Stocks and Shares - the long game, newbie needs advice

Zola.

Hi folks,

I know next to nothing about stocks and shares, but I would like to start thinking about maybe putting a small portion of my pay each month into some sort of shares scheme.

Can someone help point me in the right direction?

As I say I know very little - who to go to, what to start off with etc.

Are there any smart and safe places to invest (other than a bank!)? I am happy to let it sit for years and years but need to learn more about it in general. Any help would be much appreciated. :beer:

BLB53

Are there any smart and safe places to invest (other than a bank!)?

I would suggest starting with a low cost, broadly diversified index fund - sometimes called trackers.

You will also need to open an account with one of the low cost brokers such as AJ Bell or Charles Stanley Direct.

There are many trackers to choose from - personally I use a selection from Vanguard - my largest holding is their popular LifeStrategy range - for me LS60 which is 60% equities and 40% bonds.

Maybe read a little more on some of the blogs etc before starting - the likes of monevator http://monevator.com/category/investing/passive-investing-investing/ and also diy investor uk http://www.diyinvestoruk.blogspot.co.uk/

If you go as far as reading material I can recommend Tim Hale's 'Smarter Investing'.

Dird

BLB53 wrote: »

If you go as far as reading material I can recommend Tim Hale's 'Smarter Investing'.

Is that book not all "just buy an index tracker"?

Zola.

What about ETFs?

coyrls

Dird wrote: »

Is that book not all "just buy an index tracker"?

No, it's not, a lot of it is about asset allocation, which applies to both active and passive approaches. I learned a lot from the book but my portfolio has both active and passive funds in it. The core holdings are passive but I have some active funds in his so called "tilt" areas and some active bond funds.

bowlhead99

Dird wrote: »

Is that book not all "just buy an index tracker"?

He does go a bit OTT on the passive investment evangelism and there is quite a bit that I remember he'd just throw in something like, "and of course, as you remember from earlier, you obviously won't be paying active managers, as you probably now understand" which is a bit patronising.

Overall though, if you're a beginner it can be quite a sensible approach that takes you through the broad concepts and how much to consider putting away at what sort of growth rate to get what sort of return, and covers asset allocation aspects too.

Unlike some well-known investment books it has been written by someone this side of the pond (though of course is littered with quotes from people who promote passive investing like Bogle of Vanguard fame, who stand to get richer if people follow the ethos of the book) but being written from a UK perspective helps the concepts not be too alien. The last edition was tweaked a bit after the credit crunch had bedded in for a couple of years, so as not to feel too dated.

So I think it's not too bad if you're a newbie. Others who don't need a reminder of the basics and already have their own views and research, are less in need of reading it. But not a terrible book. Even if the message was just as simple as "get some trackers"as you suggest, there is of course more to it than that, so it won't be a waste of money for a new investor. Of course, you shouldn't try to live your life by one book alone.

BananaRepublic

Investments may include property (ones own, BTL etc), stocks and shares, bonds, precious metals, wine, antiques and collectables, art and so on. You would do well to read up on these things, as well as unit trusts, investment trusts, risk, stockmarkets and so on. The problem is that many books seem to be patronising and windy, an American trait dare I say, as they try to be 'folksy'. And many are in the 'How to get rich quick' mould, no doubt because these popular self help books sell. Wikipedia is not bad for some comcepts. I noticed a book by Andy Bell who founded A J Bell You Invest, a browse through the example text on Amazon suggests it is okay. I do wish there was a more terse book, "Investing for people allergic to windy prose", or some such name.

eskbanker

bowlhead99 wrote: »

Of course, you shouldn't try to live your life by one book alone.

Religious types may disagree with this sentiment!

Zola.

Would there be much benefit in putting in say £50 a month so to an Index type fund, would there be any point in this? Can you even do this? Is that too low?

I am thinking long term plan, like 20 years.

Eco_Miser

It's possible, and sensible. Open an ISA account (so you don't pay any tax on the growth or dividends) with a low-cost platform (low cost for regular investing, that is) Monevator have a comparison table. Some platforms have special low fees for regular savings, others don't charge transaction fees, but a percentage of your holding.

You should have more than one index fund, covering different geographies, and/or sector, and/or asset classes (buy just one each month and cycle between your choices), or buy a single multi-asset fund such as Blackrock consensus, or Vanguard Lifestyle.

Do your own research and don't take the ramblings of some anonymous guy on the internet as anything more than a starting point for research.

DrSyn

No one will care as much about your money as you will, so the saying goes. Read before you invest!

I suggest you take a look at the following sites and learn from them.

http://monevator.com/highlights/


http://www.fool.co.uk/investing-basics/getting-started-in-investing/how-to-start-investing/