To ask you about the stock market?

[HeyGirlHeyBoy]

A poster recently mentioned the dependability of S&p for growth and I am considering buying some stock, if this is even the expression, but I'm a little fuzzy on it.
Do I need to pay tax on end profits and declare annually?
Will I get dividends or is that only for shares?
Can I take my money back at any stage or do I need to lock it in?
Should I consult with a broker or can I do a DIY?
Amy practical advice much appreciated.

I would speak to a financial adviser personally.

I DIY.
Some I get dividends for, some I don't. I declare what I earn and use an app.
I started with a £3 deposit.
You have to pay to use the app to access some shares e.g. penny stocks. I use the free version.
If you're investing thousands use a broker.
I now have a small portfolio and I draw my money out when I want, although it takes 2/3 days to hit my bank.

If you want a referral link I can DM you. You and I both get a free share.

Wow, ChonkyChonk that sounds amazing, well done you! That's an interesting way to do it, starting small. Yes please.

I've sent it via DM.

I take the 'change' out of my bank every week and put it in, so ever more than £10. It's just gambling but it's commission free and small amounts.

OK. You sound v competent!! It might be a good way to start. I was considering locking away some and leaving say for 5/10 years.. Not a massive amount but growth is almost guaranteed apparently..!

If you are a beginner buying a fund- a basket of shares, bonds etc that are selected and managed so you don't have to do anything - is a good idea till you get more knowledge.

You can buy it within a stocks and shares ISA so you don't have to pay tax. You can have an accumulation fund to save, or an income one where you get the gains to use now.

Vanguard 60% equity seems popular. There are different platforms to hold this. I use iWeb, it's only £5 per transaction, so wouldn't be good if I were drip feeding every month, but good for my rare but largish deposits. Others charge regular fees.

Absolutely NOT competent. Absolutely a gambler though.

We're talking about doing a big investment but we're just playing small right now while we decide.

Be very careful with claims like growth is almost guaranteed.

Also think about your capacity for loss. Can you take the hit if it all goes wrong?

To be honest, i know Chonky is trying to be helpful, but there is a lot of information out there on stocks and to be honest, it can be a lot simpler than that.

Picking individual stocks is inherently risky. Some companies can boom, but equally, they can go bust over night. If you only have a small handful of these companies you have a large risk of something going wrong.
You also have to factor in that, lets be honest, we don't have any inside information or huge knowledge of the companies and we are likely to pick names we know, hardly a quick way to success.

I don't have any particularly products to recommend you, but the sensible way to buy the stocks is through a stocks and shares ISA. That way, you dont have to pay any tax as the profit you have grows, and there is no cost to take it out of that tax wrapper.

Having said that you shouldn't pick individual stocks, my personal feeling is the best way to maximise your potential profit is to invest in trackers or index funds. These pick small amounts of stocks in 1000's of companies across a particular sector or market, therefore if any of those companies fail they are only a small portion of your overall basket.

Personally, i use Vanguard Lifestratergy products, which only have a 0.2ish percent charge and will generally perform in line with the tracker they are following. Please do your own research, but the UKPersonalFinance subs on Reddit are a great place to start.

Yes you can use a platform like AJ Bell for DIY investing. Money can be withdrawn at any time tho as PP said it takes a couple of days to reach your account. You can put up to £20k a year in an ISA share account and any profit will be tax free. You also have a dividend tax free allowance each year which as a starter investor you are unlikely to exceed. Exchange traded funds spread your risks and have lower fees than actively managed funds. I currently have investments the following funds - electric cars, gaming, financial technology, global technology, s&p 500, and a global share tracker which are all growing steadily ( I’ve a bunch of things also not doing so particularly in the medical sector). My star performer at the moment is Argo blockchain which I took a small gamble on and is up 140% in a month - I sold my original investment in Argo this morning so anything positive that happens going forward will be pure profit. Don’t recommend that for a start investment tho - prob too risky.

Quick warning, growth is never guaranteed and use your intelligence about random advice over the internet. This website’s been strongly recommended, and is regularly quoted, for years - www.moneysavingexpert.com/savings/

I'm reading all advice, thank you. I understand no guarantee but say S&P on average have a growth of 10% annually. So if you locked away 10k 20 years ago, you'd have 35k now, taking the growths and losses into account... I am in Ireland so not sure if ISA an option.

Growth can average 10% pa over a number years but there are huge peaks and troughs, so you should only regard investment as for the long term and after you've got a good few months income saved in cash, which should protect you from needing to withdraw money at the wrong time.

For example, all the stock markets dropped by a lot when the pandemic was declared, so anyone needing to take money out before it started to recover again could have lost thousands.

In the UK, ISAs and capital gains tax allowances can be used to reduce or completely remove tax from growth, but obviously you'd need to see what provisions are in place where you are.

Make sure you know how fees can affect the value of your investment and what a reasonable fee to pay is. Vanguard is often recommended as a good low cost supplier of index trackers, but I don't know if you're allowed to buy them as an Irish citizen.

Yes the fees is definitely something to watch. Good idea re having some medium term savings also. My idea was to lock it away and not as necessary money for car, boiler, holidays etc.

Have a look at Fundsmith, maybe a bit safer than trying to DIY.

Whats the risk, is it 'just' that you can lose all of the money you invested and accrued, or can you end up owing money? People used to think Lloyds was a sure fire bet.

Yes, 'just' losing it all!!

There is lots of app you can use that are no fee.
Probably the safest way of investing would be via Vanguard into to a stocks and shares ISA.
Value can go down as well as up.
I also use etoro. On there you can allocate funds to copy other investors that seem to know what they are doing better than I do.
But obviously that is a lot more risky than investing into a fund.

Do some research. Understand the difference between shares for growth and shares for income (dividend paying). It's quite fun, Rich Dad, Poor Dad is great as is 'How to Own the World' - beginners guide to investment. Buying shares and funds is pretty straight forward in itself, join a platform like Hargreaves Lansdowne, they have a 'top 100' or so of their funds. Start small, drip small amounts in to an ISA and learn as you go!

The stock market is a long term investment (unless you're trading which is different). Look up the dollar cost averaging principle, where you drip money into buying funds or shares over time - thus buying through highs and lows of the market itself. If placing large amounts of money seek advice. If you're just starting out start small with what you can afford - many funds you can buy as little as £25 a month - and it all adds up. And yes you can lose money, it very much depends when you buy and sell. The reason the stock market is seen as reliable is that over the long term, it's risen. Of course within that there are companies that have bitten the dust, but that's why funds are popular, they contain a basket of individual company shares picked by the fund manager.

Are you being serious, considering investing money in a market when you do not have the slighty idea of how it works?
I worked for over 30 years in an international, very well respected branch of the financial industry ( including stock exchange , settlement, clearing, depot management, corporate actions, dividends, interest payments, options etc. etc.) Do you know what anything of that actually means? Even we in the industry always said that if you can't afford to loose it, don't invest!

Ds1 is interested in stocks.

I have stocks and shares ISAs and just trade myself. Tbh it’s not rocket science, it’s guess work. Philip Tetlock did a famous study showing investment brokers have no more skill than the average person on the street. I think that’s true.

You just gotta have the bottle

Re tax, in the UK you may need to pay tax if you sell shares and make a profit. Capital Gains is applicable, but you have an allowance which CGT isn't payable on - c12k.