New Investor - Starting up

VirtuousPv_31

Hi Y'all,

I'm a newbie, can you please advise on where and how to start saving and investing. I've been reading a lot of the info on this forum as well as the internet with regards to shares dealing and SharesISAs.

An advisor asked me to start from setting up a mutual funds account, because I'm inexperienced but I dont just want to go into that without considering other options. I'm interested in Shares Dealing and having a Shares ISA account. I have checked out a few online dealing companies eg Fidelity.co.uk, hargreaves lansdown and a few others.

I'm am seeking to invest on both long term (5 years and beyond) and short term basis ( 1-5 years significant returns)

Aegis

The first thing to consider is that share dealing is a lot riskier than buying in to collective investments in the same sector. This may seem like a huge generalisation, but it actually turns out to be quite accurate. The reason is fairly simple: with shares you are directly holding on to usually a small number of companies, while each collective investment you buy in to will expose you to between 30 and 150 companies on average. What this means is that if a company you're holding has a bad year, the diversity of the collective investment will smooth over that loss. The flipside is that it will also smooth over the gains if one company does particularly well.

If you plan to get involved in shares, make sure you understand why you are investing in the company, that you agree with the board's attitude and long term strategies, and that you understand the various financial figures that you can read about online.

dunstonh

An advisor asked me to start from setting up a mutual funds account, because I'm inexperienced but I dont just want to go into that without considering other options. I'm interested in Shares Dealing and having a Shares ISA account. I have checked out a few online dealing companies eg Fidelity.co.uk, hargreaves lansdown and a few others.

There is a little conflict in there. The adviser has recommended investment funds which are more realistic for the inexperienced investor but you now want to look at share dealing which is higher risk.

There are pros and cons to choosing shares over funds or vice versa. However, you need to consider whether you have the knowledge, time and inclination to do all the research yourself. If you have and you enjoy it then go for it but if not, then it could be a big mistake.

cloud_dog

VirtuousPv_31 wrote: »

Hi Y'all,

I'm a newbie, can you please advise on where and how to start saving and investing. I've been reading a lot of the info on this forum as well as the internet with regards to shares dealing and SharesISAs.

Stick with investing in funds. Depending on the money side of things I would suggest starting with a monthly drip feed of monies in to a number of funds.

I would also suggest, if you are keen to manage your investments, that you follow how your funds perform and try to identify why a fund price may go up or down, so as to gain more expereince in what factors affect investments; thereby gaining knowledge. I would let these investments run for a long(ish) period of time.

Again, as time goes on you can start to use some of the good research websites (Trustnet for example) to review how your investments are performing against similar investments. You could then review how swapping investments may help or hinder your portfolio growth.

Thirdly, set up an imaginery portfolio and acutally carryout pretend trades. I use https://www.iii.co.uk as it allows me to run a number of portfolio's, i.e. real, resource watchlist, watchlist, pension, funds). When I add a stock to my watchlist I just add 1 share to the portfolio as it is the share price percentage increase / decrease you are interested in, then make a note of the increase / decrease as you trade in / out of a share.

Whilst I have been investing for more years than I care to remember now I still use this process. I wanted to get in to spread betting / CFD trading (trading on margin - very risky) and basically 'paper' traded for 12 months before actually using money. When I did start trading CFD's I only allocated £500 to account and only invested at a £1 a point so as to limit downside.

I suppose all of this adds up to, there is nothing like experience when investing.

cloud_dog