I’m just gonna be straight up and honest I have no idea what I’m doing, what I should be doing or how I should start. I want to start with £2 I knw sound very little. But as I am not sure yet that to do. I don’t want to go crazy and make a silly decision. I’d be really apperceive if anyone could tell me how they first ever got started and how you made you first trade? And what am I suppose to be looking for. Sorry for all the questions hopefully someone can help me get started.
What’s your goals? What are you investing for? e.g. long term growth or your money? or something else.
My first ever “investment” was in Northern Rock. During the financial crisis in which they went under. I know, great skills, right?
When it comes to investing now, I consider some of it a gamble and some of it investing. With smaller companies - whose shares typically have a lower value - who can fluctuate more, that’s gambling to me. I only “bet” what I can absolutely afford to lose. With more established companies, I’m still aware that I could lose it all, but it seems somewhat less likely. Even though it is still entirely possible.
I’d say that if you want to start with £2, pick a company with a low share price - in the pennies or maybe 20 pence a share at most - and research them. Read up on what they do, their share price over time and try to understand the market in which they operate. Then make your investment and see how it goes.
If and when you’re ready to commit more and think this kind of investment is for you, I’d seriously consider opening a Stocks and Shares ISA, as it’s a more tax efficient way of doing things. Read up on everything carefully and understand what you’re getting into, of course. But if you think this is a way of reaching your saving goals, look into it.
At that point - and if you’re ready to commit more money/take this seriously - I’d do lots of research again and try to narrow down a list of companies that operate in different markets. Track them for a while, try to understand them and then repeat the above, but make sure your portfolio is diverse.
This is of course not investment advice. It’s just my process. I don’t read company reports, but I try to get a reasonable understanding of a company’s history, what they do and how volatile they are. If it seems like their SP is likely to fluctuate quite a bit - such as Amigo Loans or Deepmatter Group - I’ll invest less and consider it a total gamble. Right now, I invest about £200 a month and split that between some risky companies and some more stable companies who I expect to slowly grow over time. It’s not a lot of money compared to what most are likely investing. However, it’s what I can afford to lose and hopefully, the value of my investments will grow a little over time.
This should give you a bit of literature to go through.
Check out the link there’s a few useful information that can help.
I started by using a practice app for about 6 months so I was using fake money whilst looking at how things worked on a basic level.
I also did one of those online investment courses although it is not needed as all the information is available elsewhere or on YouTube.
By the time I went “live” I still had/have a basic understanding but more importantly for me I understood more about the importance of research.
I follow companies I hold on social media platforms (Twitter/Facebook/LinkedIn) and signed upto vox markets for rns feeds.
I would say if you’re not a beginner do not buy shares (i.e. stock picking) - that’s a fairly advanced strategy. Most people here are clued up so forget that this is something for the few.
This is not advice, but I would personally suggest just investing 60% in an all world stock ETF (e.g. VWRP) and 40% in a bond ETF (e.g. VAGP) - buy little by little each month. This strategy ensures that your eggs are spread across many baskets (diversification & pound cost averaging) and that you will still create a pot that will grow in the long term, but with smaller ups and downs (volatility). It’s called a 60/40 portfolio and it is the quintessential ‘set and forget’ portfolio that suits most people.
Reading a few books on the subject is always good, but I get that not everybody wants to dedicate as much time to this.
Just be mindful that it is a long term investment (i.e. don’t sell within ~20 years), and you will have to endure ups and downs along the way (risk, volatility, etc).
At the moment I’m looking to at least make a small income so I can invest and trade at £20-30 a month is my goal for now.
Thank you so much that was some very valuable information, which I really needed. I’m definitely going to look more into the companies I’m interested in. I’m gathering research Is a big part of investing and you’ve given me a lot of the answers I’ve been looking for Really helpful
Thank you will read through it over this weekend so I can really take it in thanks
I started in exactly the same place as you 18 months ago with tenner. I found following this forum to be a useful place to learn and pick up knowledge
How much are you looking to invest a month justnow? (roughly)
The reason for the questions is mainly so you can think about it if you’ve not already. Generally you want to keep your investments for a good number of years, generally the longer the better. That can differ depending on your goals.
For small investing and just trying to build up a small investment over time I generally agree with @deathwaltz’s post, id definitely consider funds as these are more diverse by default, your money isnt all in one company. You dont have to, but its very much worth considering. A lot of people even if they invest in individual stocks often also have money in a fund or trust (a trust is a company who have investments in a number of other company like a fund but its structure differently).
Few things to note you definitely dont have to have an ISA right now, and an ISA with Freetrade isnt of value to you, at least not immediately.
Don’t just dump your money into cheap stocks, cheap doesn’t necessarily mean its the good kind of cheap.
Usually i tend to direct people to Vanguard and a lifestrategy fund but they are usually interested in investing but don’t have a huge amount of time to learn everything, so something more fully packages is beneficial.
Think about your goals, what are you investing for, what are your plans with the money, timeframe, how much risk are you happy with, etc. Ask here about these if you want, there’s lots people with valuable information.
Looks at funds and investment trusts perhaps. I think these might be where you might consider putting some money to begin with, as they all invest money into multiple companies or funds so they’re more diverse (to varying degrees).
Invest in something when you understand more about the investment. A single company, a fund, or an investment trust it doesn’t matter. get an idea of what you’re putting your money into by reading up on their documents, company details, what they’re invested in. You don’t need to be an expert, but you dont start a new job without knowing anything about the company, you shouldn’t invest in a company either without knowing at least some basics about them.
(you might find you want to save up a little more than £2 initially as that limits your options)
Thank you appreciated, what was the app you used? If you don’t mind me asking to practice, think that would be a useful to use, least make me feel comfortable without the pressure of really investing my real money lol.
Hey thank you, that was really informative, I just want to at least be at a place where I can save for the extras, holidays new fridge etc and hopefully a new car in the future, but in no rush but, would like to be able to bring in an extra £100-200 extra to begin with. Qk question do I need an isa to sell or to begin with can I use a normal account, sorry for sounding like such a newbie but I literally am lol.
For instance I make money on something how do you get it do I have to have a isa to begin with? If that question makes any sense. I hope I’m articulating properly lol.
Check out this guy Lars. 5 short videos on ‘investing demystified’. Really helpful, simply explained advice
I would say if your saving for something like a fridge or holiday this is not the place as your money can go down in the short term. A savings account would suffice.
If your saving for your retirement or long term and would like your money to grow, invest little (or lots) every month and don’t worry about the market fluctuations.
Only my personal opinions, I’m not qualified to give financial advice
I will do thanks
I will give a different view. Don’t worry about it. Stick some money in something you’ve heard of, or spin the wheel and pick a random stock. With luck, it may go up, but with even more luck you will see it drop by 90%. That would be a valuable lesson to have early, with a small amount of money, to understand yourself and your ability to take the risk. I threw a few pounds at Metro Bank before fractions were available because it was cheap. My £4 became £2. I was annoyed and I sold it, but now wish I hadn’t, it would be a good reminder of my failings.
You can spend alot of time researching companies, and only really works if you enjoy it, and you are really unlikely to beat just owning the market. Owning the market means buying a little bit of all the companies and you do that by buying an index. Stock picking can be an interesting and profitable past time, but keep that to a small portion of your total. If having more income is your goal, you would almost certainly be better served spending that time improving your skills in something else.
After that? Buy a low cost index (something like the Nasdaq 100, SP500 or VWRP), read a sensible book like A Random Walk Down Wall Street, add money when you have it available, don’t check your balance everyday, focus on increasing your income and saving rate and then…do nothing. That is the hardest part.
I’m glad that I could help and you’re most welcome.
When I opened my Freetrade account, I didn’t go for an ISA right away. They’re serious and not for me, I thought. If your goal for now is £20 to £30 a month, the £3 management fee probably isn’t worth it for you. It ultimately is the best way of doing things for a lot of people, because you pay no capital gains tax at all when you sell shares or on dividends. As I understand it, anyway. Naturally, there’s a fee of some kind with almost all providers.
If you reach a point where you can either justify paying for Plus or put a lot more a month into this, though, I’d give it a serious look. The frequency of trading that not paying a fee to trade encourages and making profit here and there might ultimately make it worthwhile. Especially if say, 6 months from now you realise you actually have quite a decent position in a company and it’s going to make you a profit.
I used trading212 practice app as it was pretty much the first I came too lol. However I found it excellent to just remove the stigma that investing is too difficult for your average person.
Not sure if already been mentioned but time in the market always beats timing the market. Cost average is king.