Sexy, sexy, sexy (and it might make you rich) (halifax.co.uk)

Member Name: opinions4u

Product:	halifax.co.uk
Date:	17/02/03 (198 review reads)
Rating:

Advantages: Low charges, Fast online service that could make you rich, Market Information

Disadvantages: Closed 10pm-8am, You can lose money, 24 hour dealy on transferring money

Now, most of us know what has happened to the stock market over the last few years. The FTSE has dropped over 40% from its peak, life assurance companies are failing to pay out promised returns on endowments and pensions and people are running a mile from investing their money anywhere that has a perceived risk.

This probably means that NOW is the time to start ploughing your money in. Last time war started against Iraq, the stock market rose. Last time markets dropped by over a third, they bounced back strongly with sustained growth over many years. Investing in peoples' business acumen has a proven track record of giving higher long term returns that sticking your money in the post office.

While there are no guarantees, investing in stocks and shares can make you wealthy and be bloody good fun along the way. In my case, I throw £20 a month in savings, £100 a quarter in expenses and earning from yougov.co.uk, ciao and dooyoo in to stocks and shares, along with any overtime I can occasionally call on!

This is not a lot of money to invest. It all comes from little extra bits of money that I would not normally have. In other words, I have nothing to lose and don't miss the money.

This is where the Halifax Sharedealing service comes in. A low cost, online way to buy and sell shares which works brilliantly for me and allows me to keep track of how well, or badly, my shares are doing in real time.


OPENING AN ACCOUNT

Well, if you are already a Halifax online customer, go to Halifax-online.co.uk and register for sharebuying. If you are a non-customer, go to the same site. The registration process is the same, but you will have to wait for an access code to be sent before using the service.


FUNDING YOUR SHAREBUYING:

You can set up a regular direct debit, a one-off funding arrangement, use of your credit limit, a switch/delta payment to pay for share purchase. It is simple.
The only frustrating thing for me is th
at one off transfers from Halifax accounts are not instant and usually take 24 hours. Additionally, they cannot be collected from the excellent WebSaver account that currently pays over 4% interest.


BUYING SHARES

When you are accepted for an account, you will be allocated a credit limit for buying shares with. You can only buy shares after you have returned a direct debit mandate, as the cost of any purchase will be direct debited to your account.

There are two ways of buying. The quickest way is Real Time. In other words, you key in the share you want, how much you want to invest, and the site gives you a quote, including dealing charge (from as little as £10 a deal). If you want to go ahead, you click accordingly and the shares are yours. Next day the money disappears from your account!

My preferred way is using the Sharebuilder option. The advantage of this scheme is that it only costs £1.50 a deal, regardless of the size of your investment. For a modest saver like me, this is a godsend! There is, however, a minor catch. The shares you select are bought on a date selected by the Halifax between 1 and 7 days in the future. In other words, if the price should rise between now and the pre-determined date, you will pay the higher price. This does work both ways, so if the price drops, you benefit! As I simply do not have the skill or expertise to determine the perfect timing, I usually settle for the £1.50 option!

Additionally, the Sharebuilder option allows you to purchase a fixed amount of a companys share on the same date each month until you tell them otherwise. So, for example, if you wanted to buy £50 a month of Marconi shares (as someone not a million miles away did) you just give the instruction! If you forget to fund your account, they email to say that no shares were bought and you are not charged!

After each purchase, I get an email confirm
ing the deal.

With many experts recommending that you invest little and often in the stock market, this provides an excellent route to achieving just that. And rather than relying on fund managers, you get the buzz of selecting where your money goes.


SELLING YOUR SHARES

Firstly, you should understand that the more times you buy and sell a share, the higher your costs. Shares should be seen as a long term investment, so buying £50 of Abbey National shares at £4.85 a share will get you 10 shares worth £48.50, after the £1.50 buying cost. If the price goes up to £5 a share, you now have £50 of shares. Cash in your profit by selling (minimum fee £5) and you will only get £45 back.

The only way of selling on this service is real time. You get a quote of the value of your trade and if you click on the appropriate button the deal is done, with fee deducted automatically as quoted. You can then decide where you want the proceeds to be invested next or, if necessary, take the cash!


INSIDER KNOWLEDGE:

This is an execution only service. In other words, you get no advice from professional investors. It is your call where your money goes and any gains or losses are your responsibility. Still, I bet you think you can do better than your endowment company?s fund manager! That said, the site offers excellent access to recent company information, provides graphs on past performance of an individual share and also compares it to the sector average. In other words, you can compare Abbey National to the performance of other bank shares and see how poorly the company has performed in the last 12 months. You are also liable for Capital Gains Tax if you make large gains (unlikely for my size of investment though).


OTHER INFO

Dividends on shares under the Sharebuilder scheme are automatically reinvested in more shares in the same company. This is done to keep the costs of the scheme down an
d to avoid posting out cheques for dividends for silly amounts like 35p! Where the shares were bought real time, you can opt for dividends to be paid or reinvested.

You can check a fully dealing statement online at any time, and also get a current valuation for your portfolio, which will change by the minute as the market moves.

Frustratingly, the site is closed between 10pm and 8am. I have no idea why, but it means I cannot check things before I go to work, and this is perhaps my only downer on what is an excellent service.

Over the past 8 months, I have invested £1400 that is now worth £1250. This actually is better than the market average, so I should obviously be an overpaid city wide boy earning a Porsche a week in bonus.

My investments have been in the following companies for the following reasons. Remember, I am NOT suggesting you should follow suit!

Marconi (bought at 4p as I thought they had done so badly they were bound to go up ? they collapsed to 1.25p a week later, loss of 68%)

Vodaphone (bought at 102p as I thought at least one established telecom company will come through the slump, current price 115p, profit of 13%)

Manchester Utd (bought at 105p, as I thought the long term potential of the international brand, including cable tv rights, would lead to sustained growth, current price 117p, profit 11%)

Torex (bought at 550p, as they sponsor my sons team, Oldham Athletic. Current price 375p, loss 32%)

MyTravel (bought at 120p, as the travel market was bound to improve as we move away from 9/11. Current price 20p, loss 83%)

Safeway (bought at 220p, as I considered them good potential for takeover. Piled quite a bit in and sold at 295p, profit 34%, avoiding the potential for Monopolies Commission involvement in the industry)

Woolworth (bought at 35p, as a good takeover possibility. Current price 30p, loss 14%).

Egg (bought at 130p as a likel
y success story for an internet only bank. Current price 100p, loss 23%)

As you can see, there are some dramatic losses within individual companies, and my Safeway i
nvestment pulled me out of a hole. I have also avoided investing in my own employer, as they would then control my salary, pension, share options and savings!

As none of my holdings are substantial, I have made a decision to continue building up the investments in the companies above, and not expand the portfolio any wider. This means that when I do eventually sell, I hope to have at least £500 holdings in each, which makes the cost of selling much lower as a percentage of the total transaction.

The service provided is excellent. The money I have lost to date does not really matter as I would have spent a lot more pursuing any other hobby. And I still have hope that I will more than earn my losses back as the market (hopefully) picks up. The surge of frustration as MyTravel lost me a small fortune, compared to the feeling of smug joy as Morrisons bid for Safeway (told you so Dad!) and I recouped most of my earlier losses. And what money have I lost? Dooyoo, Yougov and Ciao money I never previously had. Overtime money that I would have frittered away on nothing in the dim and distant past. And £20 a month that I would have spent watching my beloved Stockport play appallingly. And I can still look for BIG gains in the future!

Halifax Sharebuilder is a winner for me!

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