By Joanne HartCreated 6:51 PM on 9th July 2011
The stock market is having tough rise this year, but even in times like these there is money to be made. Midas wants you to tell us how we can help you do that
Stocks and shares have had achallenging year so far and littlechange is expected, as long as economicconditions remain bumpy anduncertain.
Some shares have withstood thegeneral malaise, but it is increasinglyimportant to pick stocks withcare and to watch how they performthrough good times and bad.
Other assets have had an easierride, but almost every type of investmenthas been hit by volatility.
Big losses: the BP oil rig disaster showed that even blue-chip shares can suffer large falls
Midas aims to provide help andguidance on as many different typesof asset as possible. We focus onshares because they are the mostpopular form of investment in Britainand they are easy to buy and sell.But we want to make sure we aregiving readers the best possibleservice, telling them what they needto know about the assets that mostappeal to them. So we are invitingall our readers to participate in aquick survey.
It has been more than 18 monthssince we last conducted one and inthat time the economic and politicalclimate has changed substantially.the Government is determined tobring down the budget deficit, butthat means cutting public spending,with repercussions for businessesand consumers.
In this austere environment,investing wisely is critical. Savingsrates are desperately low, so forthose with cash to spare, leaving itin the bank is not an attractiveoption. With these conditions inmind, we are posing seven questionsto our readers.
1. WHAT IS YOUR APPETITE FOR TAKING RISKS?
This is the most important questionfor anyone wanting to invest theirmoney in the stock market – howmuch risk are you prepared to take?No investment is entirely safe, asthe financial crisis and its aftermathhave proved. Even apart from thecrisis, some cataclysmic events havehit the stock market since our lastsurvey, not least the BP oil disasterin the US, which sent the company’sshares plummeting and showed thateven Britain’s largest businessescan give shocks to investors.
However, some shares are likelyto be safer than others. Utility companiessuch as National Grid orUnited Utilities will probably deliverreasonably steady returns over fiveto ten years, particularly when dividendincome is included.
New mining companies or early-stagedrug developers may hit thejackpot, but they may run out ofmoney and disappear completely. Soare you the sort of person whoenjoys a bit of excitement and hasthe spare cash to use the stock marketin this way? would you prefer toinvest only in safer bets? Or are youkeen to do a bit of both?
2. ARE YOU LOOKING FOR ANNUAL INCOME OR CAPITAL GROWTH?
Most investors would like to seetheir shares surge in price whilepaying a generous annual dividend,but this combination is rare.usually, firms paying a substantial dividend are big, mature businesseswith enough money in thebank to reward investors well.
But their size and stature meanthey are likely to grow at a relativelyslow and steady rate – andtheir share price will too. Sharesthat deliver big rises in value tendto be in less established firms.Often called growth stocks, thesecompanies tend to plough surpluscash back into their businessinstead of paying it out in dividends.
Often, but not always, high-yieldingstocks (those whichprovide a good annual income) aresafer bets because they will notsurge in price from one year to thenext but they are less likely tocrash in value or collapse entirely.
With savings rates at such lowlevels, income from shares is particularlywelcome, but capitalgrowth is rewarding as well. So,would you like to find out moreabout the stocks that provideannual income or those that concentrateon growth and are lessbothered about paying dividends?
3.HOW MUCH DO YOU TEND TO INVEST?
Investing in shares is a seriousdecision and it is never a good ideato put in more than you are preparedto lose. some people like toinvest substantial sums in a fewwell-chosen stocks. others like tospread their risk, investing smallersums in a big selection of shares.
Putting all your eggs in one basketis rarely wise so Midas suggestsinvestors try to build asbroad a portfolio as they can. Eventhen, individual sums can varyenormously. So, do you like toinvest up to ?500, between ?500and ?1,000 or more than ?1,000 percompany?
4. HOW LONG DO YOU HOLD SHARES FOR?
Shares are generally long-terminvestments, so there is little pointcommitting money to the stockmarket unless you are prepared toSign up for yourMidas Extra share tips atthisismoney.co.uk/midas-extraleave it there for at least three to fiveyears. some investors take a muchlonger view, however, keeping sharesfor decades and enjoying the annualdividend payments.
Others are keenerto trade, keeping a close eye on dailyprices to take advantage of suddenmovements up or down. What sort ofinvestor are you – a long-term holderor an eager trader?
5. HOW OFTEN DO YOU MAKE a MIDAS INVESTMENT?
Reading about different companiesmay sound intriguing, but actuallyinvesting in them can be more daunting.Parting with cash can make somepeople rather nervous, especiallywhen times are tough. Do you investin Midas shares less than twice a year,between twice and ten times a year ormore than ten times a year?
6. ARE YOU INTERESTED IN OTHER TYPES OF INVESTMENT BESIDES SHARES?
Midas focuses on British shares,even if the majority of their salescome from overseas or they are jointlylisted on another stock market besidesLondon. But we do write about otherassets. Last weekend, we looked atwine as an investment and we alsoconsider corporate bonds from timeto time, particularly since the LondonStock Exchange launched its retailbond market.Do you like reading about these differentassets? would you like to findout more about alternative investments?Or would you prefer Midas tostick to equities?
7. WOULD YOU LIKE TO KNOW MORE ABOUT THE MECHANICS OF INVESTING?
Any sort of investment can seem confusing,particularly if you are not terriblyexperienced. Midas tries to makeits advice as accessible as possible,but we do not talk much about how toinvest. would you like the column toprovide more advice of this nature –how to buy shares, how much tax youhave to pay when you sell them,whether some types of investment arecheaper or easier than others?
– We are keen to make sure Midassuits you and provides the guidancethat you most need. Please respond toour questionnaire either by email , or bypost at Midas Questionnaire, FinancialMail on Sunday, 2 Derry Street,LondonW8 5TT.