Investment for beginners?

TheLondoner

hi guys,

Since the interest rates banks are offering are going down the gutter, I'm looking to get into cautious investing of a small part of my weekly income. I'm thinking of between £50-100/wk. What kind of investments are low risk and offer fairly good returns?

I'm also reading a book about trading shares. Is this an option worth considering if I have some disposable income?

I've no experience in investing and want to start and any tips/ideas/recommendations would greatly be appreciated.

Thanks a million!

C_Mababejive

There are plenty on here who know far more than me but just to throw my bit in, Id say consider a low cost index tracker with regular investment via direct debit.

I wouldnt advise getting involved in direct ownership of shares.

The amount of money you are talking about is way too low and you will lose big money quickly.

Its way way too risky,,also the markets are riding high at the moment.

I do a bit of buying and selling of shares and each deal involves at least £3000.

As an example, the last deal i did a few weeks ago was £10k

george4064

I assume you've used up all the current accounts and regular saver accounts? (within reason)

If so, I suggest doing some reading to decide on whether you want to take a passive or active approach to your investments. In short;

- If you prefer passive, go for a multi-asset fund like Vanguard LifeStrategy or L&G Multi-Asset fund.

- If you prefer active, go for a handful of Investment Trusts that cover the various geographical zones (UK, Europe, US, Japan, Emerging Markets etc).

- Or a mixture of the above two as you wish.

parking_question_chap

TheLondoner wrote: »

hi guys,

What kind of investments are low risk and offer fairly good returns?

Scams is the answer to your question.

Low risk will generally give you low return.

High risk, could potentially give you large returns.

JohnRo

TheLondoner wrote: »

I'm also reading a book about trading shares. Is this an option worth considering if I have some disposable income?

Don't bother looking for stock market short cuts to riches. Sure, you might get lucky but you might not and the chances are you'll be on a hiding to nothing.

Much better if you just decide on and then stick to a sensible collective investment strategy, until you've enough capital to cover your retirement needs. Assuming that's your reason for wanting to invest.

If you're just looking for a get rich quick scheme then be very careful because the chances are it won't end well.

parking_question_chap

I guess premium bonds could be something for you.

Money is pretty much 100% safe and you have the chance of hitting a big prize.

JohnRo

You've more than a 15,000 times greater chance of winning the national lottery jackpot with a £2 ticket than a premium bond hitting the £1M jackpot.

Also don't forget that the UK pound has lost well over 90% of it's buying power in the last 40 years.

Pincher

I would like to think there are 10million people all suffering from low interest rates. They are all desperate to pay a pretty penny to get to a heavenly high yielding paradise, a bit like these migrants in Turkey for Europe.

If they all read in the money sections, that passive is low cost, and is good for you, like spinach. ten million people start pumping their money into trackers. Passive means the fund managers simply pay whatever the price is for the shares. The more they pile in, the higher the FTSE, and the more eager they jump in, like lemmings.

Eventually, there is no more money coming in, and the FTSE stalls.
So people start selling, but there is no one to buy. Prices start spiralling downwards, and people panic sell.

It works like a Ponzi scheme, even though there is no one guilty of defrauding anyone.

So, if you feel lucky, we are in an up phase. It's just how many of the 10 million are already in there before you, and how many lemmings are behind you.

poiuytrewq10

I was in a similar boat to you not long ago and someone posted a link which I found incredibly useful:

http://monevator.com/category/investing/

It's a great site which I found very interesting.

I now have an ISA with Charles Stanley Direct which is ticking along nicely and invest extra in to every couple of months.

Ultimately, you need to decide what level of risk you want and what you choose to invest in.

TheLondoner

anyone used ratesetter or another peer to peer lending website? Sounds too good to be true reading some of the stuff I have about no one losing money yet...

Malthusian

JohnRo wrote: »

You've more than a 15,000 times greater chance of winning the national lottery jackpot with a £2 ticket than a premium bond hitting the £1M jackpot.

That's because if you don't win the jackpot on the National Lottery your £2 is down the toilet, whereas the Premium Bond is still there.

On average you have an infinity times greater chance of "winning" £1 million by buying £2 in Premium Bonds every week than buying a £2 lottery ticket. If you bought £2 in Premium Bonds every week, on average it will take you 386 years to amass £1 million in Premium Bonds, assuming an average return from the prize fund.

With the National Lottery, on average you would have to buy a £2 ticket every week for 17,500 years before your winnings totalled £1 million (this includes the 3 numbers, 4 numbers, bonus ball prizes, etc). However, by the time you'd won £1 million you would have spent £1.8 million on lottery tickets, so a fat lot of good your patience has done you.