A Virgin Trader

The truth is out there!

I have been doing some ‘virgin trader’ talking to ‘the broker‘ again, this time about gold, oil and the dollar.

Now, not normally the sort of person to mince words, he said that the US economy relies very little on the international market, it is a massively domestically fuelled economy. The Chinese are to a large extent the same. Europe and especially the UK are dependent on international trade and in particular the trade in imported commodities i.e oil. He thinks that opening the X-File on the dollar will harm Europe’s fledgling recovery and make recovery in the UK more difficult to achieve, especially if sterling splutters and dies, which it may do for the same reasons as the dollar – there are just too many of them about.

Resources stocks took the FTSE over 5,000 (although it has now fallen back) as they would receive higher dollar prices for their commodities – the problem arises (a realisation that has brought the FTSE back below 5,000) when a lower dollar makes the US more competitive at the same time as high commodity prices choke of any signs of industrial recovery.

v

Tags: Share trading for beginners

I was talking to ‘the trader’ this morning, about why UK bank share prices in particular just keep going up and up as if there was no recession, no toxic debt, no decimated housing market, no huge write offs – the list goes on.

As far as the virgin trader can see, the picture is very confusing indeed. Each week I think the markets will make some sort of correction and each week they go up, but for how much longer?  This week the FTSE 100 is spitting distance from the 5,000 mark, potentially the biggest summer recovery in a quarter of a century according to the FT, ‘a level that would mark a 50 per cent gain since the market’s March low’.  John Hughman writing for the Financial Times IC says “it’s down to investors attitudes towards risk”. He thinks “the risk in the eyes of many professional investors right now is the risk of missing out”.

‘The trader’ in his usual acerbic manner suggests that as in ‘Last Tango in Paris‘ you could ‘spread some butter‘ – why not take a spread bet on the number of days it will take for the FTSE to breach 5,000 or the DJ to breach 10,000 or how many brokers are certifiably insane.

He is resisting capitulating to the fear but is increasingly worried that once the market begins suffering from an overdue dose of vertigo, that it will bring a pack of cards down with it as we plunge into a double dip recession.

There are unfortunately good grounds to justify a prediction of a further stalling not least of which is that the banks have been building their balance sheets and he suspects it is not just to repair the (self inflicted) damage they have done over the past decade but to buttress themselves for what they think is the coming crash.

The virgin trader is feeling the pressure.

Virgin

Posted via email from a virgin trader’s posterous

Tags: Share trading for beginners

As a UK virgin share trader using an ISA (Individual Savings Account) as a trading umbrella makes a lot of sense as a good way to start your online trading journey.

A self-select ISA means you can invest in UK and international equities, collective funds such as unit trusts, investment trusts, corporate bond funds, OEICs (open-ended investment companies) and ETFs (exchange traded funds), gilts and cash, as well as warrants, covered warrants and CFDs (contracts for difference). Yes I know it sounds a handful but after a bit of jargon Googling you will have your head around it in no time. In fact I will explain what they are in a later post, once I find out myself.

Most online brokers offer ’self select’ trading ISA’s. This means that you can basically trade the money inside your self-select ISA without any capital gains tax liability or income tax on the profits. Very cool.  From what I have read on various broker sites it is very easy to setup and trade using an ISA umbrella. Most broker sites have an ISA signup button on the homepage. And if you shop around you should be able to find one that has no ISA administration fees or inactivity fees.

m

Tags: Share trading for beginners, share trading tips