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 But, remember, the information on holdings is likely to be slightly out of date and you need to consider carefully the type of fund you're looking at.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; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
Fraudsters are bombarding older people with dangerous pension scams: here we reveal the warning signs
China stock collapse: Five things you need to know about 'Black Monday'
Bargain Hunter: Exclusive discount on a SmartGlider - a self-balancing electric scooter
My Tinder date asked for a refund when I declined a second meet up
Bank-beating exchange rates on your international payments
- 1 Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
- 2 Moscow voted the world's unfriendliest city
- 3 The excuses your boss is most likely to believe when you call in sick
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...
Day In a Page
The terraces of this two-bedroom penthouse apartment offer panoramic views that stretch over fifty miles from the cliffs of Beachy Head.
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.