Top tips for newbie investors

Top tips for newbie investors

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I am so happy that you are considering entering the world of investing.  Honestly, it is the best path to build wealth and reach financial freedom.

 

But I understand that it can feel intimidating.  Media portrays it as world run by white men in suits that shout jargon at each other.  It is not like that.  I promise.

 

Once you make your first steps it will all make much more sense.  To help you make that step, I’ve put together my top tips.  Enjoy!

 

Go for the long term

The stock market can be volatile.  In the short term.  That is why I will always be investing for the long term.

 

Over the long term, this volatility levels out and what you get is a positive trend.  Therefore, I aim to invest for at least 10 years or more.

Use a Stocks & Shares ISAs

In the UK, you can apply for a stocks and shares ISA, which means that you can invest £20,000 a year and any returns on that investment will be tax-free.

 

This can make a big difference to the profitability of your investments, therefore I urge you to look into the S&S shares ISA before looking at other investment options.

 

Lots of financial institutions other this type of ISA, so you won’t be stuck for options but look at their fees as this can hurt your returns too.

 

Think diversification

It is like that old saying “don’t put all your eggs in one basket”.  If you put all your money in one type of investment, in one business, in one country or whatever, this far riskier than spreading it out all over the place.

 

You should try to invest in a range of different companies of different sizes operating in different fields in different countries.  This means that you might need to invest in a variety of places to build a truly diversified portfolio.

 

Look into tracker funds

For me, the easiest and least risky options for new investors are tracker funds.  They basically reflect large cross-sections of the market and you will invest in them in the same proportions as each individual business takes up.

 

They are a cheap way to start investing as they have low fees and historically have produced good returns for investors.

Don’t be put off

The worse thing that you can do for your money is to not invest it.  Really you should have started investing 10 years ago.  I wish I had.

 

But as they say, the second-best time to start is now.  Even you decide that you want to start with £10 a month that is better than nothing.

 

As your confidence (and income) increases you can look at increasing the amount you invest and look at further diversifying your portfolio.  It really is not as scary as it looks.  I promise.

 

What are your concerns about starting investing?

What questions do you have?  What worries you about making that first step?  Leave your comment below and I will answer as many questions as I can.

Disclaimer:  Remember the information you read here does not represent advice.  Any ideas or suggestions are just that and may not work for you.  Read the full disclaimer here.


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This Post Has 3 Comments

  1. Windy

    This is great. I started investing this year using Robinhood and I’m in it for the long run

  2. Surabhi

    I suck at investment. These tips will definitely help. Thanks for sharing

  3. supal

    These are great tips! I’m actually starting an angel fund and find this incredibly useful, especially the don’t be put off tip!

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