If i buy a share in Mcdonalds and hold onto it for 10 years does my profit increase every year?

No. The value of that one share may increase in market value every year, but you only realize a profit (or loss) once - when you sell.

Instead of putting all of your money into one stock, you would be much better served by putting that £1,000 into a good large-cap mutual fund. The good fund managers own solid companies like Apple, McDonalds, and one of my personal favorites, 3M Company. But the fund will own a mix of other companies, plus bonds and even a limited exposure to precious metals as a hedge against currency fluctuation and inflation.

Better yet if you could find two funds that would accept an investment of £500. One, a large cap growth and the other, a large cap value fund. As your capital grows, you can sell a little of both and move some money into other asset classes - international funds, small cap growth stocks.

I'm sure that many of the terms I'm using don't mean anything to you, but it really isn't that hard or scary. Park that money for a few months and see if your local library has books on mutual fund investing. Boring reading perhaps, at first, but necessary. Beginner investors who put all their money into one or two things tend to not do very well.

You see penny stocks are high velocity, fast move, fast paced investments that you don’t typically hang onto for a long period of time. Understand how simple it is to make money with penny stocks https://tr.im/zEVpF

There are exceptions of course. Sometimes you will find some long-term trades that pay off big! Other times you will get into what are known as swing trades and those can really pay off as well. Most of the time though, profitable penny stock trading is all about the short game.

In most cases you will buy and sell the same stock within a week. I’m not talking about day-trading which you may have heard about before. That’s a completely different game with a different set of rules. (It’s also a bit more risky.)

there are no guarantees in anything when it comes to stocks.

who would have thought Apple Inc would recently drop in price from $700/share in Sept to $448 today

If you had the foresight to buy Apple 10 years ago and sold at its maximum you would have made a fortune....but if you bought at its max of $700 then you would be watching almost 1/2 of that investment disappear in 6 months

McDonalds is more stable and certainly a leader in the fast food industry but now at $100/share can it constantly go higher??? Very difficult to say yes as stocks are not helium balloons that rise seemingly forever

The Hi-Tec industry to which Apple belongs to is inherently unstable...you are only as popular as your last success....McDonalds has more chance to grow and rebalance itself in the food service industry but the world is littered with failures in such a sector...McDonalds has avoided serious failure so far but there are limits.

To pick a 10 year constant rising stock today would be a gamble....it would be a gamble at any time actually...that is too long a time period... I do a lot of forecasting here but it is never for more than a few weeks to a month...from one support level to its next resistance level before re-evaluation ...that is doable but the time period you are talking about is impossible.

In this current environment i would avoid any equity and even bonds, especially European and US bonds. You cannot invest in equities long term like you could in the 1980's. People used to find valuable companies, buy stock and pass that stock along to their children because it was relatively safe. That mentally does not exist today due to the manipulated markets and big money drivers. The best investment you can do is use that money to buy your kid a gold coin, store it away for them until they are 18 and give it to them when they are old enough to start learning about long term investments.

The second best thing would be a bond in a STABLE country. Avoid stocks, especially if you are only wanting to put in 1,000. You'll get more return on any commodity (gold coin as an example) with less risk then throwing your money at the people that will end up stealing it down the line.

Of course that is just my opinion. My grandparents bought me a gold coin every now and then when i was little and had my parents store it away for me. When i turned 18 they gave it to me. no counter party risk, no brokerage fees, over 500% profit.

I'm playing http://www.bankofscotlandfantasytrader.co.uk/fanta...

You get £10.000 funny money too play with and buy and sell shares in real time..

Shares go up and down all the time and some companies during the crash lost a ton of cash.

When you buy £1000 worth of shares that costs you £5 in stamp duty

When you sell 1 or a 100 plus shares that costs you £11.95 traders fee

Then you have you have to pay the VAT on any profit...

Some investment companies are doing well but their shares cost a fortune to buy just one.

I buy lots of low price stocks and if I make £100 or less i sell as soon as possible and jump back in when they fall lower than I sold in the first place...

Check http://uk.finance.yahoo.com/ and follow a stock you like plus check their long term charts before you jump in... You'll notice some shares cost a fortune before the crash and if you look long term, they could bounce back like RSB bank...

I just wish I never bought one or two stocks as they take too long to make money and the overheads are a joke for small investors... But its just a game for me and I haven't jumped in for real yet ??

It doesn't really matter if you think the company will be there in ten years or not, it's will the value of the company be up or down in ten years. No one really knows and if they tell you they do know then they are lying.

If you would really like to invest this money for your child's future consider a mutual fund (Unit Trusts ???) Look for something that is broad based to spread out the risk. Consider something that pays dividends and then have the dividends reinvested. Over time the reinvested dividends will compound your returns will be greater.

Well, considering the last 10 years have made buyers ZILCH...The following 10 years could also be just right or more of the identical. There is not any magic method and if someone says something else, they're mendacity.

You buy a share

some time later you decide to sell the share

NOBODY knows if it will have increased in value or if will have decreased in value

Personally I would NOT invest £1000 in shares but in a unit trusts

(unit trusts put together the money from LOADS of investors and buy shares in a lot of companies

With shares you buy a number of shares in one specific company, But in a unit trust you buy "units" and each unit is equivalent to owning fractions of shares in hundreds of companies)

Have a read online about what a unit trust is

I would also just buy units in a "tracker" fund - look online for what these are.

There are several different funds that "track" different things

Have a think about where you believe these funds are going to go over say the next 20 years (long term in the investment market is longer than 15 years) and pick the one you think is best. Cos your guess is as good as mine.

(I would tend to pick the far east but this is more risky than others. In your case maybe say £500 in a "UK FTSE 250" tracker and £500 in a far east tracker. (maybe a "HANG SENG" tracker) - look online for what these are)

My advice -

Before you do anything - read as much as you can about trust funds

They will still be there in a years time

(and a "mutual fund" in the US is the same as a "trust fund" in the UK)

No one knows. Ten years ago no one would have conceived of General Motors going bankrupt and it's stock going to $0.00. It was inconceivable.

I don'[t say this to scare you... A well established company should do well over the next 10 years. If this was for my child..... and especially since you know nothing about stock investing, I would strongly suggest a stock Mutual Fund. Read a couple of books. Learn the basics. With a stock Mutual Fund, the manager makes all the investment decisions.

Using strangers, whose qualifications and motives can never be known for specific stocks or funds to get into... is not a great idea.

Investing in one type of share is very risky as shares can go down as well as up. I bought hundreds of shares in the very good major company I worked for and paid £9 each. They then slumped to around £2 each and have just risen to £2.70. Everyone would have said they were 100% safe yet I have lost thousands of pounds.

It is safer to spread your risk by investing in a fund (a unit trust or an equity ISA) that manages lots of different shares so, even if one goes down, you have not lost everything. Sadly, even they can go wrong. Just over 6 years ago, I invested in a 6-year equity ISA bond recommended and sold by my bank. It has just matured and it paid out ..... exactly what I put in. It has not grown at all. In fact, due to inflation, is is worth at least 20% less than when I invested it. Thanks HSBC!

Savings accounts are safe but interest rates are currently abysmal - typically around 2% so money invested in them would LOSE value because inflation is nearly twice that.

There are no good investments that I know of in the UK without paying up to £250 per hour to talk to a financial adviser. The assumption is that we are too stupid to know we want to put money into an equity ISA or any sort of unit trust or investment bond on our own.

There are savings schemes intended to invest children's money for the future but most have introduced an annual management fee that will eat up any growth on a small investment. Some schemes keep the money until the child is 18.

The simplest solution is probably to put the money in a 'cash ISA' in your child's name. Because it is an ISA, no tax will be payable on the interest. If you are prepared to leave the money invested for a long time, you can get slightly better interest rates but, at the moment, rates are VERY bad because of things the government and Bank of England are doing. If you DON'T commit to a long term investment, at least you can switch the money to a better account when interest rates eventually pick up.

You can compare what is available on sites like www.moneysupermarket.com . Here's a link to their Cash ISA page:

http://www.moneysupermarket.com/savings/cash-isas/