Is it worth putting money in stock market?

[Touty]

I keep reading about people getting great returns eg from s&s isa. I am scared to put money into stock market as can’t afford a loss, so for many years I’ve just had cash sitting in savings accounts at about 4 percent return.

should I start investing in stock market for greater returns?

If you can’t afford a loss, honestly it’s probably not for you. S&S returns on average are significantly higher, but they can be volatile so you have to be prepared that sometimes you will have made a loss, and in general when that happens the best advice is to leave the money invested, when it may recover - if you are loss averse and take it out when you see the numbers fall, you will crystallise that loss.

All this means - you should only put in money that you could afford to make a loss on, you should aim to leave it invested
for at least 5 years, and you should stay confident and ride out fluctuations.

I have a high risk tolerance and most of our
savings are in S&S so I’m not at all against them. But your phrasing suggested that they might not be the right product for you. If you think you can manage with just some of your savings being at risk, maybe you could split between cash and S&S? But only if you think you can handle fluctuations along the way.

Why not open a S+S isa today and put a small amount in. £100 would be OK. You could set up a direct debit for adding £25 a month if you like. Keep it all small so it's not scary. Use it as an opportunity to get experience and understanding of investing and of riding out any short term volatility. Look at the percentage growth and compare to your cash savings. You'll gain confidence to make your own choices about how much of your savings you feel comfortable investing. I would always keep an emergency fund of a few months very basic living costs in cash though so that you never have to take money out of the stock market when it's dipped, but have the freedom to wait until it recovers

Several apps, like Trading 212 let you play around first with fake £££. See if that makes you more comfortable? Personally I think having some cash ISA is good, but most of mine is stocks. Look up John Bogle and just go with a very conservative investment strategy like his. The main trick is not to panic and sell if it goes down a bit. Overtime stocks rise, and with the right mix of trackers it's hard not to beat any cash ISA rate.

Why do you want to invest? If you're scared of losing money and can't afford any loss, I think stock market investments are not for you. These always involve some risk and volatility.

If you want to dip your toe in the water, investments with slow and steady returns might be more suited to your risk-averse temperament and situation. Overall these are likely to provide a lower return than stock market investments over the longer term, but perhaps a little higher than savings rates. Allocating a small portion of your savings into a low volatility portfolio, with investments such as money market funds, bonds and a small percentage of equities would likely be a lower risk option to see how you get on.

This is what ive done. I invested £100 and pop the odd fiver in when i think about it as ive not experience of stocks and wanted to experience it before making any actual investment. I enjoy it but im not confident enough to put real money in at the moment.

I started with a small monthly investment to get comfortable. To check if a stock is reasonably priced, I use https://intrinsicalpha.com/tools/intrinsic-value-calculator to compare price to estimated value. That helps me feel more confident about my choices. Plus, keeping an emergency fund is smart.

From what I’ve been reading the stock market goes in boom and bust cycles every 20 years or so…the last big bust was 2008…so maybe 2028 due a bust? 😬 Also I’ve heard there is an AI bubble similar to dot.com bubble where stocks were massively over inflated and collapsed…😣 it’s too much risk for me personally

Do you have a pension OP? If so then you are investing in the stock market already, even if it's a workplace pension.

It depends on how much cash you have and what it's for. For example if you have 3+ months expenses in savings and no debts (apart from mortgage) then it's time to start investing in the stock market either via a pension or a S+S.

On the other hand if you have credit card debt, car loans or a small amount of savings then I would suggest focusing on clearing debt and building up a few months expenses in cash first.

You need to be able to put investments away and not touch it for 5 years plus, it will go up and down during that time, and you need to be able to not panic when it goes down and stick it out for the long-haul. If you are saving up for something specific that you need to buy soon, or that's the only cash you have access to then that money should not be invested as there is a risk that you need to pull it out when the value has dropped, or that you will feel very nervous about the value going down. If you literally can't afford any loss because that money is needed soon, keep it in your cash ISA. If it's long term money then you should get a better return over the years on average (it doesn't go up every year!).

My S&S ISA money is for my kids Uni costs, I've been investing for over 5 years and I don't need to touch it for another 10 years, only about half of the money in there now is what I've paid in - the rest is growth (the increase in the value of the fund). Nearer the time (a couple of years before I need it) I will move some into cash.

I’ve made 17k in my isas on 40k investment. Spread it out a lot. But I do favour ai and tech. Xx

I know the advice is not to time the market, but gains have been huge over the last few years and a downward dip will inevitably be coming. One of my pensions (100% global equities) that I no longer pay into is 25% up in the last year. Not sure now is the best time to be putting lots in for the first time. Maybe start with regular sums over a period of months/years.

ETF or index funds if you don’t know what you are doing specific stocks/bonds wise. And a long view. But calling the top or bottom of the market is difficult.
There has already been a crypto crash, there may be a tech/AI cool off coming. But overall the index over a long period will outperform historically, by significant amounts.

OK I just mentioned ETFs and index funds if you don’t know what you are doing and take a long view.

We used a well know investment company for seven years for s and s isa and despite constantly being told to leave the large sum invested with them made less than we would have with a fixed rate cash isa. Moved all money out of it and now stick with cash isas. Just got 4.7% for five years guaranteed but appreciate we may have had duff investment person as I know friends who’ve made great returns on s and s isa.

Invested for years and it’s true you should only invest in anything super risky that you can afford to lose. But you need to look at the very long term. Now we are older our higher risk days are over as less time to recoup. DH lost a lot of money one day but it was 20 years ago, he recouped it and more it but it took a while. So I would ask your age and what other assets you have,

Things like Trumps tariffs, lots of people had a wobble I remember someone on MN sold immediately at a loss, you can’t be nerdy like that.

Investing is a long term thing ie minimum 5 years.

Over the long term it is very unlikely you'll lose money.

I've made 50% over the last 2 years which is way above average equity returns so fully expecting a crash in the future to bring the annual return down to the norm of approx 10%.

I invest. Just had a look and my return over the past 5 years has been £33k so better than savings.

That said, if it’s money you’re not able to lose, investing is not for you and you’d be better off looking at something like Prize Bonds.

What does cant afford a loss mean ?

You have £100k or £200...
If you dont need immediate access you.can ride out any dips.

To get an real returns you need a level of risk. I wasted 15 years using fixed savings.it was a massive mistake for me.

I think it depends on your age and when you think you will need the money. If you won’t need the money for 10 years or more, then the stock market makes sense. You would have time to ride out the dips.

As someone mentioned above, the important thing is that you don’t panic and sell when the market goes down. That’s how you lock in your losses. The key is to wait it out. That’s why the advice is to only invest money you won’t need for 10 years or more. Plenty of time for the market to recover.

The other thing is to think carefully about what you invest in. Most people would suggest a diversified index fund that has a low management fee. Something you could set and forget. Personally I avoid buying individual stocks. Too much volatility and too much knowledge required to choose the right stocks.

100% it’s worth putting money in the stock market. Keeping cash is a guaranteed way to lose money in the long term.

Do it sensibly tho, only invest money you don’t need for at least the next 5-10 years, choose your risk tolerance etc.

If you’re smart about it it’s very hard to lose money in the stock market in the long term.

According to the BBC women are better at investing than men.

https://www.bbc.co.uk/news/articles/czdmgmzll1ro

100% this. Stick 5% or similar of your savings in and add to in month on month or however regularly you save. I did this putting the same amount of money in a cash ISA vs a S&S ISA and so could easily directly compare the two pots after a set period. Was illuminating. And because it had gone up that was then the buffer I could use to invest more without being worried about a loss because I was already up if that makes sense.

Yes, that’s exactly what I did. When I first entered this field, I knew nothing at all — I only knew to invest small amounts regularly. It wasn’t until I started trading with a well-known British investment professor that I felt everything became so simple.

I did the Rebel Donegan finance course earlier this year and really learnt a lot from it. It’s free on YouTube so maybe give that a go before investing? I have started. Sadly late to the game regarding compounding.. My portfolio is very simple. It’s money I don’t need right now. My own issue is tax because where I am (Ireland) the tax on ETFs is bonkers. This may change in the next budget or two so I’m keeping a careful eye on that more so than any market fluctuations.

Yes definitely. We've made over 50% in the past 2 years. It's well above average for long term returns so won't last but you have to be prepared for the ups and downs of equities.

Would you mind saying how you have invested? Eg tracker or etc.

Bog standard global tracker