At the end of this month, I would be investing in the stock market for one year now. I’m not perfect and my knowledge isn’t perfect, but I am learning a lot the more time I spend doing it.
I entered into this with no official financial knowledge, but of course I made sure to do some basic research first.
I wanted to see whether it would be an effective method of growing my money in the long term, so that eventually, it could start earning me a form of passive income.
Before I continue, nothing here is sponsored, nor is any of this financial advice. All of this is purely my opinion.
What Am I Investing In?
Firstly, it’s good to know what I am investing in. Over the year, I spent a lot of time trialing and changing my investments. I did this to adjust my decisions based on new things I learnt, and understanding different stocks that I was investing in.
So in this portfolio, I am investing in individual stocks and shares mostly. This includes big well established companies such as McDonalds, Microsoft, Disney and Coca-Cola.
I am also investing in a few other stocks such as National Grid, Realty Income Corp, some financial institutions and Delta Airlines.
This portfolio now is very different from when I first started. My first tactic was also first investing in well known, dividend paying companies, but also some undervalued stocks like Delta Airlines. I know this was a big risk as it could’ve gone under, but my knowledge of investing wasn’t there yet.
When I chose these, I didn’t understand that other types of investments like ETFs and index funds existed yet. So I went straight into one of the more risky products to invest in!
How Much Am I Investing?
Like most people, I don’t have much spare cash lying around. I tried to save what I realistically could from my pay check to put into investments.
In the beginning, considering I’m pretty much on minimum wage in the UK, I was putting away about 6% of my income into this. It’s not really a lot of money, but something to consider is that any amount of money is the way to get started when investing.
Over the year I was fortunate to still be working, so I made sure to stash away any money I could put into investing.
I didn’t want to wait to build up my savings before investing, as I would miss the natural growth of the market over time. I also didn’t want to put more money than I could afford. It’s not worth getting into debt from investing, especially in the early days.
What Platform Am I Using?
Right now, I am investing in stocks in eToro. This is an investing platform accessible to anyone in the UK and most of the world too.
I chose this app due to some research in comparison to other investing apps. The main thing is that it is approved and regulated by official financial authorities depending on your location. In the UK, it’s the FCA or Financial Conduct Authority.
This gave me more trust in the site, since it will be responsible for looking after your money.
They also cover losses up to a certain limit, again depending on your location in the world. They won’t cover if your investment goes down in value, but if eToro as a platform were to go bust, I believe there’d be some cover.
Either way it’s pretty safe to put your money into.
How Much Have I Gained?
Over the year, my partner and myself have contributed the equivalent of 1.5 months worth on my income. It’s not a lot of money, but it’s a good start.
As mentioned, some of this was invested in increments over the year. Other parts were gained from some investments, which I then put into stocks I believed in more.
One thing that I got very lucky with was timing. April 2020 was one month into lockdown here in the UK, so many stock prices were very low.
This was one consideration to think about since it could look like I chose well. Truth is, the majority of companies dropped, then increased in share price over this year. However, I’m glad I chose last year to put myself out there into investing.
I’ve gained some income from not only selling stocks at a profit, but also from dividend pay outs. My overall portfolio’s value has also increased from stock growth.
So taking this into account, I’ve calculated making a 21% growth on my initial investment value. This is obviously pretty amazing, and right now down to stocks plummeting during the pandemic.
My Future Goals
For me, investing is about the long term. Although I know I’m investing in the most risky product, which is individual companies, at the same time I think high risk can be avoided.
My main aim is to stick to mostly well established companies. I also do my research, and find out what these companies are doing to better themselves.
For other companies, I try to choose what I do understand. For example, I have a Netflix and Disney + subscriptions, and I know myself how popular both these services are. Not everyone will agree, but with a lot of customers for each, they show good potential to grow and be stable. I can’t see myself losing my Netflix or Disney + accounts anytime soon. But of course nothing is definite, which I understand.
The main method I aim to stick to is to keep investing in little amounts and not to touch my portfolio. My tolerance for volatility in the market has improved since last year, so now I understand if a good company loses 4% at one point, it can easily be gained in the future.
I am happy with where I am at, and will definitely keep investing and learning more about the market.