Best way to start investing regularly

NottinghamKnight

Albermarle said:

thor said:

Alex, I am well aware about the effects of inflation on savings, it's just that I don't regard past performance(even hundreds of years) as being any indicator of the future for shares. Look at banks for example. Before 2007 did anyone seriously think that they would tank so spectacularly? This is why I regard investing as a gamble and I don't expect anyone to be able to say hand on heart that stocks and shares will 100% be able to out perform cash even with inflation taken in to account. Having said that I am willing to risk 200 quid a month as I can afford to lose it and will read up on the suggestions offered. Thanks.

The whole of the personal investment/pensions sector is based on the hope that long term growth above inflation/ cash savings rates  is a given.
All the regular posters on here will sincerely  hope you are wrong in your extremely pessimistic outlook .

I think it's expectation rather than hope given the probability of better returns over moderate to long time periods. 

Another_Saver

grumiofoundation said:

Another_Saver said:

Extremely risk averse investing is an oxymoron.

Is it?

Does that not depend on what is meant by 'risk'.
As is often stated on these forums (and by yourself below) holding cash is a 'risk' since over the long term cash will lose money to inflation and stocks are likely to beat/keep inflation?

Over the long term, stocks - or rather a diverse portfolio of stocks, ideally an index fund but that's just me being on the index side of the index/selective debate (or active passive) - are the only investable asset that we know can beat inflation over the long term.

Ah semantics, bringing people together since the 6th century BC

DiggerUK

thor, do you have a mortgage or other large debts. If so then paying those debts off should be prioritised. Saving for the future is easier without having to service debts with interest payments..._

barnstar2077

The sensation of clearing a mortgage does not always make it financially the right thing to do.  Most people have sub 2% rates at the moment after all.  Everyones situation is different, but bad debt, like credit cards, are normally the priority, followed by pensions and other investments.  It really depends on how unwieldy the mortgage is, and how reliable peoples wages are.  If neither of those are an issue then why prioritise a debt that will cost you lost opportunity to pay off quickly. 

thor

DiggerUK said:

thor, do you have a mortgage or other large debts. If so then paying those debts off should be prioritised. Saving for the future is easier without having to service debts with interest payments..._

I almost wish I did have debts as governments have prioritised borrowers over savers when it comes to who they want to help kick start the economy through retail spending (and it was not working even before the pandemic).

I have no mortgage or loans.

thor

I understand the widespread belief that over the long run investing is a better bet than saving but as you all will have recognised by now I'm a glass half empty guy so can't help thinking it is a bet only which is why I still regard shares as a gamble. Even in this thread, when it comes to their performance you hear words like probably, likely, etc which indicates that nothing is a dead cert. Over the last one or two hundred years investing may have beaten inflation but who is to say thet the reverse won't be true for the next couple of centuries?

Of course I don't expect that but I can't rule it out either.

Anyway after having read a couple of guides, I'm leaning towards opening a stocks and shares isa via nutmeg and choosing one of their safer rated options. I'll start with 500 quid and then put in £200 monthly afterwards. I have also noticed that quidco have a £60 cashback for them as well so might as well take advantage of that. Every little helps.

Alexland

We use words such as 'likely' to be honest it's not certain but extremely probable that over the long term you will do better with a balanced or adventurous asset allocation than cash interest rates. This seems less likely if you go low risk and end up with a high bond allocation. Bonds might not even return enough to pay those high Nutmeg ongoing charges.
Not much in life is certain - will the sun rise tomorrow? Will we all be sucked into a massive sinkhole? Will the cashback payout? Who knows - we can only base our plans on things that are highly likely to happen.
There are lots of good ways to get into a swimming pool but sitting on the side getting cold dangling a toe in doesn't achieve the objective. There isn't much point paying high fees for a low long term return. You might as well keep the money in cash savings.

[Deleted User]

I have had a long view about shares, same as you thor, my cash was recycled through regular savers paying 2-3% over the last couple of years. When I did a free review with an IFA of my pension, she suggested a regular savings investment of the same amount as you as it happens, my S&S ISA was changed from profile 6 to 7 at the start of March iirc given everything was tanking, it's currently up about £1800 (something around 19-20%). Even when the markets were at the lowest, I was only down about -5%. This is around 2 years investing I think. It is a long term plan and I still have money earning a pittance in savers but I am already happy that I could close the account tomorrow and still make a significant profit after the IFA initial setup charge. I plan to leave the money there probably for 5+ years so it'll no doubt see more ups and downs - I tend to check it periodically and if it is up, it's up and down it's down but it's generally been + balance for the most time and has been "profitable" (for want of better word) for most of that time.

Eco_Miser

thor said:

 Over the last one or two hundred years investing may have beaten inflation but who is to say thet the reverse won't be true for the next couple of centuries?

Given that most investing is owning a share of many profitable businesses, and that profitable businesses increase their prices and profits in line with inflation, the possibility of not keeping up with inflation over a couple of centuries would require the majority of businesses owned to stop being profitable.

If that were to happen, interest rates would also be below inflation as everyone sold the unprofitable businesses and flocked to cash.

Really, it's heads you win, tails everyone loses.

NottinghamKnight

thor said:

I understand the widespread belief that over the long run investing is a better bet than saving but as you all will have recognised by now I'm a glass half empty guy so can't help thinking it is a bet only which is why I still regard shares as a gamble. Even in this thread, when it comes to their performance you hear words like probably, likely, etc which indicates that nothing is a dead cert. Over the last one or two hundred years investing may have beaten inflation but who is to say thet the reverse won't be true for the next couple of centuries?

Of course I don't expect that but I can't rule it out either.

Anyway after having read a couple of guides, I'm leaning towards opening a stocks and shares isa via nutmeg and choosing one of their safer rated options. I'll start with 500 quid and then put in £200 monthly afterwards. I have also noticed that quidco have a £60 cashback for them as well so might as well take advantage of that. Every little helps.

Well if inflation has beaten investments over the next two hundred, or even one hundred, years you can come back and complain.
One way of viewing this is that the rich and powerful, including most politicians, will have much of their wealth in investments so there is a self interest in ensuring these succeed, let alone the arguments around growth, employment, innovation etc
Individual shares can be very volatile and risky but funds invested over thousands of companies are likely to grow for the reasons above.