The Beginners Investment p[process.
Discussion
Your advice and experiences would be a great help with this ones guys.
I have the potential to invest some money, and I keep gravitating towards stocks; however I would like a few pointers as to where to start.
I have looked through a lot of websites and sifted my way through videos on you tube to find the most informative, and I am slowly begining to underdstand the term sand pro's / Cons to investments in stocks.
One of the major things I seem not able to find though is what platform is best to use for my investments, there seems so many?
And is there a generally accepted website/Book/Video etc of a guide on how to start out?
Any help is greatly appreciated.
Tom.
I have the potential to invest some money, and I keep gravitating towards stocks; however I would like a few pointers as to where to start.
I have looked through a lot of websites and sifted my way through videos on you tube to find the most informative, and I am slowly begining to underdstand the term sand pro's / Cons to investments in stocks.
One of the major things I seem not able to find though is what platform is best to use for my investments, there seems so many?
And is there a generally accepted website/Book/Video etc of a guide on how to start out?
Any help is greatly appreciated.
Tom.
Tom,
As desperately uncool as it sounds, build up a cash reserve and protect yourself/your income stream in the event of anything unforeseen. Work out what you want to invest for and what time scale each has. Decide if you want to be hands on, or off. Do you want to be a passive investor, or someone who invests in actives?
As desperately uncool as it sounds, build up a cash reserve and protect yourself/your income stream in the event of anything unforeseen. Work out what you want to invest for and what time scale each has. Decide if you want to be hands on, or off. Do you want to be a passive investor, or someone who invests in actives?
Ginge R said:
Tom,
As desperately uncool as it sounds, build up a cash reserve and protect yourself/your income stream in the event of anything unforeseen. Work out what you want to invest for and what time scale each has. Decide if you want to be hands on, or off. Do you want to be a passive investor, or someone who invests in actives?
This really, build up three to six months cash for emergencies. Stocks usually win long term and interest rates look unlikely to rise anytime soon. As desperately uncool as it sounds, build up a cash reserve and protect yourself/your income stream in the event of anything unforeseen. Work out what you want to invest for and what time scale each has. Decide if you want to be hands on, or off. Do you want to be a passive investor, or someone who invests in actives?
Investing on a monthly basis can avoid big losses if the market plunges as you get the benefit of smoothing out the markets, trackers can be cheap funds but you may want to go beyond the FTSE100 in the UK as smaller companies often have better growth. Also consider Europe, USA, Far East and emerging markets too for some diversity and better returns.
Reinvesting dividends will always be the best way unless you need the income.
I am always happy to suggest Fidelity for beginners.
Have a look at the Select List on their website and it's pretty easy to pick a mainstream fund from there,
https://www.fidelity.co.uk/investor/funds/find-fun...
Something like Fidelity MoneyBuilder Dividend Y-Income, perhaps.
Have a look at the Select List on their website and it's pretty easy to pick a mainstream fund from there,
https://www.fidelity.co.uk/investor/funds/find-fun...
Something like Fidelity MoneyBuilder Dividend Y-Income, perhaps.
It's difficult to give advice to somebody without knowing their exact financial situation and goals, but my generic advice for a long term plan would usually look something like this (in this order):
1. Build up an emergency fund. This should be enough money to be able to survive for 3-6 in the worst case scenario (eg you lose your job). This amount will vary depending on your fixed costs - do you have a long term rental contract or mortgage? If not, would you be able to move in with parents? This fund can also be used for emergencies - eg broken boiler.
2. Pay enough into a pension to get the maximum employer contribution. For example, if your employer offers to match up to 5%, invest 5%. This instantly gives you a 100% or higher return, without even taking into account the fact that you save on tax. If you're a higher rate tax payer, £1 invested in your pension only reduces your take home pay by roughly 60p!
3. Pay off any high interest debts (eg credit cards or unsecured loans). Paying these off will effectively give you high returns due to the interest you will save in the long term
4. Max out stocks and shares ISA - invest in low cost well diversified index funds. For example Vanguard life strategy, or fidelity world equity index
5. Consider paying more into pension if you are a higher rate tax payer, to bring down your tax bill.
If you're able to do the above you're in a very good position, and next steps could be investing in equities outside of an ISA, or possibly bonds, property, business ideas etc depending on risk appetite.
1. Build up an emergency fund. This should be enough money to be able to survive for 3-6 in the worst case scenario (eg you lose your job). This amount will vary depending on your fixed costs - do you have a long term rental contract or mortgage? If not, would you be able to move in with parents? This fund can also be used for emergencies - eg broken boiler.
2. Pay enough into a pension to get the maximum employer contribution. For example, if your employer offers to match up to 5%, invest 5%. This instantly gives you a 100% or higher return, without even taking into account the fact that you save on tax. If you're a higher rate tax payer, £1 invested in your pension only reduces your take home pay by roughly 60p!
3. Pay off any high interest debts (eg credit cards or unsecured loans). Paying these off will effectively give you high returns due to the interest you will save in the long term
4. Max out stocks and shares ISA - invest in low cost well diversified index funds. For example Vanguard life strategy, or fidelity world equity index
5. Consider paying more into pension if you are a higher rate tax payer, to bring down your tax bill.
If you're able to do the above you're in a very good position, and next steps could be investing in equities outside of an ISA, or possibly bonds, property, business ideas etc depending on risk appetite.
Lots of good advice here already.
I use iii (cheap) and Hargreaves Lansdown (expensive).
I always repeat this on every thread about beginner investors - don't try to pick individual stocks. YOU WILL LOSE MONEY.
You have absolutely no idea what you are doing and any winners you find will be pure chance.
There are professionals out there with decades of experience and they still underperform the index on average.
My own personal view is to minimise fees with a big chunk of trackers, and perhaps a few actively managed funds (which I am still not convinced are a good idea).
I also keep a significant chunk in cash for the rainy day fund.
I use iii (cheap) and Hargreaves Lansdown (expensive).
I always repeat this on every thread about beginner investors - don't try to pick individual stocks. YOU WILL LOSE MONEY.
You have absolutely no idea what you are doing and any winners you find will be pure chance.
There are professionals out there with decades of experience and they still underperform the index on average.
My own personal view is to minimise fees with a big chunk of trackers, and perhaps a few actively managed funds (which I am still not convinced are a good idea).
I also keep a significant chunk in cash for the rainy day fund.
walm said:
Lots of good advice here already.
I use iii (cheap) and Hargreaves Lansdown (expensive).
I always repeat this on every thread about beginner investors - don't try to pick individual stocks. YOU WILL LOSE MONEY.
You have absolutely no idea what you are doing and any winners you find will be pure chance.
There are professionals out there with decades of experience and they still underperform the index on average.
Big thanks walm! I had some money in an individual company that could be there for a few years if needed (oil related company so should go up at some point from the relative lows now). Thus I had not been actively checking it. Thought I would check now after seeing your message, and saw it had jumped 80% today! Complete luck as you mentioned in this example, but good to have spotted it, I use iii (cheap) and Hargreaves Lansdown (expensive).
I always repeat this on every thread about beginner investors - don't try to pick individual stocks. YOU WILL LOSE MONEY.
You have absolutely no idea what you are doing and any winners you find will be pure chance.
There are professionals out there with decades of experience and they still underperform the index on average.
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