So - long story short: if you intend to hold onto your shares for more than 4 years, then you are better off buying 20 shares. The fall in share prices has done wonders here, because not so long ago, you had to keep your shares for about 8 - 10 years before buying 20 became the better option.

 

[Cyrano]

When I first purchased shares the broker couldn't stop laughing. Kept saying that this was not a good investment.
Eventually I got him to understand that it was the benefits of the shareholder club that I wanted.

I agree with Rob Worth having the full allocation so that you can waive the shareholder club membership fee. At today's prices would be rude not to

 

[aobh]

i've been on the self trade website but i'm not sure which account i should open - is a dealing account what I should look for??