The Investment Newbie

Thanks @anon287192 clear and concise.

Look who started with some ETFs!

Already losing money but hey I clearly need to keep learning and looking for when the stock is in a low point with clear signs it is to rise in the long term; and investing my money at those moments.

With the free trades also being just once a day at the close of the market it seems, it puts more focus into per day value and looking at the value dips and highs over the longer term so I think it will actually help me learn as to know what day of the month to invest over say being concerned with daily/hourly ups and downs.

Iā€™ve Ā£50 coming from my moneybox in a few weeks which will be an additional investment alongside Ā£50 a month. Just need to keep learning about finding the best day of the month to buy for one Iā€™m eyeing up. I think for now Iā€™ll just continue looking at ETFs until thereā€™s at least a few hundred across them. I think others have said the first 1k/2k should be entirely ETFs though too.

Loving Freetrade so far!

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If you need personal practical experience to learn this so be it, but make sure you learn the correct way: by keeping notes of every single time you guessed correctly, and wrongly.

What you will find is that, at best, you guess about 50% correctly. Most likely less than 50%.

But if you want to save yourself the time and hassle, Iā€™ll give you the spoiler: it is not possible to time the market.

If there was an hour of the day that it was best to buy shares in, everyone would buy shares that hourā€¦ and then it would be the worst time to buy shares, since more buyers means higher prices.

If there was a day of the week, or a month, where shares were cheapest, then everyone would buy shares that day or month, and then it would become the worst day or month.

If you see prices dropping, you have a 50/50 chance of them either falling further, or bouncing back up. Chartists imagine that they can study the past performance, take various factors in to account, find patterns in the rises and falls, and predict ā€œitā€™s going to go up now, not downā€.

Academic studies have shown that chartists perform worse than random. They cannot predict the future. They do not know the best time to buy.

Neither do you, nor anyone else.

Thatā€™s really the key take-home point. Unless you have deep insider information that affects a very short term buy/sell decision, you have no edge over anyone else. They have the same information, and they almost certainly have access to it sooner than you, and can act on it orders of magnitude faster than you.

Buying a broad index tracking ETF is a situation where you honestly donā€™t even need to care what price youā€™re buying at. Over the long term, intra-day price fluctuations are meaningless. Even intra-year fluctuations will usually be meaningless. Even if you buy at the yearā€™s highest price, youā€™ll still come out ahead over the long term.

The only way you come out poorly is you donā€™t invest at all (waiting for that ā€œbest momentā€ to invest).

Which is why the wise investors mantra is ā€œtime in the market beats timing the marketā€.

Anyway, you havenā€™t lost any money yet, and Freetradeā€™s free 4pm trade is just fine for you. If you learn one thing from this experience, itā€™s to ignore that % gains or losses. Just keep investing, and over a long enough time line youā€™ll come out ahead.

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Good sir, you have been nothing but gracious with your time and patience afforded to me. I am truly grateful, if only everyone could have this fundamental education then investing wouldnā€™t be a scary thing for so many (millennial generations that saw bad things in stock markets destroying opportunity for them).

I will indeed continue to put my Ā£50 aside a month at least. I am doing this for the long term, to just add money and let it do itā€™s thing and never touch it unless itā€™s to invest in something substantial far in the future like a home, a business, or maybe not until retirement comes around.

Start now, keep adding to it and donā€™t get cold feet. Sounds too simple, I love a hands off approach :sweat_smile:

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So I withdrew Ā£44 from my Moneybox S&S ISA. Immediately put it into free trade and bought more of the same ETFs :point_up_2:

I do also want to buy Ā£ Corp Bond but itā€™s pricey for me right now.

If anyone has recommendations of other ETFs (ideally lowish per stock price) I should look to diversify furtherā€¦ love to hear it :ok_hand:

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IUSA May be worth looking intoā€¦ Ā£11 a share (S&P 500 index tracking) good historical performance and quarterly dividends.

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Just a little update on my investments. Due to adding Ā£50 each month (Iā€™ve had two Ā£50 and one Ā£44 from previous ISA) my options are somewhat limited so Iā€™m focusing on spreading across low cost ETFs.

Iā€™m not sure what my split is here of equity, I think Iā€™m aiming currently for 60/40 but I might go more for growth as Iā€™m not investing huge amounts of my money so the feeling of risk is pretty low plus I just invest it and never touch it.

But other than that Iā€™ve just been trying to buy different ETFs that have good record of growth in my very limited knowledge :grimacing:

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Good job, keep it up!

The only etf there which is not equity is the Gilts tracker, so just divide that by the total value of your portfolio to get you split.

What made you chose 60/40?

If you donā€™t need the income you could switch from the dividend tracker in to more fixed interest or something punchier :facepunch: if that what you desire.

One thing Iā€™d point out: thereā€™s significant crossover between many of your ETFs. For example, IUKD will likely contain many of the same securities as ISF. Similarly, there will be duplication between the S&P 500 ETF and IWDG. Thatā€™s fine if intended but, otherwise, you may want to look at allocation first, eg I want X% in the UK and build towards that.

Another thing worth noting: I think Iā€™m right in saying that the MSCI World ETF does not include emerging markets which you may want to consider adding.

Thanks for input. I chose 60/40 split as a recommendation from this useful post:

Iā€™m unaware of crossover in these ETFs, maybe need to look deeper into each before investing. But Iā€™m not all that bothered about it either yet, not quite smart enough in research to what to be looking for.

Iā€™ve noticed the app now splits up ā€œBondā€ and ā€œStockā€ ETFs. Very useful! I believe if I aim for having 40% into bonds list, and 60% into stocks list this gives me that balance Iā€™m looking for with 40% in steadiness and 60% into growth.

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Hey.
Wanted to share an update with my progress. And see if anyone has some knowledge or guidance they want to share. I own all risks with advice :+1:

Iā€™m just a bit uncertain where to put my money right now. Iā€™m still on a monthly addition of Ā£50 to investments. Iā€™m still trying to follow, mostly, this:
https://community.freetrade.io/t/hello-it-s-newbie-question-time/8220/12?u=joe

But getting in on the Ā£ Corp Bond Iā€™ll need Ā£150, so either have to build up some spare cash to do that or look investing elsewhere.

With US fractionals now in, Iā€™m considering it being a good time to get in on Booking.com shares for some long term gains. It seems like an interesting stock as theyā€™ll return again no doubt in future, and a good time to get on it now.

See screenshots of my stocks, I welcome any thoughts on it really. Infant investor right here still.

Iā€™m just gonna be straight up and honest I have no idea what Iā€™m doing, what I should be doing or how I should start. I want to start with Ā£2 I knw sound very little. But as I am not sure yet that to do. I donā€™t want to go crazy and make a silly decision. Iā€™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.

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Whatā€™s your goals? What are you investing for? e.g. long term growth or your money? or something else.

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My first ever ā€œinvestmentā€ was in Northern Rock. During the financial crisis in which they went under. I know, great skills, right? :stuck_out_tongue:

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, thatā€™s gambling to me. I only ā€œbetā€ what I can absolutely afford to lose. With more established companies, Iā€™m still aware that I could lose it all, but it seems somewhat less likely. Even though it is still entirely possible.

Iā€™d say that if you want to start with Ā£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 youā€™re ready to commit more and think this kind of investment is for you, Iā€™d seriously consider opening a Stocks and Shares ISA, as itā€™s a more tax efficient way of doing things. Read up on everything carefully and understand what youā€™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 youā€™re ready to commit more money/take this seriously - Iā€™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. Itā€™s just my process. I donā€™t read company reports, but I try to get a reasonable understanding of a companyā€™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 - Iā€™ll invest less and consider it a total gamble. Right now, I invest about Ā£200 a month and split that between some risky companies and some more stable companies who I expect to slowly grow over time. Itā€™s not a lot of money compared to what most are likely investing. However, itā€™s what I can afford to lose and hopefully, the value of my investments will grow a little over time.

Good luck.

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This should give you a bit of literature to go through.

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Check out the link thereā€™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 ā€œliveā€ 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.

Good luck

I would say if youā€™re not a beginner do not buy shares (i.e. stock picking) - thatā€™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). Itā€™s called a 60/40 portfolio and it is the quintessential ā€˜set and forgetā€™ 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. donā€™t sell within ~20 years), and you will have to endure ups and downs along the way (risk, volatility, etc).

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At the moment Iā€™m looking to at least make a small income so I can invest and trade at Ā£20-30 a month is my goal for now.

Thank you so much that was some very valuable information, which I really needed. Iā€™m definitely going to look more into the companies Iā€™m interested in. Iā€™m gathering research Is a big part of investing and youā€™ve given me a lot of the answers Iā€™ve been looking for :relaxed::relaxed: Really helpful

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Thank you will read through it over this weekend so I can really take it in thanks :blush::blush: