New to investing? Our guide to getting started

Author: Amaraj Flora

Senior Portfolio Assistant & Investment Committee Support

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The saying goes that the ‘best time to start investing was yesterday, and the second best time is today’.

Many people save their hard-earned cash in a bank, savings account or cash ISA.  While this can be a sensible option, due to a combination of historically low interest rates and inflation, the money in your savings account is slowly but surely losing value.

If the rate of inflation is higher than the interest rate on your savings account, you are definitely losing money, and you might want to consider a different way to make your money grow.

Investing some of your cash into stocks and shares could help to protect and grow your money.

How do I start investing?

If you are new to investing it can feel quite daunting, however there are simple but effective ways in which you can start your investing journey.

You can start investing from as little as £25 each month or you may have a lump-sum of cash to invest. Either way, it is important to understand that markets go up and down and taking a long-term approach is key, both for your peace of mind and strategy.

When is the best time to start investing?

The earlier you start investing, the greater your potential to grow your money significantly over the longer-term.  By investing regular smaller amounts, you can take advantage of ‘pound-cost averaging’.

Pound-cost averaging means that you invest a regular amount, no matter what state the markets are in, so you could be invested at a low point or a high point.  However, because your investments are buying over a long-period, this averages out the volatility in markets.  This is opposed to investing a lump sum where you could end up buying in at a high point only.

Regularly investing small amounts of money, letting any increases build upon themselves, and not touching it for the long-term takes patience – but the results could really pay off.

Types of Investing

When we talk about investing, stocks and shares are the first thing that come to mind. However, you can invest in many different things, for example: commodities, bonds  and investment funds.

When you are new to the world of investing, it may be sensible to have diversification which can be gained by investing through investment or collective funds such as unit trusts, Open-Ended Investment Companies (OEICs) or investment trusts.  These types of investments pool your money with other investors which is then invested by a professional fund manager into a spread of stocks and shares, giving you diverse exposure to a greater number of holdings than you would achieve individually.

Active or Passive

Investment funds can be either actively or passively managed.

Actively managed funds have people hand picking stocks, bonds or other securities, and managing the performance of the funds.

A passively managed fund is an investment fund that tracks a specific industry or a certain market index.

Risk Level

Risk is an inevitable part of investing.  Different funds and stocks have different levels of risk.  As a rule of thumb, stocks and shares offer higher risk than bonds,  You can choose the level of risk you are willing to take.

In principle, the longer you have to invest, the more risk you can afford to take.  If you have short-term needs for your money, stocks and shares investing is probably not right for you.


Diversification is key to becoming a successful long-term investor.  When diversifying your risk, you spread out your capital among different investments,  by having exposure to different types of securities across different sectors, investments and countries.  Investment funds can give you this diversification.

How do I know what to invest in?

Knowing where to invest your money can be confusing.  You may already know which company, shares or stocks you want to invest in or be open-minded to opportunities.

While there are potential risks to investing, those that seek professional advice and invest their savings wisely are reaping the benefits.

Contact us at or call on 01223 233331 for advice on your investment portfolios.

Opinions constitute our judgment as of this date and are subject to change without warning.  The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.

The information in this article is not intended as an offer or solicitation to buy or sell securities or any other investment, nor does it constitute a personal recommendation.

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