Learning about Stocks & Shares

Cptralls

Hi All, 

I'm reasonably good with managing my finances (always room for improvement), however, I know little to nothing about S&S's. My 2021 resolution has been to learn about S&S's and I have a few weeks off work, where do I start? I'm also keen to dip my toe into the pool so I'm eager to know how to do this.

Any information and guidance would be gratefully received. 

eskbanker

There are plenty of similar threads on this board - I usually point newbie investors towards sites such as:

https://www.moneyadviceservice.org.uk/en/articles/investing-beginners-guide

https://www.hl.co.uk/beginners-guides/investing

http://www.monevator.com

http://kroijer.com/

http://diyinvestoruk.blogspot.com/

https://www.ifa.com/indexfundsthemovie/

as well as highlighting a number of key points of principle:

1. Only consider investing once you have adequate accessible cash reserves.
   
2. Only invest if you're happy to commit for at least 5-7 years and preferably 10-15 or more.
   
3. Diversify - ignore individual shares, etc, and concentrate on collective investments that spread your eggs over many baskets. Global multi-asset funds are a good place to start, available from the likes of HSBC Global Strategy, Vanguard LifeStrategy, Blackrock MyMap and L&G Multi-Index.
   
4. Choose what you want to invest in before considering which platform to hold it/them on.
   
5. Keep an eye on ongoing costs for funds and platforms - they shouldn't be the primary consideration but can make a noticeable difference over the long term.
   
6. Use a Stocks & Shares ISA as a tax-efficient wrapper to avoid liability for income and capital gains tax.

Old_Lifer

There is never  a need to rush into investing.   If you spend some time reading about it first you are much more likely to be successful   than if you make a spur-of-the-moment  decision to invest in something that you may have heard of or read about but of which you know nothing.      Avoid individual shares and stick to funds. It  spreads the risk.

comment_as...

I prefer individual shares. They're easier to understand (most funds don't even tell you most of what they hold). They do concentrate risk and return, which works for me.
Start very small and learn as you go. You'll feel much more motivated to learn having even a very small amount on the line. Think of your first investment as a cost of learning and pick a suitable amount to pay.
There's no minimum time to hold shares, traders do it for literally hundredths of a second. When people say 10 years + what they mean is that it could take that long for value to out. You sell whenever the price is right, if that happens tomorrow then so much the better.
Browse forums like London South East and ADVFN. Bear in mind that people have an interest in talking up the price of shares they own. As you learn more you'll be able to make more use of company accounts and screening tools.

FirstTimeSolo

You can try Etoro virtual profile. It provides 100000USD to play with virtually. It is good practice. You can invest in shares or even copy one of the other investors based on their performance/portfolio. 

thickasabrick

Cptralls said:

Hi All, 

I'm reasonably good with managing my finances (always room for improvement), however, I know little to nothing about S&S's. My 2021 resolution has been to learn about S&S's and I have a few weeks off work, where do I start? I'm also keen to dip my toe into the pool so I'm eager to know how to do this.

Any information and guidance would be gratefully received. 

I wanted to encourage my children (adults) to understand the difference between saving and investing.
Went with the Simplicity Portfolio as described by the The Escape Artist and Lars Kroijer. There are a few others with similar objectives (JL Collins) but I liked the way the Escape Artist article was written.
Got them to sign up for a Stocks and Shares ISA and choose a single diversified low cost fund. 
That meant a S&S ISA  with Vanguard, selecting their "FTSE All-World UCITS ETF (VWRL)" and purchasing £100 of units per month (minimum investment required per month unless you deposit £500 up front).
Originally I encouraged them to purchase "FTSE All-World High Dividend Yield UCITS ETF (VHYL)" but after reviewing it a year in realised that  VWRL was a better fit for them.
The experience has been very worthwhile, they have seen some losses and some gains over the last two years. 
Also got them to create a net worth tracker and used the "Millionaire next door equation"  as a target which gives the whole exercise meaning that you can see and quantify.

Albermarle

As you have a few weeks here is another couple of links 
Investing for beginners: how to get started (moneysavingexpert.com)
Long-term investing: Increasing your chances of positive returns (nutmeg.com)
If you have a pension , it will already be invested in stocks and shares , if it is a Defined Contribution pension. So learning about investing will be of benefit with this as well. However if you have a defined Benefit/final salary pension ( mainly for public sector workers nowadays) then this is not relevant.

jimjames

comment_as... said:

I prefer individual shares. 
Start very small and learn as you go. 

I think these 2 statements go against each other really. Buying small amounts of individual shares really isn't a very good option as you'll be paying a high proportion of the value in fees and ideally would need to get at least 10 different shares to start to get some balance in your portfolio.
Personally I'd start with funds and then look at shares if you so wish at a later date when you have sufficient money built up. 

barnstar2077

I agree with jimjames and eskbanker, start with global funds in an S&S ISA, assuming your pension is in good order and you have some emergency cash in the bank.  Individual shares work out very well for some people, and there is nothing wrong with going that route, but they require more knowledge and time than most people have available.  I personally buy a Vanguard Lifestrategy fund on their own platform, and do plan on buying shares for fun once I have a solid financial backbone in place.

mrlegend123

my main investment strategy is to just move my money around the different asset sectors using momentum investing, holding one passive and one active fund. I don't do shares and just funds nowadays - less work and better returns. 

i have been burnt before by the hype for example Neil Woodward. I never follow the sheep now. Court time 

benbay001

comment_as... said:

I prefer individual shares. They're easier to understand (most funds don't even tell you most of what they hold). They do concentrate risk and return, which works for me.
Start very small and learn as you go. You'll feel much more motivated to learn having even a very small amount on the line. Think of your first investment as a cost of learning and pick a suitable amount to pay.
There's no minimum time to hold shares, traders do it for literally hundredths of a second. When people say 10 years + what they mean is that it could take that long for value to out. You sell whenever the price is right, if that happens tomorrow then so much the better.
Browse forums like London South East and ADVFN. Bear in mind that people have an interest in talking up the price of shares they own. As you learn more you'll be able to make more use of company accounts and screening tools.

Although i generally agree with you, i certainly wouldnt suggest starting on LSE or ADVFN.
If you are truly interesting in buying individual shares you cant go far wrong with "The Intelligent Investor" by Benjamin Graham.
(I only value invest, its all that makes sense to me)
Although it will take a very long time before you are in anyway ready to pick a stock in anyway more than a gamble.
If you dont think you want to commit considerable time to learning (totally understandable) then you cant go far wrong with index funds.
Whatever you do, dont buy "tips" that you read online.