Stockpickers can now follow the star managers

Shadow the professionals' choices with a new online service. Chiara Cavaglieri and Julian Knight reports

Remember playing follow-the-leader in the playground? Did you know you can do the same thing as a stockmarket investor? That's precisely what a new site, Stockopedia, launched this week promises to help you do. It looks at what some of the best investors would do in a given sceanrio and then follow them, hopefully to riches.

"Investors can pick stocks based on the criteria of investors like Warren Buffett, Benjamin Graham and Jim Slater," says Edward Croft, a former Goldman's trader and co-founder of Stockopedia. "These lists find fast growing stocks, bargain stocks or income stocks depending on your investment preference."

Stockopedia ranks, filters and sorts business data provided by Thomson Reuters to find the best opportunities. Practical features include Stock Reports which enable you to avoid red flags such as "earnings manipulation risk", "bankruptcy risk" and bad financial health trends. This tool proved its merits last week when its indicators flagged Supergroup as high-risk shortly before the retailer tanked 40 per cent following a profits warning.

In essence, Stockopedia is a stock selection tool for the UK market which usually costs £14.99 a month, but is currently £9.99 for early birds.

Mr Croft adds that private investors are at the mercy of poor stock tips and rumours, or over-charging fund managers, the majority of whom underperform the market or are little more than "closet index trackers". But there are some star name managers who seem to perform in most market conditions good or bad.

When starting to look at stocks, check out those professional fund managers buy, for example, the largest holdings in Neil Woodford's Invesco Perpetual fund include GlaxoSmithKline, British American Tobacco, BT Group and Vodafone. All of these are large income generating stocks suitable for those looking to enjoy capital growth with a tidy chance of income. But, remember, the information on holdings is likely to be slightly out of date and you need to consider carefully the type of fund you're looking at.

"While it is impossible to replicate a fund manager's expertise and greater access to information, when managing their own portfolio, investors should adopt many of the same traits as a fund manager would," says Andy Parsons, head of investment research at The Share Centre.

"It is vital to know and set your boundaries; look at the time frame you want to invest over, the level of risk you are willing to take and the sectors and regions you want to invest in."

Thorough research into any share should start with the company's accounts and published research. But as you build your portfolio, just as a fund manager would, you should spread the risk by keeping it diversified and within the boundaries of your own risk appetite.

Many online platforms offer analysis to help, and you may be able to have a dummy run without committing cash, for example, The Share Centre offers a practice account with fantasy money.

If you are going to pick stocks yourself, you can do so through an online dealing account, with a self–select individual savings account (ISA) or a self-invested personal pension (Sipp). With all three, you need a stockbroker, but selecting the service is one of the most important decisions to make.

There are three levels of service to choose from. The most expensive is a discretionary stockbroker, who acts like a fund manager working solely for you, and is free to buy and sell shares on your behalf (based on your preferences) without consulting you each time. This enables them to make immediate responses to market changes and hopefully avoid missing good opportunities.

This is potentially a good option for new investors who lack the time to devote to share dealing. On the flipside, your broker could make more deals than you actually want or need them to. You also need a large sum of money to make the extra cost worthwhile – you are often required to have a portfolio of at least £50,000.

Another option is an advisory service in which the stockbroker offers advice, often sending you market information and stock recommendations. They may also look at your overall portfolio to guide any longer-term goals. You will be consulted before any moves are made so that the ultimate decision is still yours. But again, you need a large sum, this time around £25,000, to get started.

The cheapest option is an execution-only service in which you instruct your stockbroker to make trades on your behalf. Although you don't benefit from advice, most brokerages do provide online market information and research tools to help you make decisions. There is commission to pay which is either fixed (for example at £8 per trade at SimplyStockbroking, or £12.50 at Selftrade), or is a percentage of the sum you buy or sell, (Stocktrade charges its online traders 0.4 per cent for up to 50 trades and 0.2 per cent thereafter). The former could work well if you intend to deal in fairly small sums, while the latter may offer a better bet if you have larger amounts to move around.

You also need to consider how often you will trade as most services offer discounts for busy dealers and conversely, may levy an inactivity fee if you don't meet a set number of trades per quarter. There may be administrative or management fees too, for example, iDealing charges £5 per quarter to cover the cost of running standard, ISA and Sipp accounts,

Transfer fees are another consideration if you want to move your holdings over to another broker and could be charged as a flat fee per trade. Whoever you pick, you also need to pay the 0.5 per cent stamp duty levied on all UK share purchases.

Before you approach any form of dealing, financial advisers say you need some safety measures in place. Crucially, you should be free of debt outside of your mortgage and have a buffer of six months' savings to cover any financial emergencies.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
Jennifer Lawrence was among the stars allegedly hacked
peopleActress and 100 others on 'master list' after massive hack
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
News
people'It can last and it's terrifying'
PROMOTED VIDEO
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
News
i100
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
The eyes have it: Kate Bush
music
News
Fifi Trixibelle Geldof with her mother, Paula Yates, in 1985
people
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Application Support Analyst / Junior SQL Server DBA

    £40000 - £45000 per annum: Ashdown Group: An established professional services...

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Business Development Manager / Media Sales Exec

    £28 - 32k + Uncapped Commission: Guru Careers: A Business Development Manager ...

    C# .NET Developer (PHP, Ruby, Open Source, Blogs)

    £40000 - £70000 per annum + Bonus+Benefits+Package: Harrington Starr: C# .NET ...

    Day In a Page

    Alexander Fury: The designer names to look for at fashion week this season

    The big names to look for this fashion week

    This week, designers begin to show their spring 2015 collections in New York
    Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

    'I like Orwell's writing as much as the next talented mediocrity'

    Will Self takes aim at Orwell's rules for writing plain English
    Meet Afghanistan's middle-class paint-ballers

    Meet Afghanistan's middle-class paint-ballers

    Toy guns proving a popular diversion in a country flooded with the real thing
    Al Pacino wows Venice

    Al Pacino wows Venice

    Ham among the brilliance as actor premieres two films at festival
    Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

    Neil Lawson Baker interview

    ‘I’ve gained so much from art. It’s only right to give something back’.
    The other Mugabe who is lining up for the Zimbabwean presidency

    The other Mugabe who is lining up for the Zimbabwean presidency

    Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
    The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

    The model for a gadget launch

    Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
    Alice Roberts: She's done pretty well, for a boffin without a beard

    She's done pretty well, for a boffin without a beard

    Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
    Get well soon, Joan Rivers - an inspiration, whether she likes it or not

    Get well soon, Joan Rivers

    She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
    Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

    A fresh take on an old foe

    Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
    Fashion walks away from the celebrity runway show

    Fashion walks away from the celebrity runway show

    As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
    Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

    Meet the stars of TV's Wolf Hall...

    ... and it's not the cast of the Tudor trilogy
    Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

    Europe's biggest steampunk convention

    Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
    Don't swallow the tripe – a user's guide to weasel words

    Don't swallow the tripe – a user's guide to weasel words

    Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
    Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

    Daddy, who was Richard Attenborough?

    The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor