What would your advice be to a first time investor?

I could not see a post like this previously or if there is one will try to make this a little different.

In a single sentence, what is the one piece of advice you would give a first-time investor or wish you had known before you began investing?

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Invest your money only in index funds / ETFs until you understand how the markets operate

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Don’t take too long before making your first investment, make a small one early as you’ll learn a surprising amount from watching the value go up and down

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I would add to this, that not all etfs are equal and not all have a proven track record.
Less due diligence is required when choosing etfs but, buy and pray for profit is not a good strategy in any situation.

Safer etfs are non-leveraged, non-sector specific and have a low expense ratio. You should know these things about your holdings at the very least.

Reading a book by or about Warren Buffett doesn’t make you Warren Buffett. Stop trying to be Warren Buffett.

Choose your own strategy based on all the information out there

it’s kind of one sentence

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Diversify :wink: aka do not put all your :egg::egg::egg: in 1 :basket:

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Don’t panic if/when you see the value of your investments falling - try and make informed decisions as to whether to hold or sell.

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Read up the article about Bob, the world’s worst market timer, that @Rollingskies linked here a few weeks back.

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I like that tip. I made my first investments almost as soon as I got access to Freetrade (red-headed stepson Android user) and made a few, minimal, buy and hold investments. Watching them go up and down (and down) in the month since has been fairly instructive.

Granted, you could argue the same lesson could be learned with a watching portfolio spreadsheet or similar, but there is something to be said for using real money versus play money, I think.

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Buy the world (eg Vanguard’s VWRL) with most of your money, then see if you can beat it with 10% of your money.

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Don’t lose money. …

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Invest in well recommended index funds, if you want to invest and forget for at least few years.

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I disagree with investing in index funds, you can put money in index funds if you want your money to grow over a long term, this is a safe option but is also very slow. If that’s what you want to do then that would suggest you are not so interested in becoming a investor (more like looking for a bank that grows) and you probably won’t learn as much either.

I would suggest you grab a very small amount of money (e.g. £100), something you won’t sweat about losing. Treat your initial sum as sacred (i.e. do everything in your power to grow it and not lose it). Then do some research and start buying and selling stocks. You will very quickly learn a lot, don’t expect to make much money but you will really start to develop a good strategy.

It’s at that point you will be able to put some money aside for ETF’s (and even more importantly knowing when is a good time to do so) and at the same time put the rest of your money into investing into stocks for quicker returns.

The main takeaway is, find a way to get involved, be persistent and learn from every mistake. Be patient. Don’t invest big until you have been trading for years. You will know when you are ready to up the level, take small steps and LEARN, LEARN, LEARN.

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I think this depends on the person. Some people don’t have the funds or just wanna invest and not think about it every day. Then ETF/Index is the better choice.

If you wanna make it a hobby have the funds, go buy and hold stocks. Do not expect to beat an index fund in the long run with stock picking though.

Or you do a mix of index, stocks and or other asset classes.

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80% put in trust(s) that think long term and leave it for a nice long time
20% have some fun, but only invest in companies you completely understand

Research before
Have some cash In a rainy day fund

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Patience, patience and more patience.

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Just do this. Select a range of ETFs and invest consistently and regularly. Do not sell because the market “is crashing”.

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When you look at a price chart, you see peaks and troughs. It’s very different to experience that ‘line’ with your own money. Buffet, Bezos, they lose money too, so have reasonable expectations of your investment journey!

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Simple one really, but: Buy low, sell high :slight_smile:

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Start right now (you+20 years will thank you) and invest monthly in things that are global, low cost and ideally in a tax efficient wrapper… and then just be patient.

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