Jump to content
House Price Crash Forum
fru-gal

How Does A Layperson Learn About Investing?

Recommended Posts

You guys all sound so knowledgeable about investing. If it is not your job, how did you get into investing (i.e. what books, websites would you recommend for a total layperson)? Also, I may have asked this question before, I have a terrible, terrible memory!.

Share this post


Link to post
Share on other sites

If it's shares you're considering, some of the share dealing websites let you set up a fantasy portfolio which is a novel way of seeing if you're a budding Gordon Gekko...

Share this post


Link to post
Share on other sites

If shares, it depends what you want out of it; whether you want to learn or do. I'm not going to comment on the former as I don't feel qualified to, though I quite regularly hear about things on here then go off and research them, which has been great.

For doing:

Monevator is great for the layperson, and if you like that I've got quite a few more links for you.

Smarter Investing: Simpler Decisions for Better Results by Tim Hale seems to be the default book recommendation for UK investors starting out.

Both these are very much about passive investing i.e. buying funds that invest in the stock market as a whole rather than individual shares. I'll leave Monevator to explain more about that...

I've only really got into investing in the stock market in the last year as it never occurred to me before that it was possible for me to do so. Now I'm going at it with some vigour as it appears to provide a real possibility that I could escape work well before NRA.

For some years now I've also dabbled with currency trading (not that I'd recommend it :ph34r:), only with very small amounts though. I've found that very informative in terms of how news affects markets in real time, and also the technical analysis side (patterns on charts) which I found BabyPips very helpful for. That's trading not investment though, but technical analysis also applies to the stock market.

I'm no expert but happy to share what I find!

Share this post


Link to post
Share on other sites

It is very surprising that you should start such a topic just after this one: "Wellesley & Co: A New Way to Invest in Property". Are you trying to tell us something? Do you want to confess? I, for one, will be missing your inquisitive posts should you join the enemy.

More seriously, I have a bit of money in a share ISA. If you don't know what you are doing you are probably better off leaving it to the so-called "experts" and invest in funds or, what I do, buy a few diversified low-cost trackers and or ETFs. It is more about minimising the costs rather than making a killer return. Each time I tried to be clever I made less money than I should have and lost against the market average. I cannot comment on the learning either, in case it was not already obvious I did not do enough of it. A few here may jump on me for this but I think a trader is about as useful and productive as a landlord for society so it would be a bit hypocritical for me to try to make a lot of money out of it.

Share this post


Link to post
Share on other sites

It is very surprising that you should start such a topic just after this one: "Wellesley & Co: A New Way to Invest in Property". Are you trying to tell us something? Do you want to confess? I, for one, will be missing your inquisitive posts should you join the enemy.

More seriously, I have a bit of money in a share ISA. If you don't know what you are doing you are probably better off leaving it to the so-called "experts" and invest in funds or, what I do, buy a few diversified low-cost trackers and or ETFs. It is more about minimising the costs rather than making a killer return. Each time I tried to be clever I made less money than I should have and lost against the market average. I cannot comment on the learning either, in case it was not already obvious I did not do enough of it. A few here may jump on me for this but I think a trader is about as useful and productive as a landlord for society so it would be a bit hypocritical for me to try to make a lot of money out of it.

Not at all. Still a dirty renter. I just want to make sure I have fingers in every pie, so as to hedge my bets. If I can do that without actually having to buy a property or BTL then all the better. I see it as benefiting from those that have priced me out of owning a home.

Share this post


Link to post
Share on other sites

http://www.fool.co.uk/investing/2014/06/25/retirement-advice-from-warren-buffett/

or for a bit more depth on specifically what to look at when valuing equities in general

"The Intelligent Investor" - Benjamin Graham (the man who taught Warren Buffet).

Or in very broad terms, the same basic rational for buying a house, buy during a recession/period of elevated unemployment/crash/crisis (i.e. when most people are selling) and sell/reduce exposure during prolonged booms/It's different this time/very tight labour markets/inverted yield curve (i.e. short policy rate > 10 year gov bond rate).

For example: - Buy equities in late 2008/early 2009. Buy a house in early 2009/10. Sell/reduce equity exposure when the above occur

Simples. (haha)

Share this post


Link to post
Share on other sites

I learned by doing and reading. Signed up with Hargreaves Lansdown (who were ahead of the pack - nowadays they're just one of many choices) and started investing. Made some profits, some losses, and the profits outweigh the losses by quite a lot so it's clearly been better than sitting on cash. Read lots of H-L articles in the early days, read one or two investment-chat websites (I still frequent the Motley Fool boards, though I think the editorial died when they disabled reader comments on articles).

If you don't want to think about it, you can put your hard-earned into managed funds. Take your pick according to where you fancy a flutter and what kind of flutter (e.g. income vs capital growth), invest your money, and let the manager take care of the details. Everyone's style and goals differ, and you want to consider where to invest (UK, developed world, emerging economies, global, ...), whether you care about ethics, how much do you stand to benefit from tax-efficient investments, are there any particular sectors you like, what level of risk can you live with, does liquidity matter to you, etc.

Share this post


Link to post
Share on other sites

I got into Shares 27 years ago in my mid - late teens during Thatchers privatisation boom. Relatively small sums. Upped the anty once I got to KSA where tax free income needed to find a home.

Share this post


Link to post
Share on other sites

Old thread I know but there's no substitute for getting your hands dirty.

In the first few years I spent 'investing' I was just trading blindly. I made some good decisons and more awful ones.

Lost about 25k - at the time that represented 25% of my net wealth.

I basically paid my tuition fees through hard experience. I haven't read any books, or watched any progs. Because it is undertaking yourself that is most important.

So it did not put me off. I understand a lot more, but still have plenty to learn. I don't really do technical analysis or fundamental in any formal sense, but I have come to learn how to manage risk and 'read' the market and have a feeling for what is 'cheap'. What news to ignore, what is just noise, and what should be acted on.

As i said, the key thing I have learnt is how *I* react, or rather should react to 'events'. If I buy something and it drops 10%, how does that make me feel? Do I stress about it. How about 20%, how about 80%?

Equally, how do I react when it goes well? Do I get excited and cash in? Or do I wait...

The fantasy portfolio idea wouldn't work for me...there is no substitute for having real stakes on the line and understanding your own psychology.

Get stuck in. It's fun.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   36 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.