A leading investment platform received 100,000 more visitors to its website during the last week of the 2021/22 tax year compared to the same time a year ago.
So, with the number of investors seemingly on the rise, what should beginner investors take into account before entering the stock market? Let’s take a look.
[top_pitch]
How is the number of investors rising?
According to Hargreaves Lansdown, there were 2.4 million visits to its website during the last week of the tax year. This compares to 2.39 million visits during the same period a year ago.
So, this 100,000 rise tells us two things:
- The number of people looking to invest their wealth is rising. This is perhaps not surprising, given that interest rates on savings accounts are pitiful right now.
- Investors are more aware of the importance of making use of their annual ISA allowance.
To learn more about why the ISA allowance is important, take a look at our article that explains what a stocks and shares ISA is and how it works.
[middle_pitch]
What do beginner investors need to know?
With data suggesting the number of investors is on the rise, Lorna Kapusta, head of customer engagement at Fidelity Investments, has highlighted three key tips that newbies should keep in mind before entering the world of investing.
1. It’s never too late to start investing
While older investors may have a more risk-averse attitude to investing, as long as you have your health, then understand that it’s never too late to invest.
As the famous Chinese proverb goes: “The best time to plant a tree was 20 years ago. The second best time is now.”
2. You don’t need a lot to invest
It’s a common myth that you need to be wealthy or have a big lump sum in order to start investing. Thankfully, this couldn’t be further from the truth.
Even if you only have a small amount to invest, it still makes sense to invest. For example, even a £25 monthly investment will equate to an annual contribution of £300.
If you do start small, remember that you can always increase your regular contributions as and when your financial situation allows.
3. Have a goal and stick to it
When it comes to investing, or even saving for that matter, it’s important to know why you are putting away money in the first place. So, whether you’re investing for your later years, your children’s university costs or for a major purchase, it’s worth keeping your goal at the front of your mind.
As Fidelity’s Lorna Kapusta explains: “When you have a goal for your money, it is easier to commit and stick with it.”
What else should beginner investors know about investing?
Beginner investors should understand that the waters of the stock market can be choppy. Markets can rise and fall, and they can sometimes crash.
As a result, the number one need-to-know when it comes to investing is that your capital is at risk. However, investors with a long-term horizon are often in a strong position to cope with any falls. This is partly the reason why the Motley Fool advocates a ‘buy and hold‘ investing mindset.
For more newbie investing tips, take a look at our extensive investing basics guide. The guide lists common mistakes to avoid when it comes to investing, which can give you the best possible head start.
Are you looking to invest? If you’re ready to invest, take a look at our top-rated share dealing accounts.
