BEGINNER

Hi all,

Cliche story…. Just started my investment journey and I am very excited to be here. I started with a free share as many probably did too and exploring the app got me more interested. I deposited £10 and invested into B&M (completely random because I was there earlier that day haha)

But like, what’s next? I understand it’s a long game [trading] but I have ZERO knowledge of when’s best to sell, keep it, see how it goessss, what else to invest in? How can I study other UK companies and make informed decisions to invest in them also?

I understand capital is at risk and I’m not willing just yet to go above £30 but yeah, ANY advice would be much appreciated.

Thanks all
Jake

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The best thing to do is read some threads on the forum about companies you like or sectors and then cross reference with external links. Then you can make your own opinion as no-one can really advise. A lot of people think the best way to start is through ETFs as they are usually safer if you have not done your own research yet. :+1:

Also, it is very sensible to start with smaller amounts and as you get more used to the scene then increase even if you are rich. Below is a link for beginners and there are probably a lot of helpful comments on there for you and a very helpful group of people to answer any queries you have.

Ask your beginners questions here :hatching_chick: - First Time Investing :hatching_chick: - Freetrade Community

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Plus there is also stuff by Freetrade here, I still have a rummage through it now and again:

Starting with what you know and like can be worthwhile - if anything, it can give you a starting point and a possible direction (plus if your concentration is as poor as mine, something related to what you know and like makes it more interesting to study :sweat_smile:).

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Hi Jake, as a noobie myself I know what you mean I started a month ago and I’m suprised how far I’ve come! There’s so many new and unique words in the investing world to learn but you’ll definitely develop a new lingo! Be ready to hear a lot of ‘bulls’ and ‘bears’ and ‘upside’ amongst many others!

As some users have mentioned, the forum is really helpful and you’ll learn a lot from just reading what more experienced investors talk about but for a total noob like myself, the most helpful is the link about from freetrades main website, I absolutely love it and credit to the awesome writer/s who put that together as its so easy to read and digest. Secondly I watch a lot of YouTube videos for beginners, although of course YouTube is filled with so much good and bad stuff but as a beginner I think you can learn a lot from watching the basics. There’s an awesome website called investopedia, but for now I’d say stick with the freetrade guides and YouTube as you don’t want to feel overwhelmed. Learning and giving our time is an investment too that I know we’ll all make gains on :wink:

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Hello Jake,

I think you should use the £10 to buy and sell a couple of shares; and get yourself a little bit acquainted with what a share is, how they are bought and sold, and how its price fluctuates.

Once you’ve gotten over the initial novelty of everything, I think a few important lessons are worth noting:

Firstly, you really must distinguish between investing and gambling. Investing should be treated with some discipline. When we use the word “investing” in common parlance, we really mean that something will pay-off in the years to come. If you grow vegetables in a garden patch, then you’d expect the plants to sprout in the future weeks/months. You look after them, then you know it’s an “investment”. If you buy a fancy suit for an upcoming job, then you know that suit will be pay dividends when you go to meetings and meet clients and so on. It’s the same with stocks. You should buy a stock with the same mentality. Unfortunately, people often speculate and gamble; and call it investing. Whilst the odd scratch card is a bit hamrless fun, it shouldn’t be the approach with stocks. You owe it to yourself to take the “investment process” seriously and not kid yourself that you’re investing when you’re just playing around. Again, I’m not passing judgment, of course; but you’re never going to make progress in your investing pool of money otherwise. And that money will be important in your later years.

Secondly, as captured in Warren Buffett’s famous aphorism: “price is what you pay, value is what you get”. Don’t get fixated on the price of a stock. Instead, ask yourself are you getting value. You can determine the value of a stock by looking at the company fundamentals. If you go to macrotrends, they have great guides on the balance sheet, income statement, and most importantly the cash flow statement. They give a beginners guide which I think is pretty good. You can then put a value by a company by applying the DCF of future cash flows. I know it’s probably all alien to you; but stick at it. You’ll find it’s actually fairly simple.

Thirdly, if you really are investing (as discussed in point 1) - then you should be thinking long-term. This is absolutely indispensable to any kind of meaningful success. I urge you to read or watch some intevriews on youtube of Dr. Daniel Kahneman. He’s a very wise man who has drawn attention to our cognitive biases like sunken costs bias and the availiablity heuristic. (These are also important to bear in mind when it comes to investing). According to the eminent psychologist, when we make decisions we usually discount the future and weight the immediate consequences and current information. It’s called hyperbolic discounting. This is totally detrimental. Moreover, we often react impulsively to news headlines with regards to our portfolios. This is insane because so much data/analysis has shown that the stocks that people sold (based on headlines) ended up doing very well a year later. We are wired to think in the moment and make impulsive decisions. Instead, you must force yourself to think long-term. It shouldn’t matter if the stock prices is going to drop in the coming months - the real question is where the stock will go after a year or two. If you’ve studied the company, and read their financial accounts and their annual report; then you should have a fairly good idea about the fundamentals. As Warren Buffett also taught us: " the stock market is a voting machine in the short-term, but a weighing machine in the long-run". It’s the company performance that will eventually come to bear on the stock.

The only way for ordinary investors to beat the market is to be disciplined, have multiple checklists for stock investments, think long-term and see yourself as investing as opposed to gambling. Make up your own mind and think for yourself. There’s no harm in admitting that perhaps some cannot do it. After all, if you aren’t prepared to read some financial statements; then what qualifies you to invest? I think there’s no harm in sticking money in an index (S&P?). Again, no judgement from me. I happen to enjoy financial statements, but I appreciate most people aren’t like me.

I could talk for ages on investing but I think it’s important to form a conceptual understanding about what you’re doing when you’re investing.

Good luck.

Let me know if you have any questions.

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Some good advise on this thread :slightly_smiling_face:

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