Buying Shares

[MrPahoehoe]

I'd like to start dabbling in the stock market a bit. However, i'm not looking to spend loads of money per transaction and it seems that most banks offer services that either charge a percentage or flat rate fee on a whichever is higher basis.

I was only hoping to spend less than �100 per transaction (ideally more like �50), but most flat rate fees seem to be at least �10. This means such a small transaction isn't economic as it costs �10 to buy and then �10 to sell - meaning my shares would nearly need to double to make me any money.

Does anyone know of a website, where you can make small transactions for a reasonable percentage, rather than a flat rate?

Cheers, MrP

[Rollo]

I am afraid not. No share dealer is going to process a deal for less than �10, or even more, as a minimum fee. If they did they would lose money on what it costs them to perform the service for you.

[dr b]

Your quoted rate of 10 pounds is about as low as a commission from a discount stockbroker is likely to go, so you are correct in saying that buying 100 pounds worth of stock at a time is not economical.

But, there is a company in the US called Sharebuilder that offers very low commissions and allows you to invest small amounts at a time. They have licensed their concept to HBOS in the UK:

http://www.halifax.co.uk/sharedealing/products /halifax_sharebuilder.asp

commissions are only 1.50 pounds, and you can invest small amounts each month.

Having said that, I would not recommend doing this unless you already have substantial savings and are indeed just dabbling - ie this is money you can afford to lose. Better, in my opinion, to make regular monthly investments into a well-diversified index fund that invests in a basket of world stocks (why restrict yourself to the UK).

[dr b]

As a postscript, the cost of trading (which is really just moving information from point A to point B, as trading moves off of exchange floors and into computers) is falling rapidly to nearly zero. Large institutions pay commissions of fractions of a penny per share; retail commissions ought to be following suit.

There are some banks and fund companies in the US that offer $0 commissions to larger customers.

[Cyber]

HI MrPahoehoe,
Can i ask if you have had any luck with your shares ?

which account did you go for in the end up, the reason i ask is because i am wanting to have a stab at it myself.

all the best