As a leading retail stockbroker, The Share Centre is in an ideal position to help you get the most from the Shares4Schools competition. Below, we highlight some things you might like to bear in mind when making investments.
First, you need to decide whether you are investing for capital growth (a rise in the share price over the period you hold the shares), income (the dividends companies pay out to shareholders), or a mix of both.
Don’t forget, income from dividends will provide you with new money to invest. Because the dividends paid out by different companies varies enormously, the amount of new money available to your team depends on the shares you invest in.
If you are lucky enough to see a significant rise in the value of your investments early in the competition (particularly in riskier shares) consider selling them. Remember, a profit is not a profit until it is cashed in.
Just like full-time investors, you need to avoid getting too attached to your shares, particularly those which have served you well in the past.
Creating a portfolio of investments
You should consider the time horizon you are investing in. For example, investing all your cash in large blue-chip companies may help you protect your investments from extremely volatile periods, but there is less scope for larger profits to be made.
The competition only lasts a period of seven months so you could look to include one or two blue-chips as the core part of your portfolio, supplementing them with smaller companies on the Alternative Investment Market (AIM), for example.
Important factors to consider
Before investing in a particular company, ask yourselves the following questions:
- What is the company’s trading history?
- What markets are the company listed on?
- What is the company’s core business?
- Is the company researching new products or producing them?
- Will products be launched during the period of the competition?
- Is the company’s business seasonal?
- You can find a wealth of information on The Share Centre’s website.