Friendly advice

Hey everyone. So just from the offset i am looking for some friendly advice and understand this is not financial advice. Also, please can whoever replies be nice. I some times find that people are sarcastic for no reason in this community. I have some money that I want to invest in an Isa. I have no Idea what stocks to buy. What would be some good safe buys.

Amount £5k.

Ambition. 1 yr at least double it.

Many Thanks in advance :slight_smile:

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You can’t have ‘safe’ and ‘want to double it in 1 year’.

If you want to potentially double your money you’re going to have to take significant risk.

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You’ll need to decide what your level of risk tolerance is.

You could put your money in an ETF or fund and probably get a 3% return over a year with some risk to the capital amount.

To aim for a 100% return in a year you will likely need to accept there will be a significant risk of capital loss as well.

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I hope you find the right advice as many here do give good tips on how to invest but I would say asking for double your money in a year does invite a bit of ridicule TBH :+1: Think of the story of the grain of rice and the chess board scenario. This is why your request is impossible to guarantee or we would all be millionaires now.

Now that may sound sarcastic but it is actually the friendliest and best advice someone will give you as regarding double your money in a year and ANYONE who says differently and that you CAN double your money will potentially/likely lose you a lot :+1:

Others have posted sensible advice above.

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Thanks Hazel :slightly_smiling_face::slightly_smiling_face:

Thank you. This is what i mean though. Most people on FT are new investors. Literally this is the first time in my life i have started invested and I don’t know anything about anything. So asking questions which may come across as silly is going to be common. It’s not an invitation for ridicule, it is just baby steps and you have to ask questions to learn anything.

Anyway, thank you for taking the time to reply and for your advice. Much appreciated.

Best wishes

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Like I said about the grain of rice thing, it isn’t realistic. I wasn’t being rude just saying how people will see that comment but you will still get many helpers as it is a great community.

My suggestion would be the same to all new investors and that would be to spend a few days/weeks reading the forums to gain various points of view.

What is good for one is not good for another person but by reading a mixture you will start to see who you trust more than others and generally you will see a logical view. MOST people in the community are very very helpful and always go out of their way to help or give advice including some of those you think are being sarcastic. :+1:

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The expert investors set out to try to beat the S&P, they’re looking for 10% year-on-year, on average. If you want more, you can try the smaller caps, but even there 20-40% is about what you could hope for, if you were lucky. If you want to double it, you need to be basically betting on random unheard of stocks and hoping they suddenly rise in value. Your chance of that happening is approximately zero. Something like 97% of companies are bad investments in the long run, and if you diversify you have a chance that your one good bet will make up for the losses in the others.

Pretty much the entire investment community is expecting a market crash very soon, so there’s almost no chance of anything making 100% return. It’s a pretty sure bet you won’t be making more than 10% either. The best thing to do, rather than wondering what stock will double your return, is to do some research and recalibrate your expectations first.

Whatever you do, make sure that if a crash does happen and it wipes out half or more of your investment, firstly that you can afford that loss, and secondly that you have spare money to buy in the dip to take advantage of the cheaper prices. After a crash, the market will eventually recover (probably) but that could take a couple of years, and if you realise you do need the money after all and sell at a loss, you will regret it.

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Thanks Ralph. Really resonated with your advice. Thanks so much for your time and explaining in such a good way. :slightly_smiling_face:

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About the safest equity exposure you can get is a globally diversified index tracker. These automatically recalibrate regularly. Based on the past few years, you might be looking at around 10% per year if the equity markets remain positive.

I wouldn’t use 2020/2021 as your benchmark for returns - it wasn’t a typical year. Many share prices have risen very quickly, they probably won’t continue to do so.

If you really want to double your money in 12 months you’ll need to find something with potential explosive growth. As noted above this is most likely in small cap businesses. If you choose incorrectly your cash is likely to decrease rapidly rather than increase.

Thank you everyone for such wonderful advice. I really appreciate it. :slightly_smiling_face:

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If you want to double your money with the least risk I’d say put it all on black :wink:

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Lol i should have put it all on Mvis. Would have doubled in 2 days.

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Bitcoin?

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To double your money in one year you need to go for speculative assets like crypto/NFCs. But this means you money could also halve or turn to dust.

The ‘gold standard’ of investment is buying a S&P 500 ETF or fund which yields on average 7-8% per year. The worst downfall you can expect is 20-30% in case of a crash.

To give you a comparison, buying a property and renting it out yields around 5% (a lot of variation here depending on the location) but the downfall is usually small (although it was 20-30% when the crisis hit).

So you need to make a decision based on your risk appetite and long term plans. Forget about becoming rich by investing 5k, you need a lot of luck for that.

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I’m pretty new to investing and similar I guess to many in Freetrade who were getting sick of such low savings rates.

My advice would be to do lots of research online and YouTube. There are some very good investing channels on there.

Yes, take a punt in some stock and keep your fingers crossed it works, but expecting that sort of return is a gamble. Only put in what you’re prepared to lose.

Please consider longer term investments; funds and ETFs. Again do the research. If you go with a diverse portfolio (global trackers) and build it over years, you’ll do well. Stock ISAs can be used as a great platform for this. Also make use of pensions (SIPPs). The government will add 20% on top of all contributions you make. That really is money for nothing. I realise you can’t touch that money till you’re 55. But it’s fun watching it grow. Long term investments are the way. You’re probably young now and don’t want to think too far ahead, but believe me, from personal experience, your older you will thank you in the future!

Sorry if I’m coming across as boring :joy:

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Thanks so much. You don’t sound boring at all. Very sensible. Really appreciate the comment. :slightly_smiling_face::slightly_smiling_face:

Hey Kirran, I’ve now been investing for around 18 months, which means that I saw the bubble at the end of 2019, the crash in March '20 as a result of COVID-19 (i lost 40% on my porfolio overnight) and the rise, fall and rise again of companies since (nothing follows a straight line). I’m thankfully up overall after all of that. But I have taken a few key points away:

  • In general, avoid FOMO. If something is on a tear then (normally) when you notice people will start to taking profit and the price will pop. Tesla and Bitcoin are noticeable expections to this - but be careful! I pumped money into Gold at the peak.
  • The stock market is largely emotional rather than logical. My profession is an Analyst and I tried to second guess when the market would react to COVID. I mistimed it. Missing profits and losing c40% on my portfolio. Prices can and do go up and down based on fear or optimism, rather than fact.
  • Look for price cycles. I mentioned earlier that nothing goes up in straight lines, I look for stocks which appear undervalued, BUT are also at the bottom of a price cycle. I bought into a AVIVA, Alpine4, Micro Focus, Virgin Galactic, Legal & General to name but a few on this basis. Its impossible to time the bottom and top, but as long as you think the stock is undervalued and is heading upwards overall and you are prepared to have a get out profit (mine is 10%), then its worked for me.
  • Diversify, but not too much. I’ve tried 40-50 stocks and i lost touch with news, AGMs, dividend dates. I’m now down to 10-20, with around 5 I have the most of my money in. I accept this is high risk but i’m after big profits (up c50% even after the 40% loss).
    I could go on… but hopefully that’s a decent start. And most importantly, this is what’s worked for me. You might want to invest differently and you should spend time developing your own technique. If your unsure, start small. I started with £100 for the first 3 months.
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If you invest in say S&P 500 ETF, you’re invested in 500 stocks and you don’t need to keep track of the news, AGMS etc of every single one of those stocks and you would have had decent profits this past year.

That’s another way of diversifying.

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I suggest you go with 40% in VWRL (or 20% and another 20% in a low volatility ETF), put 40% in QQQ and 20% in something riskier (a growth stock you like, or crypto, or both).

Then start putting a little sum every month, with the same distribution, to average out the fluctuations.

Remember, it’s a long term investment!