Advice on how to start investing

Amphoras

I currently have some money saved in an ISA, a regular savings account, and I have lent some money on P2P sites like Zopa. I was looking at other investment options like buying shares and government bonds.

I saw that several banks offer sharedealing accounts, but the fees for these seem very high for the amount I want to invest (probably under £1000 at the moment). When I was looking at government bonds, it looked as though it may be possible to buy these as an individual rather than through some kind of broker.

Is it possible to buy shares/government bonds without going through some kind of broker and having to pay their fees? If so, how would you do this? If not, can anyone recommend anywhere that I could invest the small amount I have without the fees wiping out any profit I may make?

davidqu

How well do you do with Zopa with you don't mind me asking?

NoiSeTraDer

How much are you saving at the moment? That's quite a small amount, and so brokerage commissions for developing a diversified portfolio will probably take a lot out of you. I might consider saving and reading for a little while before jumping in.

Amphoras

I've only just started with Zopa, so can't say how well it will do at the moment.

I currently have £3000 in a cash ISA and I'm putting £300 a month in the First Direct regular saver.

I know its quite a small amount which was why I was concerned about the fees. The plan is to start off small then increase the amount I invest as I gain more experience and once I start to earn more. I start a PhD in October, so the amount I can save will go up a lot then.

sabretoothtigger

shares/government bonds without going through some kind of broker and having to pay their fees?

Buy a seat on the LSE and you deal free \o/
Ive read if you deal in person and have your details written onto a certificate, this is free? You just got find who owns them first


Theres always fees somewhere but unit trusts are best for very small investors. The reason is its all percentage based, 1% of a paupers riches is very little to pay for the expertise and research services given out. The min to save is about 50 a month

kidmugsy

"Advice on how to start investing": wait!

But apart from that, consider Investment Trust savings schemes - you can choose one with no initial charge, no annual charge and no purchase charge - that'll make quite a difference on modest sums.

Or, perhaps, choose more than one if that lets you diversify your investments better. Scroll down to page 44 on this link:
http://www.theaic.co.uk/sites/default/files/statistics/attachment/AICStats30Apr2013.pdf

The various Investment Trusts offered by the different management companies are listed on p53 onwards. Don't be put off by the name "Investment Trusts": they are simply investment companies i.e. you buy shares in them, but their business is not manufacturing, for example, but instead investing in shares, bonds, property and whatnot - predominantly shares.

P.S. Government bonds are awfully pricey at the moment: beware.

NoiSeTraDer

Amphoras wrote: »

I've only just started with Zopa, so can't say how well it will do at the moment.

I currently have £3000 in a cash ISA and I'm putting £300 a month in the First Direct regular saver.

I know its quite a small amount which was why I was concerned about the fees. The plan is to start off small then increase the amount I invest as I gain more experience and once I start to earn more. I start a PhD in October, so the amount I can save will go up a lot then.

Possibly your first invesment should be in some educational material. This is a really good intro book:

http://www.amazon.co.uk/Investors-Manifesto-Prosperity-Armageddon-Everything/dp/0470505141/ref=sr_1_7?s=books&ie=UTF8&qid=1373201990&sr=1-7&keywords=william+bernstein

I know from personal experience that jumping in with some inappropriate investments, then having to sell them after I learned more, was a very costly experience. Whereas the opportunity cost of keeping your money in cash is pretty low! Focus on having a plan set in stone for when your PhD starts!

sabretoothtigger

jumping in with some inappropriate investments,

can i ask which?

never buy over a phone is my tip, move slow. 5yr is a brief investment, it takes 10 years to start up a mining operation ,oil is quicker but its always slower then hoped

Amphoras

sabretoothtigger wrote: »

Buy a seat on the LSE and you deal free \o/
Ive read if you deal in person and have your details written onto a certificate, this is free? You just got find who owns them first

Theres always fees somewhere but unit trusts are best for very small investors. The reason is its all percentage based, 1% of a paupers riches is very little to pay for the expertise and research services given out. The min to save is about 50 a month

I'll have a look at these, thanks.

NoiSeTraDer wrote: »

Possibly your first invesment should be in some educational material. This is a really good intro book:

*doesn't let me include the links*

I know from personal experience that jumping in with some inappropriate investments, then having to sell them after I learned more, was a very costly experience. Whereas the opportunity cost of keeping your money in cash is pretty low! Focus on having a plan set in stone for when your PhD starts!

That sounds like some good advice, I'll have a look at that book.

kidmugsy wrote: »

"Advice on how to start investing": wait!

But apart from that, consider Investment Trust savings schemes - you can choose one with no initial charge, no annual charge and no purchase charge - that'll make quite a difference on modest sums.

Or, perhaps, choose more than one if that lets you diversify your investments better. Scroll down to page 44 on this link:
*doesn't let me include the links*

The various Investment Trusts offered by the different management companies are listed on p53 onwards. Don't be put off by the name "Investment Trusts": they are simply investment companies i.e. you buy shares in them, but their business is not manufacturing, for example, but instead investing in shares, bonds, property and whatnot - predominantly shares.

P.S. Government bonds are awfully pricey at the moment: beware.

I'll have a look at them, thanks. When you say wait, do you mean wait because the market is bad for investing at the moment, or wait to read more first?

sabretoothtigger

I think he means patience, dont jump in. My suggestion was regular investing, 1 mistake is ok and if you buy 12 times a year it shouldnt be so bad averaged.

Ironically because money is so bad, investing is basically subsided by government. Its better idea now to take interest in investment dynamics then for decades, holding cash is a seriously leaky bucket. Its a strange dynamic but even then you should think twice beforehand

kidmugsy

Amphoras wrote: »

When you say wait, do you mean wait because the market is bad for investing at the moment, or wait to read more first?

The first more than the second. Some people say that you can't "time the market". My experience is that I have been able to a bit: I've had a couple of good timings for buying, one excellent timing for selling, but have missed a couple of good buying opportunities. The upshot is that I may have missed some chances to increase my capital but I have at least avoided depleting it. In the light of that I'd say that assets are expensive at the moment and I'm in no hurry to buy. A better chance will come along during your PhD years. Or before. Of course, you may be far too busy to notice it.