Top Tips For Beginners?

Hi All.

I started investing in December and so far I’m up so not too bad.

I’m depositing £100 per week sometimes £50 and topping on the holdings I think will go well, I’m mainly looking at longer term holdings but also have done some day trading just to take a quick profit and the move on or add to my current portfolio.

I would like to know from the more experienced investors what you did whe kb first starting and what you would do now or differently?

As a beginner is it a good idea to stay safe, go with the bigger companies and wait for that rise and when happy with your profits take it etc? Or look lower down and hope they rise a little more significantly?

I’ve not purchased into any ETF yet or anything with dividends, should I be doing this?

Thanks everyone.

Liam

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My personal advice is buy a low cost global ETF and invest over the long term. Keep some money aside to buy some individual stocks to test your stock picking (small amount).

Everyone has a different strategy. If you want an income then dividends might suit you. But I mainly invest for growth so don’t specifically seek out Distributing funds.

I don’t buy bonds, but if you want to limit your exposure to equities you could consider a bond fund and even some corporate bonds.

I personally like a guy called Lars Kroijer. Have a look at his website. He has 5 short videos to watch. See what you think. https://www.kroijer.com/

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first thing to do is assess your risk tolerance and goals.

how comfortable are you with seeing your portfolio go up and down in value? how will you decide when to get out of a stock/ETF that is not performing well and losing you money?

stocks as a whole are riskier than ETFs however you have more control over them and can choose specific companies you know rather than just blindly buying a chunk of the whole market.

on the whole, for long term investors, dividend paying companies perform better than non-payers that can only get you returns when you sell. for those with little risk tolerance or time, ETFs will offer a stable growth and source of income.

using my own portfolio as an example, I have put just over 50% of my portfolio into purchasing GSK shares. from what I can tell the business is solid, it has global reach, it has a very large market cap and share liquidity, additionally it is currently at the low-price end of its spectrum so the dividend returns are roughly 5.6% annually which would be paid out in part every quarter (3 months). it is also a rather stable stock with a low volatility beta which makes it less worrisome to invest. I plan to hold these shares until the price is at least £16 per share, collecting the dividends along the way. this means I can leave those shares alone and just check up every now and then.

when people tell you to diversify, the important part is to not have all your funds in 1 basket, get a few different shares across the industries you are familiar, this will reduce your risk profile and opens up the potential that while 1 of your positions is doing poorly due to the market influence, another position may be doing well and reduces the volatility in your portfolio.

as a beginner, I recommend getting no more than a handful of shares, either stocks or ETFs as you will want to be very familiar with them and have an easier time assessing your options. keep educating yourself in how the market works and research as much news and financials as you can for the companies or funds you decide to invest with. being on top of the news and fundamentals will be your best shot at securing your profits or getting out before a major loss that can take months to recover.

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Just editing my video on how to get started. Remind me to send it to you in a few days time if I forget.

(Thanks for pointing out my mistakes @Lenos1980 :woozy_face:)

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@cavanhagan Few too many drinks today?

Are you starting mate? :woozy_face::triumph:

Safety first should be your number one goal. It’s your money so only you will know how painful it is to lose it! There is no single way to achieve your goals, but you will need to decide for yourself what strategy you want to follow and stick with it. Everyone has different risk tolerance levels and everyone’s circumstances are different. So what works for one might not necessarily work for you. There are core principles that apply to everyone though like never risk what you can’t afford to lose. I started my journey a little over a year ago and I have been putting a few systems through the tests. I have tried both day trading and investing and I have personally come to the conclusion that I can succeed at both, but for now investing yields far greater results. To successfully day trade you need a lot of capital and it is not worth using leverage. Investing you can start with as little as a £1 and still win.

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The edit button is a wonderful tool

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You’re going to beat me to it :wink:, I have just recorded a getting started video today but won’t get time to edit it until Monday night!

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Don’t think it’s been mentioned yet but before you start investing, make sure you have three to six months’ worth of earnings set aside in an emergency fund. That way, if you lose your job, your boiler breaks etc you’re not forced to sell your investments at a potential loss.

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Thank you everyone for your responses. All really helpful :+1:t2:.

I have one more question, this is very personal so don’t feel like you have to answer.

When you first started, what was your initial investment?

And… what do you think is a minimum investment needed to start ideally?

That’s impossible to answer because nobody knows your financial situation. I invested £300 per month into my global ETF fund when I first started investing. I was putting a similar amount into cash savings.

My financial position is different now so I have adjusted how much I invest and where. I put a lot into wisealpha corporate bonds to give a bit of fixed income exposure to my overall investments in addition to my global fund.

I don’t favour a single large investment, particularly when markets are high.

Remember only invest what you are prepared (and can afford) to lose.

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Personally I think the answer is ‘anything’. Your percentage gains will be the same whether you invest 100 pounds or 10000 pounds. Again this is personally speaking, but I think somewhere in the region of 1 to 2k is a large enough amount to get you a diversified portfolio and to be excited about the gains you hopefully make.

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Whatever you’re comfortable with in your own circumstances. I started with £50 and I invest £100 a month (well I haven’t put anything in for months now because I’m struggling with cash)

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It is always a good idea to start small as a beginner. The one thing that will do more harm than good is your emotions! The markets go through cycles and you are not going to feel the same during different stages. I started with a £100 just to get a feel of things and then quickly increased to just over a thousand. That was before 2020 rolled in and I was on top of the world because my portfolio was up 22%. Then March came and my portfolio was down almost 50%! If I had put in more money to begin with I guarantee you that I would have had a heart attack! You can imagine the emotional roller coaster I was going through at the time. Then April came and the markets started recovering and because of the emotional storm I had just been through I sold off my investments as soon as my portfolio was back into the green by about 15% again and that is a decdison I now regret given how much the markets bounced back by the end of the year. If I had only managed my emotions my portfolio would have been up almost 10000% and this is not a typo :sweat_smile:. So until you have been through a few different emotions and experienced how they affect you and your decision making then start small and only with money you can afford to leave invested in the market no matter what. If you stay invested in the long term you will definitely win!
Now I know my strengths and weaknesses I have increased my investment to at least £500 a month.

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Wow that return would of been amazing. Thank you for the insight

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Sharing resources for your personal Portfolio Management affair. GL

Stock Market Bible

Books for Every Kind of Investor

Course: Principles of Wealth Management

I remembered :+1:

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@Slater7 thanks for asking the question. I have also started in mid-December. I appreciate the answers our fellow trading212 community has shared generously. As a nobi I don’t have a lot to add except the fact that markets go in cycles as mentioned, 2020 and 2021 until now are bullish which means (at least for me) if you are going to invest and take profit it is better to do it now.
But keep an eye on the news as soon as the market starts to head in the wrong direction take your money out.
This is a personal opinion that may or may not fit your lifestyle and the free time you could allocate for the markets

Take your money out? Surely with the currency depreciation we are undergoing this would be the single most worst thing you could do.

Transfer to safer funds with less volatility but not to cash

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