New to shares and the stock market

Ojb

Hi all I'm 37 with about 85k equity in property and 45k in the bank. I don't have any private pensions. I have paid the max off the mortgage without getting a penalty until next year. I am looking to invest the 45k or at least half of it into the stock market.
I am new to it all but it looks like the best place to go as savings account and premium bonds offer low returns.
Another property was an idea but sdlt as well as having all my money in one asset class had put me off that.
I have a few ideas of companies / sectors I would like to invest in, but after some research a lot of advice tells me that low cost global index funds are the best choice and buying individual shares rarely beats the index funds. Is this correct?
If so it makes it rather boring for me as I quite liked the idea of learning about different investments and buying and selling as I go along.
As I'm new to this would any books be worth reading?
I was thinking of starting with 20k using my s&s ISA allowance.
Thanks for any help.

AnotherJoe

What pensions do you have. Why not invest within a pension?

Ojb

I want to be in control of what I invest it and be able to buy and sell as i please. I feel like pension is out of my hands

dividendhero

Ojb wrote: »

I want to be in control of what I invest it and be able to buy and sell as i please. I feel like pension is out of my hands

A SIPP will be very much in your hands

Also regarding the mortgage - have you considered an offset mortgage?

bd10

Hi,

there is empirical evidence that actively managed funds tend to underperform market indices(on average, but there are outperformers as well.). So, I see where you're coming from in terms of ETFs.
As for books, I'd stay away from any title suggesting becoming a millionaire in five easy years. Ain't gonna happen, they are a waste of time. A classic for me would be Jack Schwager's series of interview with traders. That may give you some perspective on different approaches to investing and trading. Otherwise, what I do is to drill down in the details of a fund etc. I am interested in: holdings, past performance vs. peers, drawdowns/risk, etc. Each issuer has a prospectus on file to download.
Learn about different asset classes and how they perform over time: large/mid-cap, developed vs emerging markets, tech/consumer stocks, commodities etc. etc. The list is endless.
Firms like Hargreaves also show their model portfolios for different levels of risk appetite. That may be another starting point to get some ideas how construct your portfolio.
Lastly, don't forget to diversify. Easy to pick 5 funds that turn out to be highly correlated as they more or less hold the same underlyings. Same goes for ETFs.
Enjoy your studies, it's great fun!

AnotherJoe

Ojb wrote: »

I want to be in control of what I invest it and be able to buy and sell as i please. I feel like pension is out of my hands

You mean, just like you can do in a SIPP ?

If you feel a pension is "out of your hands" you are very misinformed. Perhaps your employers is. But nothing stopping you having a personal, Self Invested Pension Plan

Ojb

Thanks for the posts, will look into your suggestions bd. What's the difference between putting 20k tax free in a s&s ISA than in a sipp? How do you go about opening an sipp?

OldMusicGuy

Read this book by John Edwards: DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning.

Once you have read that, then read Investing Demystified by Lars Kroijer and DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing, also by John Edwards.

Then look at websites like Monevator.com for some ideas.

AnotherJoe

Ojb wrote: »

Thanks for the posts, will look into your suggestions bd. What's the difference between putting 20k tax free in a s&s ISA than in a sipp?

Put £20k in an ISA, you've got £20k in an ISA.

Put £16k in a SIPP (subject to various earnings limits on what you can put in) and you'll have £20k in that SIPP (once the tax relief is added on assuming you are standard rate taxpayer).
When you take it out, you get £20k back out of the ISA (same as you put in) and anywhere from £20k to £17k out of the SIPP depending on your tax position.
(obviously ignoring any investment growth or decrease)

Ojb wrote: »

How do you go about opening an sipp?

The same way as you go about opening an ISA, fill some forms in.

Patrol

Bear in mind you can access the 20k ISA anytime e.g. if you need the cash for a property, family, etc. Access to a SIPP would be from age 55 onwards. One is more or less instant, the other geared towards retirement provision.

Ojb

Great advice that's another reason I've never put into a pension due to being locked away. I forgot to say that.
I think I'm happy to do the s&s ISA thing and put the max in each year.
Researching funds sounds interesting.
As an example let's say I want to invest in companies who research and produce batteries , is there any easy way to do that? I believe things are going electric and would be happy to invest in this area , as well as a few others to diversify. Is that possible?