Investment for beginners

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Many savers fed up with risible rates of return on their cash are being tempted to invest in stock markets instead. Our beginners’ guide explains what taking a punt on shares really means for your money, what and where to buy, and how much risk to take.

Investing for beginners:

What is an investment?

• Shares
• Bonds
• Funds
• Government bonds (gilts)
• UK property market

• Farmland
• Vintage cars
• Wine
• Fledgling technology firms
• Art, eg, paintings, sculptures

For most, investing means putting money in the stock market

How do stock markets work?

Why does a company share price rise and fall?

What kind of growth can I expect from investing?

Sector investing in…

Over one year

Over five years

Over 10 years

UK income shares

19%

85%

75%

UK company bonds

8%

40%

76%

US stock markets

31%

128%

160%

China

48%

96%

152%

European countries (but not the UK)

32%

122%

13%

Asia (incl Japan)

37%

94%

113%

A mix of global stock markets

30%

96%

98%

ALWAYS remember the five golden rules of investing:

Is investing right for me?

How much should I set aside to put in?

How do I invest?

What is a share?

What is a fund?

Investing in an ISA should ALWAYS be your first port of call

How do I research what to invest in?

• 
  Hargreaves Lansdown*
  
  

  
  It has a helpful and easy-to-navigate website jam-packed with free information about funds – and you can make the most of this whether you sign up to buy funds or not.

• 
  Interactive Investor
  
  

  
  Interactive Investor has a wide range of information, including
  
  beginners’ guides
  
  on a range of investments and a glossary of terms you might come across while you’re researching investments.

• 
  Bestinvest
  
  

  
  Bestinvest’s research team looks at more than 85,000 funds and compiles research on a monthly basis.

• 
  Charles Stanley Direct*
  
  

  
  The market data section of this website breaks down lists of FTSE companies and allows you to check performance for any time period from one day to three years.

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