Investment advice

xylophone

Are you likely to want to buy a house/flat before you are in your mid/late twenties?

colsten

I was just interested to read that you got paid dividends from banks when e.g. Lloyds clearly didn't pay any dividends for years.

No doubt you will now respond to say you didn't mean to say that / you didn't say you got paid Lloyds dividends. However, this is precisely how it read, and I think it is very unfair to paint an all-rosy picture about shares to a 17 year old.

lozzy1965

colsten wrote: »

I was just interested to read that you got paid dividends from banks when e.g. Lloyds clearly didn't pay any dividends for years.

No doubt you will now respond to say you didn't mean to say that / you didn't say you got paid Lloyds dividends. However, this is precisely how it read, and I think it is very unfair to paint an all-rosy picture about shares to a 17 year old.

You are correct, I did not intend to imply that EVERY share I owned carried on paying dividends throughout the financial crisis and I apologise if that is how it read. I did intend to imply that it is important to diversify ones holdings across companies and sectors (one tends to get a lot of geographical coverage by virtue of investing in 'large' companies).

I really do not intend to push a "Individual Shares are better than Funds" point of view. There are pros and cons to both. The Funds option, as Archi Bald pointed out, gets a lot of press. I intend to simply offer the Shares option, which seems to get a lot of Fundies backs up for some reason.

Anticipating the "but is this right for a 17 year old" questions, I started at 18, why not? If you want to get into it, why not start young?

ManofLeisure_2

lozzy1965 wrote: »

Your point being? That shares can go down? That there is always a risk? Yes they can, and there is. That's why one diversifies. I held shares through the 2008 crash, including bank shares. My portfolio went down 30% that year. My dividends were still paid. My portfolio recovered. Through the worst stock market crash in many generations I have still made an average of over 8% per year for the last 8 years, not by being lucky, but by investing sensibly and diversifying sensibly.

It's not for everyone, but it's an option if you know the risks, are happy with the risks and want to get into it.

No my point isn't that shares can go down, but rather that it is possible to lose ''everything'' as in the cases cited.

I understand about diversification and have held what would be considered as very 'risky' shares, but in so doing have made substantial gains. However, I would not advise anyone to do the same, unless they can afford to lose the money which they have invested.

Ifts

Elizabeth_ wrote: »

I would like to invest this money but have only a little knowledge of investing and the market.

You have time on your side so don't rush into anything that you are unsure of.

Read up on different types of investments and do plenty of research. Start small and build up your investments as you gain more knowledge (too many times people get burnt when they start investing with large amounts which then puts them off investing again which is a shame as they leave their money in savings accounts paying below inflation) you could start of using funds and add individual shares as you become more confident.

Maybe before you commit real money try it with using 'fantasy money' by using a practice account:

https://www.share.com/accounts/other...ount-overview/

do remember that the practice account is free of dealing charges so make sure you account for dealing costs of buying and selling (*£6 to buy & £6 to sell, plus stamp duty is payable at 0.5% of the value of the shares purchased) when doing your sums and see how you do without risking your own money.
Also I would add using a practice account will give you some idea in what is involved but it will differ when using real money, emotions etc.

*I use X-O.co.uk to buy/sell at £5.95 flat rate per trade.

If I was starting my investment journey today the one thing I would do differently is - I would make sure that I use up my S&S Isa allowance each year.
I regretted not doing that sooner when you have been fortunate enough to buy shares that have gone on to be 5 and 10 baggers then CGT is a pain (a nice pain but one that is avoidable!) but there is no CGT when you buy and sell shares through your S&S Isa, also easier as less paperwork.

Well done wanting to start early and Good luck with you're investment journey.

BucksLady

[QUOTE=lozzy1965;6628471

. My portfolio recovered. Through the worst stock market crash in many generations I have still made an average of over 8% per year for the last 8 years, not by being lucky, but by investing sensibly and diversifying sensibly.
[/QUOTE]

I don't think 8% is very impressive to be honest. My trackers have exceeded that level of return by a long way.

kidmugsy

Elizabeth_ wrote: »

I am ... 18 this December; I will be receiving 50K inheritance. ... Im not sure where I want to invest it or if I even have enough do this. Any advice would be extremely useful and appreciated.

In your shoes I'd exploit my non-taxpayer status by opening interest-bearing current accounts or savings accounts. A beginner's investment you might start with is a Stocks and Shares ISA with Personal Assets Trust, an Investment Trust i.e. an investment company. Its job is to invest in shares, government bonds, gold bullion, cash and whatnot. Its policy is to try to "time" the markets i.e. invest conservatively (low risk) at times when it thinks markets are high, and then more riskily (i.e. with a greater percentage in shares) when it thinks the stock market is better value. You have several months in which you can study it before opening an ISA. In particular, read its series of annual and quarterly reports. They are an education, even if you finally decide not to invest with them.
http://www.patplc.co.uk

lozzy1965

BucksLady wrote: »

I don't think 8% is very impressive to be honest. My trackers have exceeded that level of return by a long way.

From when to when?
I'm not saying 8% is fantastic. It has beaten inflation and I have input very little in research and knowledge.
Maybe you have been lucky with your trackers, I have not included the most recent year in my stats, as I have not peformed the sums yet. Since I started seriously investing again, in 2006, I'm not sure how any index has performed but I suspect that any Tracker, which is supposed to 'track' an index is not doing a very good job if it is significantly beating the index
Seriously though, I am not saying my way is best. I am open to other options. If you have a well performing fund I am all ears. I just happen to dislike paying a fund managers salaries and capital city office expenses in my premium. Those fees come from somewhere!

lozzy1965

ManofLeisure wrote: »

... it is possible to lose ''everything'' as in the cases cited.

Northern Rock and...? Which consistently High Yield shares have gone totally bust in the FTSE250 in the last x years? And how many have given well above inflation dividends as well as increasing in value?
Another 2008 might occur, but how many generations since the last crash that affected solid companies?

BillJones

As someone who's worked in an investment bank for several decades, the only point I'd make is that what's "right" is pretty much completely determined by what your aims are. As you've not given much information so far, any definitive suggestions about asset classes, allocation etc. can be safely ignored.

Do your own research, and don't limit it too much. Learn about risks, about tax implications, and about how your own needs should suggest a route to take.