Where to save/invest?

Futuristic

I'm a young adult who has managed to save an extra ~£10,000 over the years and looking to invest or save somewhere that's not an ISA (already hit my limits).

This is money, which I won't need for few years potentially. Looking for safe investments/stocks ideally if going that route. I don't mind having ago at things such as stocks if i'll get back at least my original investment but I understand there's always a risk when doing that anyways.

Thanks!

jabba42

Been done to death, this question comes up every 2 days. 16k results for you below. Happy reading.


https://www.google.co.uk/webhp?sourceid=navclient&hl=en-GB&ie=UTF-8&gws_rd=ssl#hl=en-GB&q=site:http:%2F%2Fforums.moneysavingexpert.com%2F+where+to+invest

Linton

Before you start to invest in shares/funds you should have say 6 months living expenses held as cash - your emergency pot. The reason is that shares generally go up over the long term but may fluctuate greatly in the meantime. You dont want to have to sell your shares to cover a problem, eg losing your job, when prices are low.

Because of the fluctuations you should add any expected major expenditure due in the next 5 years or so to the emergency pot. You are now left with money you can afford to invest for more than 5 years.

To start off with you should stick to funds rather than individual shares. Individual companies can go bust and their shareholders will probably lose everything they hold. Funds invest in dozens if not hundreds of companies so the failure of any one will only have a minor effect on your wealth.

For similar reasons you need to ensure that your investments are diversified, eg cover a wide range of different sorts of companies. Probably the easiest way to start off is with a Global fund which invests in companies around the world. Once your investment plot has grown you can begin to focus on specific areas.

There are times when your investments will do badly. During the credit crunch crash many funds dropped by 30% or more. You will have to be prepared not to panic but simply wait until prices recover . Now most of those funds are at a higher value than before the crash.

On safety - there are many risks. The failure of your bank savings to provide sufficient return for your needs or quite possibly not even match inflation is a risk. Nothing is risk-free. Its more a decision of which risks you can live with.

Once you decide to invest in funds or shares the easiest way to get started is to set up an online ISA account with one of the many providers. With a small investment pot you should probably be looking for ones that charge a % rate rather than a fixed fee. You will need to research which ones have acceptable fees, a user interface you like etc etc.