Our top 10 tips on where to start as a new investor


#1

The first stop for new investors is often their local Bank/Building Society Saver account, however as they deliver a pittance, investors need to look
[See the full post at: Our top 10 tips on where to start as a new investor]


#2

It’s hard to believe that Scottish Widows chart, I mean turning £100 in to £155,000 just by investing in the index. Maybe it’s an advert from index tracker funds though.

Like the top 10, good advice me thinks.


#3

Point 6 regarding pensions being good for you is so right. A lot of my friends think pensions are rubbish and are a rip off. It’s really hard to get through to them about the benefits of pensions.

If you doubt the value of them then read point 6 again!


#4

I’ve read something about investment trusts in the Mail and maybe online but to be really honest I don’t know much about them. To me it seems like someone has just invented some new way to save but it turns out they’ve been around for ages.

I only found this site and this article on the Martin lewis website.

So I’ve read this and I’m a bit more informed but I don’t know where to start.

My problem is I had an accident and I can’t do my job anymore. I do have a lot of savings but my Cash ISAS just don’t earn enough. I’m frightened frankly of the stock market because it seems like a cowboy casino to me but then I read you can make more money.

How? When I watch the news they’re always saying the market has gone down so much and billions have been lost. How do you people do it or are you all just gamblers???


#5

@Langdon I’m fairly new to investing as well. I was and still am a bit scared of the stock market but my cash ISAs just weren’t making me enough money. I use the Martin lewis site as well and that lead me on to this site.

Basically what I’ve learned is that investing in an investment trust is more risky than cash but less risky than buying a share in BP or something. And that if you can leave your money investing for many years it is less risky because the stock market eventually goes up.

I’ve only bought less risky funds though like City of London investment trust, Scottish investment Trust, Diverse Income, Finsbury Growth and Income.

They all pay dividends and some like City of London and Scottish Investment Trust have between 30 and 35 year records of increasing the dividend every year.

As I’m sure you can gather, I’m no investment expert but I am please with how I’m doing so far.


#6

Another aspect of pensions that is often ignored is that although the income taken is taxable, the individual’s personal allowance can be offset against it. So it is possible for some - if not all - of the pension income, in effect, to be taken gross (the tax deducted would need to be reclaimed from HMRC if it couldn’t be paid gross). So tax benefits on the way in, and (potentially) tax benefits on the way out. Could be of interest to someone who retires before they are able to take their state pension - which would use up someof the personal allowance itself.

+++

Re. investing in stockmarkets.

If an investor has 90% of their assets in cash and 10% in the stock market, and the market falls by 20%, then the overall effect on the investor is that their total assets fall by just 2%. What the investor has to decide is just how comfortable they will be when markets do fall - and fall they will at some stage.

Someone that might get worried by a 20% fall might be more comfortable with that 90/10 split. Somebody else that can accept these gyrations and has a sufficiently long timescale is likely to hold more in the way of equities (and/or bonds, property, etc…). Basically, there isn’t a single right answer to asset allocation, and it is up to each individual to find their own level of comfort.


#7

I didn’t know you can set off the tax you pay on dividends against your income tax @arkwelder. How would you find out how much tax on dividends you pay? Or do you need to be in a SIPP for this to work, which I am, but I still have an old Scottish Life plan.

 


#8

@LettsDoIt, my comments are specific to the income that the individual receives from their pension. How the income is generated within the pension is irrelevant - be it from shares, bonds, IT’s cash etc - all income that the investor takes out of the pension is taxed at their marginal rate of tax, so a basic rate taxpayer will have 20% tax deducted and they will receive the net amount (my caveat being that there might be cases where the gross pension can be taken - I’m not sure enough to be able to state categorically either way).

But if the investor has not used up all of their personal tax allowance then any tax that has been deducted from their payments (up to that allowance) can be reclaimed, bringing the income back up to the gross amount.


#9

I use a few different websites to look and discuss planning my finances but I forgot about this one.

I think I’m ready to invest some of my savings in investment trusts but keep most of my money in cash.

Mr Ark Welder’s suggestion makes sense to me about keeping some in cash and investing what I feel comfortable with.

I have some morey from selling my house and moving to a smaller and more suitable one and from my savings.

I have £100,000 that I’m thinking of investing, now where to put it, any suggestions?

So far I like Scottish Oriental Smaller Companies.


#10

Langdon if you are replying to someone on here write their name like a twitter name and they’ll be informed you’ve mentioned them. So @arkwelder should do the trick whereas Mr Ark Welder will not.

You haven’t quite given us enough information to respond to you. Have you looked at the Investor Clinic section of this website? If you go via that route they’ll ask you to provide more information and you’ll get a better response I think.

 


#11

Ok thanks for the suggestion @samsmith I will do that.