Buying stock as layman, where to start?
Discussion
I'm a complete amateur and decided I wanted to do similar a few years back. Opted for Trading 212 and spent quite a long time playing with the practice money version before adding my own funds.
It allows you to both buy stocks/shares and trade in CFD. I've only really been playing with it, but have made a grand or so. I've also lost a few hundred along the way.
It allows you to both buy stocks/shares and trade in CFD. I've only really been playing with it, but have made a grand or so. I've also lost a few hundred along the way.
The boring answer is probably set up a couple of regular monthly payments into the index tracker(s) of your choice in a SIPP or ISA tax free wrapper.
And then leave it for the long term.
Vanguard would be a good shout for this and there is a wealth of info on their website…
Once you’ve got this under your belt you can look at more “adventurous” undertakings such as buying shares in an individual company.
I would also recommend getting a library card, downloading Libby and PressReader apps and getting into the habit of reading Money Week and the Economist every week…
And then leave it for the long term.
Vanguard would be a good shout for this and there is a wealth of info on their website…
Once you’ve got this under your belt you can look at more “adventurous” undertakings such as buying shares in an individual company.
I would also recommend getting a library card, downloading Libby and PressReader apps and getting into the habit of reading Money Week and the Economist every week…
AllyM said:
You probably want to give a little more info for better responses. Like what do you want to invest/gamble in? Frequency of trading? Within ISA? How much? Etc
T212 if you’re talking about taking a punt on individual stocks/gambling.
Sorry, yes individual stocks. I'm more interested in it for educational purposes than making money. Many years of time in casinos has taught me I don't have the luck to be successful at any type of gambling!T212 if you’re talking about taking a punt on individual stocks/gambling.
Everyone will have their own opinion, but I find Hargreaves Lansdown a good starting point. It's not the cheapest, but the app is good, you can call them easily if you have an issue, and there is a good range of stocks, funds etc to research and buy/invest.
You can use an ISA wrapper to protect the investment from tax, investing up to £20k a year.
Individual stocks will have a trading cost, from memory about £11/£12 to buy and sell, but no ongoing cost. You collect dividends a couple of times a year.
Funds have no trading cost, but do have an ongoing cost which varies from about 0.05% to 1%. Funds are a basket of shares, can either be geographic, index linked, sector specific etc, depends on what you want.
You can use an ISA wrapper to protect the investment from tax, investing up to £20k a year.
Individual stocks will have a trading cost, from memory about £11/£12 to buy and sell, but no ongoing cost. You collect dividends a couple of times a year.
Funds have no trading cost, but do have an ongoing cost which varies from about 0.05% to 1%. Funds are a basket of shares, can either be geographic, index linked, sector specific etc, depends on what you want.
Take it from Warren Buffett, if you want to invest but haven't the time to investigate or monitor then a low cost INDEX fund is the way to go. Indexes or Indices have always especially in the US trended upwards over time.
If you do buy individual stocks, know what you are buying and appreciate that even the best stock can go down and may not recover (GE, Xerox GM) and hundreds more.
The beauty of an index is that it removes the weakest and replaces so you don't have to.
The often misquoted "buy and hold" really only applies to indexes as they have trended upwards and it's reasonable to think that the leading ones will continue to.
Also be aware that they can retrace or under perform for periods of time as the average is used and bull markets alter that.
The US large cap and Tech markets have out performed and probably will continue, if we assume that America will continue to lead the world.
Other markets such as emerging go in fits and bursts and if you can't watch them you can wake up to nasty surprises.
If you do buy individual stocks, know what you are buying and appreciate that even the best stock can go down and may not recover (GE, Xerox GM) and hundreds more.
The beauty of an index is that it removes the weakest and replaces so you don't have to.
The often misquoted "buy and hold" really only applies to indexes as they have trended upwards and it's reasonable to think that the leading ones will continue to.
Also be aware that they can retrace or under perform for periods of time as the average is used and bull markets alter that.
The US large cap and Tech markets have out performed and probably will continue, if we assume that America will continue to lead the world.
Other markets such as emerging go in fits and bursts and if you can't watch them you can wake up to nasty surprises.
DaveA8 said:
Take it from Warren Buffett, if you want to invest but haven't the time to investigate or monitor then a low cost INDEX fund is the way to go. Indexes or Indices have always especially in the US trended upwards over time.
I've done this and doubled my investment over 10 years. It makes me look like a trading genius.It did occur to me that if I was to do this and if my pension is in low risk stuff, shouldn't I just chuck more in my pension?
A platform like Etoro is also one to consider, quite easy to understand for the layman.
https://www.etoro.com/
https://www.etoro.com/
MrBig said:
Sorry, yes individual stocks. I'm more interested in it for educational purposes than making money. Many years of time in casinos has taught me I don't have the luck to be successful at any type of gambling!
I began as a complete novice about 40 years ago. It is good that you want to learn about business investment, because doing it the right way and with a little luck, it can transform your way of life.
My initial attempts were all wrong. I thought buying small companies would be best because they can grow fast. Mistake.
I was buying then selling after a few montha if the share price had increased. Mistake.
After some time, I realised big companies held long-term is the bedrock of a successful portfolio.
Also, do not get sucked into the latest trend. The 1998/1999 'dot com' bubble was an example of that. Many new start high tech businesses with grand expectations, grabbing shareholders money. I avoided that. Big companies went out of fashion for a while, but when so many tech companies went bust, investors turned back to traditional businesses.
You are buying parts of businesses, so concentrate on the business aspect and try to think about how that business can progress in both good and bad times. Gradually learn your way around annual financial reports. Don't become mesmerised by share prices, leave that for the short-term gamblers. Keep accurate records of your holdings.
Taxation has now become much more severe, so even for new investors, holding your shares in an Individual Savings Account is now a wise move from the outset. At present, free of dividend and capital gains tax. When compounding gathers pace, you will be glad you did that. A J Bell is an efficient firm to use with very fair charges.
Other points.
Don't use money that you need.
Never use borrowed money to buy shares.
Understand what you are buying. No complicated magic trading platforms.
Don't be persuaded by a so called expert, who claims to make you wealthy quickly
Be very patient with your investing.
Learn as much as you can about sensible long-term investing.
You need the right temperament. If you would loose sleep during a stock market crash, then it might not be for you.
During those rare occurrences, buying good businesses cheaply is the opportunity, not immediately selling in panic.
See if you enjoy watching Berkshire Hathaway annual general meetings (YouTube). Warren Buffett is a wonderful teacher and has seen everything, during his fabulous investing career.
Hope some of that might help and I wish you well.
Edited by Jon39 on Thursday 6th June 18:42
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