How to invest when you really don’t have a clue!

How to invest when you really don’t have a clue!

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Investing can be a difficult game for even the most experienced of stock market traders. Not only do you have to spend a lot of time researching the market and specific shares, but you also have to try and account for unexpected political and financial events! For the Average Joe (or Jane), let’s face it, it’s all a little bit confusing. But what if you still want to get involved in the stock market to invest for your future? What if you still want to make your money work hard for you but you don’t have a clue where to start?

While I would still recommend that you do as much research as you can before you go ahead and invest, in this post we look at a couple of easy ways that you can start investing your cash today, even if you have very little knowledge when it comes to how to pick individual shares.

Investing With a Robo Advisor

The first option you might want to consider is to invest your money through a UK based robo advisor. How do robo advisors work? Robo advisors like Moneyfarm* offer online investment management for a very low fee when compared to the fees charged by typical wealth managers. This means that pretty much anyone can now have a fully managed investment portfolio, without having to invest a huge amount of money and without having to pay huge fees. Robo advisors start by asking you a few simple questions to assess your attitude to risk and then they will invest your cash in low-cost ETFs (Exchange traded funds) based upon your own personal risk profile. With Moneyfarm you can invest from just £1 and Moneyfarm also offer a Stocks and Shares ISA too, so you can enjoy the tax benefits of investing this way. For more information on how robo advisors work, take a few minutes to read our Moneyfarm review.

Investing in Funds

If you’re feeling a little braver and would like to have more of a hands on say over how your money is invested, but you still don’t have the confidence or have not yet learnt how to pick individual shares to invest in, then investing in funds via an online broker like Hargreaves Lansdown* may be a great place for you to start. There are thousands of funds available that you could invest in and each fund will have its own fund manager. Each fund tends to focus on a certain sector of the market and you can easily view their past performance. This means that you may have a fund which focuses purely on european equities, or one that focuses more on emerging markets. You could also have a fund that specialises in property investment or one that focuses on ethical investments instead. So, if you have a hunch that a certain sector of the market might perform well but you want to spread your risk across a range of investments in this sector in a cost-effective way, then fund investing could be a great way for you to do this. You can download a free guide to investing in funds here*.

So there we have it, two simple ways that even the most inexperienced people can get started investing, even if you only have a little money to begin with.

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