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.

@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.

You can open a stocks and shares isa with a 20k a year deposit limit and any gains are tax exempt.

For dividends you can pick an accumulating or distributing etf for the s&p 500 accumulating is best (it automatically buys more of the fund with your dividends) the s&p index isn't really a high dividend payer anyway

Have a look on justetf.com and find the etf with the lowest ongoing expense ratio iirc SPXS (that's the etfs ticker/short name) is a good one.

Trade212 have a decent app for isa

[quote WhoStoleMyCheese]Once you buy a financial asset (stock, bond, etc) your money is gone, the same as if you had bought any other physical good. The only way to get your cash back is to sell the asset at whatever the prevailing market price is. The price fluctuates but over time gives you a higher rate of return than saving in a bank.
That is why investing is a risk and you should ONLY ever invest cash you won’t need immediately.

This is a good guide that answers the rest of your questions:

www.fool.co.uk/investing-basics/[/quote]
Just don't trust any of their recommendations/picks they're a pump and dump site

I do a bit of DIY - about £500 per month - it’s essentially gambling because I’m by no means an expert although I’ve done reasonably well over the past few years.

My long term plans are in managed funds

Re crypto
I bought a few hundred pounds of Bitcoin a few years ago, it’s at ~300% up but I genuinely don’t get a good feeling about it. Probably because I can’t compute what it tangibly is. It makes no sense to me...maybe I’m just thick 🤷‍♀️

Also I do use Coinbase, and something seems off about that too. It suddenly kicks you out every now and then, and I’ve heard bad stories of people trying to get their money out. I’ve not tried to get my money out yet so not sure what’s going on there, but bad vibes.

[quote hamstersarse]@Rhayader. They do no worse than ‘professional’ traders 🤷‍♀️[/quote]
Most professional traders running managed funds, that they charge a lot of money for, don't beat index trackers either.

There's a saying about never investing in anything you don't understand. That's why people blindly getting into things like cryptocurrencies is probably a bad idea for the majority.

Yes, some people will have made millions but that ship has probably sailed unless you put a lot of money in and then we're into the 'investing more than you can afford to lose' territory.

Plus there's a lot of scams and people not always being able to get money out when they want or need to.

I really don't think it's as complicated as people like to pretend. I don't really know anhthing about it but I've been investing in index funds for years. There have been various times (including last March) when the amount has dropped by up to 20% but its always recovered eventually. Index funds are not trying to 'beat' the market because they just track the market. Most of my money is currently invested in the FTSE Global All Cap Index in an account with Vanguard.

I think OP you should decide what you’re investing for.

Are you wanting a gamble, so looking for the thrill of the risk and therefore high returns?

Or are you looking for less risk and a lower, more certain return?

I know people who do the first. Stock pick, fingers crossed and hopefully they’ll make load of money. Of course if the company fails they’d lose everything but that’s a risk they’re willing to take.

A tracker fund will satisfy the second. It’ll diversify for you which as a PP poster mentioned means that if one stock crashes the impact will be less severe to you.

Much as you’ll see a lot of people talking about all the money they made it’s very acceptable to invest just to match your outgo or just to get a steady return. We can’t/don’t all want to take on lots of risk!

I agree @TimeToParty btw

I prefer option 1. It's just the way I am built, but I know most (?) people do prefer option 2 and that's fine too!

@hamstersarse not sure about most people but I’m certainly someone who prefers option 2. Gambling (stock market or in a casino) just doesn’t interest me at all.

I have a friend who (pre covid) gambled as entertainment. He knows that overall he’s lost money ofc, but to him he’s paying for the entertainment and the thrill. I’d rather take the same money and spend it on seeing a show or eating out and so on.

Option 1 is only for people who have time to monitor the market and make frequent judgment calls to try and time their purchases/sales/trades. Most people don't have the time, skill or inclination to do that and it is not responsible advice to someone who is new to the stock market.

Option 2 works perfectly fine for someone who wants exposure to equities and more of an upside than cash deposits but not prepared to actively monitor their investment and can take a few dips in the market. I've done pretty well for myself and my dcs using the buy and forget about it (apart from occasionally) strategy of buying low cost index funds using my ISA allowance and dollar cost averaging (i.e. regular contributions). This is purely for investment as I don't generally require access to those funds in the short or medium term.

The OP should consult a financial adviser if she has specific financial needs or targets.

I suppose I don't really see it exactly like gambling.

Gambling is win or lose.

Share dealing is very unlikely to be a complete loss overnight in one hit, you see ( I have had!) shares lose their value but it doesn't tend to be overnight crashes and you can set a stop loss to prevent complete loss.

I keep an eye on tracker portfolios so always have 'safe' stuff in my portfolio along their lines, it's just I like to sell when I want to and have a bit of control over how my money is spread.

Anyway, it's all down today - Fridays are always weird!!

@hamstersarse coinbase is fine, I've withdrawn money without issue. You're right to be cautious though, a platform can go pop overnight and you've no recourse or come back on lost crypto or money. Happened to me with a platform called Bitsane, the owners literally did a runner, closed up and ran off with everyone's funds! Fortunately I hadn't bought a lot but it was a valuable lesson. I keep my crypto in storage ie not on a platform for that reason, and transfer to a platform like coinbase when I want to sell it. Coinbase is legit...I might have this wrong but think they floated recently? They're also hooked up with Paypal, so in the round pretty trustworthy (as much as anything is in the crypto space!). I'm a fan and done ok out of it, but I do my homework and stick to fundamental investment principles - pay what I can afford to lose, cover costs and ignore fomo/greed!