10K into shares right now?

[Gooose]

I’ve been chatting to a few friends who are moving into shares now they have dropped a fair bit.

I’ve never done shares before but I suppose now is the right time.

I’m happy to sit on them for 3-4-5 years

Any consensus on who or what to invest in?

[JapanRed]

The general consensus would be to sit on them for 5+ years. I wouldn’t be investing if you might need the cash in 3-4 years.

[Chris Type R]

My view is the markets are still too volatile. Ignoring that I'd put the money into 1 or 2 funds, rather than shares.

Depending on age/circumstances, simply putting the money into pension/sipp would result in a nice gain at the cost of locking the money up.

[Simpo Two]

Gooose said:

I’ve been chatting to a few friends who are moving into shares now they have dropped a fair bit.

I’ve never done shares before but I suppose now is the right time.

I’m happy to sit on them for 3-4-5 years

Any consensus on who or what to invest in?

Most people think of shares as something you buy at X and sell at X+1 to make a profit. You can, but you can also invest in shares for dividends. So even if the share price falls, you have the dividend to enjoy, and if the share price does fall, well, you can buy more of them at higher yield. The main thing to remember is that until or if you sell, the actual share price doesn't matter too much - unless you have to distress-sell of course.

I am by no means qualified to advise you on shares, but some people are afraid of them, and that tells me there are opportunities to be had. Just don't bet the farm.

[bitchstewie]

I'd look at funds rather than individual shares.

Back the field not the horse.

[Simpo Two]

bhstewie said:

I'd look at funds rather than individual shares.

Back the field not the horse.

Fields go down too...!

[shopper150]

Chris Type R said:

Depending on age/circumstances, simply putting the money into pension/sipp would result in a nice gain at the cost of locking the money up.

Would;t that be the same as putting money into funds or shares?

[bitchstewie]

Simpo Two said:

bhstewie said:

I'd look at funds rather than individual shares.

Back the field not the horse.

Fields go down too...!

Oh absolutely but that's a reason to hold a broad range of asset types rather than just equities or individual shares.

For Gooose I'd start with looking at ideas such as Vanguard LifeStrategy or Intelligent Money rather than trying to pick individual winners having "never done shares before".

3-4-5 years isn't long either so I'd also pay attention to how quickly they're likely to need the money and if they need it sooner or unexpectedly how important is it for the £10K they put in to still be worth £10K.

[Chris Type R]

shopper150 said:

Chris Type R said:

Depending on age/circumstances, simply putting the money into pension/sipp would result in a nice gain at the cost of locking the money up.

Would;t that be the same as putting money into funds or shares?

You benefit from the 25% government contribution, and if a higher rate tax payer you get a further 25% tax relief. You can keep the money in the pension/sipp without buying funds/shares until the markets are more stable. You'd ultimately have to invest it somewhere to avoid inflation - but it doesn't necessarily need to be stocks and shares.

[Simpo Two]

bhstewie said:

Oh absolutely but that's a reason to hold a broad range of asset types rather than just equities or individual shares.

For Gooose I'd start with looking at ideas such as Vanguard LifeStrategy or Intelligent Money rather than trying to pick individual winners having "never done shares before".

3-4-5 years isn't long either so I'd also pay attention to how quickly they're likely to need the money and if they need it sooner or unexpectedly how important is it for the £10K they put in to still be worth £10K.

Agreed. For me shares are an entertaining aside, I certainly wouldn't put the bulk of my investments in them as I simply don't know enough, and am not prepared to put the time in. So it really depends how much £10K represents to the OP. If it's 5%, fire away. If it's all he's got, no.

[bitchstewie]

Chris Type R said:

You benefit from the 25% government contribution, and if a higher rate tax payer you get a further 25% tax relief. You can keep the money in the pension/sipp without buying funds/shares until the markets are more stable. You'd ultimately have to invest it somewhere to avoid inflation - but it doesn't necessarily need to be stocks and shares.

Worth mentioning that depending on age you can't get at it for what might be a very long time though.

[Chris Type R]

bhstewie said:

Worth mentioning that depending on age you can't get at it for what might be a very long time though.

Yup, I did qualify that initially - it really depends on OP's circumstances.

[bitchstewie]

Chris Type R said:

Yup, I did qualify that initially - it really depends on OP's circumstances.

Doh sorry missed that!

[Gooose]

I’m 36 years old and the 10k could be left in for 10 years plus if needs be. I don’t need that amount, I have about 30k more in the bank not doing a lot and a house sale when the housing markets open back up which would net me about 30k minimum.

A few mates are investing in AIG, rolls Royce, bp, etc mainly saying they are in a good financial situation but the share price has fallen down so they in theory should get back up there at some point.

Having no experience in this I thought I’d ask for some advice before following them like a sheep

[bitchstewie]

Simpo Two said:

Agreed. For me shares are an entertaining aside, I certainly wouldn't put the bulk of my investments in them as I simply don't know enough, and am not prepared to put the time in. So it really depends how much £10K represents to the OP. If it's 5%, fire away. If it's all he's got, no.

Trust me I'm an absolute amateur but it's scary how much you learn with a few hours reading and I guess there's less excuses for not having time right now

Think of it this way, how much time do people spend reading up on their next car or something similar when a few hours homework could be a difference of literally tens or hundreds of thousands over their lifetime.

There are some good resources out there on places like the Vanguard site and it starts to sink in pretty quickly

[Chris Type R]

Gooose said:

I’m 36 years old and the 10k could be left in for 10 years plus if needs be. I don’t need that amount, I have about 30k more in the bank not doing a lot and a house sale when the housing markets open back up which would net me about 30k minimum.

A few mates are investing in AIG, rolls Royce, bp, etc mainly saying they are in a good financial situation but the share price has fallen down so they in theory should get back up there at some point.

Having no experience in this I thought I’d ask for some advice before following them like a sheep

Personally (and I'm not equipped to have an opinion much less offer one) I'd look at 5k in an S&S ISA holding a vanguard fund and another 5k in NS&I premium bonds.

I'd suggest staying away from AIM shares.

If I was talking to 36 year old me, I'd be pushing putting the money into a pension tax wrapper (if you don't already have one). You can do a pension drawdown in your 50s to fund a mid-life crisis purchase.

[Gooose]

Chris Type R said:

Gooose said:

I’m 36 years old and the 10k could be left in for 10 years plus if needs be. I don’t need that amount, I have about 30k more in the bank not doing a lot and a house sale when the housing markets open back up which would net me about 30k minimum.

A few mates are investing in AIG, rolls Royce, bp, etc mainly saying they are in a good financial situation but the share price has fallen down so they in theory should get back up there at some point.

Having no experience in this I thought I’d ask for some advice before following them like a sheep

Personally (and I'm not equipped to have an opinion much less offer one) I'd look at 5k in an S&S ISA holding a vanguard fund and another 5k in NS&I premium bonds.

I'd suggest staying away from AIM shares.

If I was talking to 36 year old me, I'd be pushing putting the money into a pension tax wrapper (if you don't already have one). You can do a pension drawdown in your 50s to fund a mid-life crisis purchase.

Thanks for you advice and to everyone here replying!

After the sale of my house I won’t have a mortgage and will be mortgage free on my main house, I don’t have a massive paying job but I’ll probably roughly earn around 35/40k a year, I plan to save as much as possible really, I can’t say I’m financially clued up, most is in a Santander 123 account lol

[Simpo Two]

Gooose said:

Chris Type R said:

Gooose said:

I’m 36 years old and the 10k could be left in for 10 years plus if needs be. I don’t need that amount, I have about 30k more in the bank not doing a lot and a house sale when the housing markets open back up which would net me about 30k minimum.

A few mates are investing in AIG, rolls Royce, bp, etc mainly saying they are in a good financial situation but the share price has fallen down so they in theory should get back up there at some point.

Having no experience in this I thought I’d ask for some advice before following them like a sheep

Personally (and I'm not equipped to have an opinion much less offer one) I'd look at 5k in an S&S ISA holding a vanguard fund and another 5k in NS&I premium bonds.

I'd suggest staying away from AIM shares.

If I was talking to 36 year old me, I'd be pushing putting the money into a pension tax wrapper (if you don't already have one). You can do a pension drawdown in your 50s to fund a mid-life crisis purchase.

Thanks for you advice and to everyone here replying!

After the sale of my house I won’t have a mortgage and will be mortgage free on my main house, I don’t have a massive paying job but I’ll probably roughly earn around 35/40k a year, I plan to save as much as possible really, I can’t say I’m financially clued up, most is in a Santander 123 account lol

I think you should defo get much of it out of a bank, where it's losing value when inflation is accounted for, and into some markets somewhere. The time to move into cash was Dec/Jan, now is the time to move into the markets IMHO. Yes they may go down some more, but they are at stupidly low levels and in the near future Covid-19 will be managed and life will return.

Youth is still on your side, so a pension is a good idea, whatever it may invest in. But either way, you have the time to take 'risks' because you're earning and can make up losses. The bad news: I'm not an IFA. The good news: I'm not an IFA.

[JulianPH]

With any share/funds you can invest into these directly or (in most cases) via a pension/SIPP or ISA.

The only difference is the tax treatment (and access, with a pension/SIPP).

I would agree with others here that a fund would be a good starting point before you start to become your own personal fund manager!

Funds also include low cost index trackers, which will very closely mirror markets as a whole and are therefore very diversified.

You can also invest in funds that have a concentrated share portfolio picked by someone who is experienced and has a proven track record in doing this.

I would suggest that a combination of both approaches should be something to think about (before moving into individual fund selection yourself).

Look up Vanguard and Fundsmith, as examples.

[Somebody]

Gooose said:

A few mates are investing in AIG, rolls Royce, bp, etc mainly saying they are in a good financial situation but the share price has fallen down so they in theory should get back up there at some point.

I'd be wary of Rolls Royce. Planes aren't flying. Airlines are in trouble. No new engines in the pipeline, and persistent Trent engine quality problems are well documented.