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The Ultimate Guide to Investing for Beginners

Reading time: 38 minutes

We all want to get the most of our money, whether it's upgrading our lifestyles, splurging on a holiday or a new car, or planning for retirement. As a beginner, though, figuring out where to start with investing can be a challenge. There are so many options, and when you look at the numbers over the long term it can quickly get overwhelming.

The truth is, though, that knowing how to use your money today to earn more for the future is a great way to ensure a financially secure future. Just letting your capital sit idle in your bank account won't help you save for the long term. This is why it's so important to consider investing as early as possible.

Ultimate Guide To Investing

The good news is that there are more options for investing for beginners than ever before. In the UK, for example, there are a wide range of investment options. The London Stock Exchange has a market capitalisation of approximately $6 trillion. It is home to stocks from almost 3,000 companies from over 60 countries worldwide. In this article, we take a look at how to invest money, some of the best investment options for beginners, and how to go about it. But, before you decide where to invest money, you need to know what we mean by investing.


What is investing?

Investing is simply putting your money into an asset with the goal of the asset generating income, or appreciating in value.

Just consider real estate, as an example. If you purchase a house with the intention of renting it out to tenants, this is an income-generating asset. If you purchase a house with the intention to renovate it and sell it for a higher price, that is an asset that has appreciated in value.

The same goes for investing in shares. A share is simply a small piece of a company. If the company pays dividends to shareholders, this is a form of investment income. You can also choose to sell your shares - hopefully after the company's share price has risen, in which case you'll make a profit.

When it comes to what you can invest in, there are a wide range of assets for you to choose from, including shares, index funds and ETFs, bonds, commodities, currencies, cryptocurrencies, real estate and more.

The reason for doing this is simply to make your money work harder for you than it would if you just held it in cash.

Why should you invest money?

The topic of investing for beginners will typically begin with this question - why invest at all? The simple answer is to build your wealth.

Most of us have noticed that prices don't remain the same - from the person who talks about milk costing 5p in their day, so simply noticing that eating out or travelling seem to cost more than they did five or 10 years ago. This is inflation - the rate at which the price for goods and services increase over time.

The challenge with this is that it means the value of the cash in your bank account decreases over time. The basket of goods and services you could buy with £100 would have been much larger 50 years ago than it is today. Similarly, with the prices of goods and services continuing to increase, £100 in your wallet today will buy a smaller basked in another 50 years time.

The benefit of investing is that you can earn a higher return than the rate of inflation, meaning your money increases at the same rate (or, ideally, at a higher rate) as the cost of living.

Unfortunately, most bank accounts aren't offering very high interest rates today, so when you're investing your money, you'd want to put it in ventures that offer the potential to earn high rates of return, in order to grow your wealth over time.

Investing for beginners: The power of compound returns

So how do investments work in practice, when it comes to making you money?

Simply, each investment has a rate of return, or the rate at which the investment will increase in value over time.

A savings account might pay 2% interest per year, for instance. This means that if you put £10,000 into that account, in one year you would earn a return of £200, bringing your total investment up to £10,200.

If you then did nothing else, you would earn another 2% the next year. However, because your starting balance for the second year is £10,200, the 2% interest would be valued at £204. This would bring your total account balance up to £10,404.

Every year you would continue to earn interest on your growing account balance.

The stock market, on the other hand, might be growing by 8% a year. This means that if you invested £10,000 into the stock market, in one year your investment would be valued at £10,800.

If you then left your money in the investment for another year, you would earn another 8%. Because your investment is now £10,800, 8% is £864. This brings the grand total to £11,664. After 10 years, you would have £21,589.25, even if you never topped up your investment with additional funds.

If you topped that investment up with £500 a month, in 10 years you would have £111,651.39!

So one of the biggest benefits of saving and investing is the ability to earn compound returns (or returns on top of your returns). The higher the rate of return over time, the faster your investment will grow.

One of the biggest differences between simply saving and actively investing is that investments earn a higher return over time, assuming that you're using good risk management and money management practices, of course.

As the name suggests, a savings account is meant to help you save or put away money for a rainy day. Investing, on the other hand, is focused on trying to make your money grow by putting it into a number of investment vehicles that you believe will increase in value over time.

There are a number of investment vehicles that beginners can use to increase their wealth, such as stocks, bonds, ETFs, Forex, CFDs, commodities and cryptocurrencies. Most of these options offer the potential to earn a much higher rate of returns compared with a savings account. It's important to remember, however, that they also involve different degrees of risk.

People invest for all sorts of reasons, like creating wealth for the long term, planning for retirement, meeting financial goals, or simply adding to their disposable income. Some investment products offer tax benefits, which translates to the double benefit of tax saving and capital gains.

Are you already itching to get started? The good news is that you can open an investment account with as little as EUR 1 with Admiral Markets. Simply click the banner below to get started!

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Timing the market: What investment returns can you expect?

One of the biggest challenges for beginners learning to invest is learning what to expect. There are so many media headlines, not to mention success and horror stories, telling us about a market or investment that spiked or crashed overnight.

This can lead a lot of new investors to believe that they need to time the market - to buy and sell at the exact right time - in order to have success in investing.

The truth is that markets move in cycles. Over time, productivity grows - technology gets better, companies grow more efficient, and people build on the innovations that have been made in the past. This leads to companies getting better and better over time.

At the same time, there is a regular debt cycle, where markets experience a period of growth, followed by a contraction or recession. Generally, interest rates peak during the growth period then are reset after the bust, which encourages further growth, leading the cycle to start again. This cycle takes place every 5-8 years, which is why so many investors feel like the market is constantly booming and busting - because it is!

There are also longer term debt cycles, which last for up to 50 years. September 2008 can be considered the peak of the last long-term debt cycle, and this takes place when economies have so much debt that they cannot take anymore.

As an investor, this means it's important to recognise that markets will constantly go up and down. However, once you recognise this, you can stop worrying about trying to time your investments perfectly, and can instead focus on buying and holding for the long term.

In general, markets go up over the long term, meaning long-term gains will survive any short-term ups and downs.

How much money should beginners invest?

When considering investing for beginners, how much money should you invest?

This depends on three main factors:

  1. Your financial goals
  2. How much you can afford to invest
  3. Your risk tolerance

What are your investment goals?

First, ask yourself: What are your financial goals? Why are you investing? What would you need money for in the future?

Some common goals include:

  • Having the money to buy a house or a car
  • Funding your child's university education
  • Growing a business
  • Having money/generating an income for retirement

As a general rule, most people should be investing with retirement in mind. Even though many Western countries have a pension scheme for people when they retire, these schemes are becoming less appealing - due to inflation, the amount that is available to retirees is worth less in real terms, and in many countries the age threshold for accessing that pension is increasing.

On top of that, with increasing levels of national debt and aging populations in many countries, some experts are sceptical about whether there will even be state pensions in another 30 years, which means that if you're a younger investor, it's even more important to think ahead.

However, even if there is still a pension available to you when you retire, it's important to consider whether that will keep you in the lifestyle you want. Do you want to travel when you retire, or help your children and grandchildren financially? If so, relying on a pension may not be enough for you to to this.

With this in mind, it's important to:

  1. Clarify your financial goals (including the amount of money it will take to achieve those goals)
  2. Choose a time frame for achieving those

Once you have a goal and a timeframe, then you can calculate how much you need to invest per month or per year (taking into consideration the expected rate of return) in order to have enough money set aside to achieve your goal.

In many cases, longer term goals are easier to reach, due to the power of compounding (which we discussed earlier). The power of compounding makes a few percentage points appear massive after long periods of time. So, both extended timelines and higher rates of return could potentially give you the same results. This is what makes investment interesting and suitable for different goals.

How much can you afford to invest?

Many gurus recommend investing 5% or 10% of your net income as a starting point. But why not invest all of your money, if that will help you reach your goals faster?

While this might sound good in theory, the truth is that not only do you need that money to cover day-to-day expenses and luxuries, but you also need money set aside for emergencies that might come up. While you can sell your assets to come up with extra cash when you need it, it's far better if you leave those investments to grow.

Depending on your current spending habits, 5-10% might feel impossible, so a good starting point is to start tracking your current spending to see what you can cut. Do you have subscriptions and memberships that you never use? Are you eating out a lot, rather than making meals at home? Do you have a habit of buying things you don't need, rather than using what you already have?

Identifying these habits and cutting back on them can help free up the funds you need to start reaching your investment goals.

How much investment risk are you willing to accept?

The next aspect to consider is your risk tolerance, or your ability to take risk. This usually depends on factors such as your current income, savings, expenses, financial obligations (like paying off a mortgage), whether you have financial dependents, and whether you have appropriate life and health insurance cover.

Someone who is working full time but is still living at home to save up money to buy a house would likely have a higher risk tolerance. Because they have lower expenses, they have more discretionary income that can be put towards investments. Because they don't have financial dependents, if there is a short-term blip in the market that costs them money, they can simply ride it out.

By contrast, someone who is the sole income earner for their family has a range of financial obligations that would likely mean their risk tolerance is a lot lower. For them, it is a much bigger issue if something goes wrong, because not only is there no extra income to fall back on, but there might be several people depending on their income. For this reason, they would likely invest a lower amount in order to always have some emergency cash on hand.

Investment time frames can also affect risk tolerance. As we discussed earlier, while the financial markets go up over time, there are shorter term shrinkages and crashes. If you have some years to go before you need the funds, you could expose your portfolio to higher-risk, higher-reward investment options. Younger generations who have decades remaining before they reach their retirement age can probably afford to take more risks. A high-risk, high-return investment strategy will include a stock-heavy portfolio, or even trading in lucrative crypto CFDs.

As you grow older, your strategy might turn into a lower-risk, lower-return profile. The currency and commodity markets are highly liquid, and are mostly stable environments for traders between the ages of 30 to 60. This could also be a time when you choose to reduce your stock holdings. Remember, there is no set formula here; it all depends on your current finances, your long-term financial goals, and your risk tolerance.

Simply, someone who is investing with a 30-year time span can wait those out, and enjoy the cumulative gains they make over time. Someone who is investing with a 5-year goal, however, would probably want to choose a 'safer' investment - one that isn't likely to have the same growth in value, but which also has a steadier upward trend in the short term, rather than risking a potential downturn.

If you're worried about investment risk, one of the best ways to test the waters is with a demo trading account. With a demo account, you can access live market data and use an actual trading and investment platform risk free. Rather than investing your own money, you will have a virtual account balance that you can invest to see how it grows!

Get your free demo account today by clicking the banner below.

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When should you start investing?

There's an old Chinese proverb that says:

"The best time to plant a tree was 20 years ago. The second best time is now."

When it comes to investing for beginners, because of the power of cumulative returns it is always best to start investing as soon as possible. Ideally, that would have been 20 years ago - then you would have 20 years of cumulative returns building up.

However, if you haven't started yet, there's no need to panic - the second best time is today. Simply: the sooner you start, the sooner you can start benefiting from compound returns, and the longer period you allow for those returns to accumulate.

When it comes to saving up enough money to invest, it's always a good idea to have an emergency fund set aside, just in case something unexpected happens. This amount will vary for everyone depending on your risk tolerance and financial situation, but three months of living expenses is a good ballpark.

If you have saved enough funds to support yourself for three months, it's probably the right time to consider putting your money to better use.

This brings us to the next question - how can you start?

How can you start investing? Step-by-step beginner's guide

Now that we've introduced you to the 'why', 'when' and 'how much' of investing, the next step is learning how you can start investing. The good news is that there are more online investment options than ever before, which means you can create an investment account and start investing today.

Here's how you can do it!

Step 1: Create an investment account

To invest in assets like stocks, bonds, commodities and cryptocurrencies, you will need an account with a broker that offers the instruments you want to invest in.

Some brokers will offer both live and demo accounts - a live account is one where you invest with your own money, while a demo account lets you use virtual funds to help you get a feel for the investment platform and how the markets work.

Here's how you can open an investment account with Admiral Markets:

  1. Create a Trader's Room account. Trader's Room is a dashboard where you can manage your live and demo accounts, deposit and withdraw funds, and download trading software.
  2. You will get an email with your account details - just click the link to activate your account.
  3. Once you're account is activated, log in here.
  4. Click the 'Open live account' button to start your application for a live account, or click the 'Open demo account' button to open a demo investment account.
  5. Your account details will then be emailed to you, as well as being available in your Trader's Room dashboard (this will be available instantly for a demo account, and after your application has been reviewed for a live account).

Demo account for beginner

Step 2: Download the investing platform

Picking the right investing platform, is one of the first things to consider when investing online.

The most popular trading and investment platforms is MetaTrader 5, which is designed for investing in a range of assets from a single piece of software. What this means is that rather than investing in stocks with one broker, trading commodities with another, and trading cryptocurrencies with a third, you can invest in thousands of markets with one piece of software.

The good news is that MetaTrader 5 is available absolutely free - you can download it here.

Step 3: Choose the markets you want to invest in

Now that you have an investing account and a trading and investment platform, what should you invest in?

There are a wide range of assets available for trading and investments, so keep reading for our in-depth guide on the ins and outs of each of these.

The beginner's guide to where to invest your money

Investors put their money into a range of assets to see it grow.

These include 'productive assets', which are investments that can pay you an income (for example, a rental property will pay you the rent as income, while shares may pay dividends), and 'non-productive assets', which don't generate income. Instead, investors choose these because they believe their value will increase over time, and they can then sell them at a profit.

Both types of assets have value in building a portfolio. In the coming sections, we'll outline some of today's most popular investments - stocks, ETFs, Forex, cryptocurrencies, commodities, bonds, and real estate.

Investing in stocks and shares

A stock represents ownership of a piece, or a share, of a publicly listed company. Because you hold equity in the company, stocks are sometimes referred to as 'equities'.

Companies issue stocks and shares as a way of raising funding for planned business activities. When you purchase a share, you then become one of the owners of that company, which means you have a claim on the company's earnings and assets.

The value of stocks is attached to the performance of the company. Generally, if the business is performing well, the share price will increase. If a company is performing poorly, the share price will decrease. As a general rule, stock markets as a whole increase over time, however, individual companies and stocks can decline or even fail.

There are two ways of potentially earning from stocks. If you purchase shares when prices are low and sell when prices have risen, you would make a profit. This is known as capital gain. For this, investors attempt to identify fast-growing companies.

The other way to earn is via dividend payouts. When you purchase shares of a company, you're entitled to a share in the profits generated by that company. This is known as a dividend, which can provide a regular stream of income for investors. The most popularly traded shares belong to dominant leaders within their respective industries. Some of these companies include:

  • The Coca-Cola Company (KO)
  • Wal-Mart Stores (WMT)
  • General Electric Co. (GE)
  • IBM Corp (IBM)
  • McDonald's Corp (MCD)
  • Apple Inc (AAPL)

One of the challenges for beginner investors is choosing exactly which stocks will do well. For this reason, many new traders and investors choose to trade stock market indices, which represent a market as a whole.

In the UK, for example,, the London Stock Exchange is where public limited companies are traded, along with other instruments, such as derivatives and government bonds. UK stock market indices then represent the values from this exchange. The FTSE 100, which is the most popular index in the London Stock Exchange, is comprised of the top 100 publicly traded companies in the exchange.

One of the benefits of trading indices is that because you're trading on the market as a whole, you can benefit from longer-term trends, and are less vulnerable to individual stocks underperforming. The downside is that when a particular stock outperforms the market, you won't get the full benefit, as that performance is diluted by the performance of the rest of the market.

Other indices include:

  • DAX30 - Represents Germany's 30 largest and most liquid companies
  • S&P500 - Represents the 500 largest listed companies in the US
  • CAC40 - Represents 40 of the most significant stocks among the 100 largest capitalisations on the Euronext Paris
  • DJI30 - The Dow Jones Industrial Average represents 30 of the largest listed companies in the US

You can learn about the different stock indices available for trading, along with how to get started, by clicking the banner below.

Trade stock indexes

Investing in ETFs (Exchange Traded Funds)

Another way to invest money in the UK markets is through ETFs or Exchange Traded Funds. ETFs are a collection of stocks belonging to a specific industry. For example, financial sector shares, emerging markets shares mining shares and more.

ETFs are index-based investments, the performance of which is based on correlating indices, with the goal of mimic index returns. Similar to trading stock indices, you can invest in these to benefit from long-term increases in the market.

Short-term trading is a bit more challenging, though, as you need to accurately predict the performance of a group of companies to make a move, and time that based on when you think the market will rise and fall.

Some of the most popular ETFs to invest in for the UK market are:

  • iShares Core DAX UCITS ETF (EXS1)
  • iShares Core FTSE 100 UCITS ETF (ISF)
  • LYXOR EURO STOXX BANKS DR UCITS ETF (BNKE)
  • Xtrackers DAX UCITS ETF (DBXD)

Like shares, ETFs can be bought and hold with the intention of selling them for a profit. Some also pay dividends, which are derived from the dividends of the shares included in the ETF.

How to invest money in Forex

The Foreign Exchange Market (also known as the Forex market or the FX market) is where the trading of currencies takes place. Forex is the most liquid market in the world, with an average daily turnover of approximately $5.3 trillion. The markets are open 24-hours, five days a week, providing an opportunity for many hobbyist traders to participate. The transaction cost is typically low and built into the price for forex investing. This is known as the spread, which is the difference between the buying and selling price.

Unlike in the equity market, in Forex it's possible to profit from both rising and falling prices. This is because when the price of a currency falls in value, it's measured against another currency. This means the latter rises against the former. You can go long on a currency pair that you believe is going to rise in value; and you can go short on a pair that you expect to decline in value.

As a currency trader, you need to stay updated on key factors that determine price movements, such as political and economic stability, monetary policies, currency intervention, and other factors such as natural disasters. For this, you would need to stay abreast of Forex news, you would need to use tools such as the Forex calendar, and you would need access to Forex signals and Forex charts. All these will help you to identify high-performing FX currency pairs. It is also important to note that there are different types of Forex pairs, including 'Forex Majors', 'Forex Minors' and 'Exotic Pairs'.

Among the most liquid currency pairs in the market are:

  • GBPUSD
  • EURUSD

Other important currency pairs include:

  • USDCHF
  • USDJPY

Learn more about trading Forex in our ultimate beginner's guide to Forex.

To start trading Forex and CFDs with Admiral Markets, click on the banner below to open your live account!

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How to invest in cryptocurrencies

Investing in cryptocurrency can be extremely exciting. Cryptocurrency trading has now become mainstream, especially after the phenomenal growth of this market back in 2017. Having said that, with the extreme volatility in 2018 and 2019, it has made some investors wary - especially beginners.

Bitcoin remains the leader, and all other cryptos are known as altcoins (or alternatives to Bitcoin). Currently the cryptocurrency market cap was higher than $250 billion, with Bitcoin's market cap at around $145 billion. With greater mainstream adoption of this digital asset class, the value of the crypto market is poised for growth in the coming years.

In terms of investment possibilities, you can purchase crypto coins as an investment, with the goal of selling them for a higher price when the market increases.

However, with derivatives like CFDs, you can also profit on short-term volatility. Rather than purchasing an asset as a long-term investment, you make a judgement on whether you think an asset will increase or decrease in value. Then you can choose to open a trade on it - a long trade if you think the value will increase, or a short trade if you think it will decrease.

When you choose to close the trade, you then make a profit or a loss based on the difference between the price of the asset when you opened the trade, and the price of the asset when you closed it.

CFDs, or Contracts for Difference, are a tool you can use to open short-term trades like this, all without buying the underlying asset! This means you don't need as much capital to trade. However, this type of investing does tend to be more hands-on than a longer-term buy-and-hold approach, so it's not something you can set and forget.

The most commonly traded crypto pairs are:

  • BTC/USD (Bitcoin vs US dollar)
  • BCH/USD (Bitcoin Cash vs US Dollar)
  • ETH/USD (Ethereum vs US Dollar)
  • LTC/USD (Litecoin vs US Dollar)
  • XRP/USD (Ripple vs US Dollar)

Keep in mind that trading cryptos on online exchanges poses a high security risk. If you wish to trade with virtual assets, it's recommended to invest in crypto CFDs, where you can take positions in both rising and falling markets, without having to own the underlying asset. Admiral Markets offers traders the ability to trade on several different CFDS on cryptocurrencies, some of which are listed above.

Investing in commodities

Commodities are raw materials. These could be: agricultural produce, like grains, corn and cotton; metals like gold, silver, copper and zinc; or energy commodities, such as crude oil, natural gas and propane. They are traded on separate exchanges, and even have specialized exchanges. For instance, the London Metal Exchange carries only metal commodities.

The most commonly traded commodities are:

  • Gold
  • Silver
  • WTI Crude Oil
  • Natural Gas

Commodities are a good asset class for portfolio diversification. This is because returns on commodities typically have a low to negative correlation with the returns of other major asset classes. For instance, when equities and bonds decline in value, the price of commodities rise. Factors affecting the stock and bond markets may not have any impact on commodities. Therefore, a portfolio that includes commodities would typically have fewer volatile returns.

Commodities are also used as inflation protection. Inflation causes the currency to depreciate, resulting in an erosion of the real value of financial assets, such as stocks and bonds. On the other hand, inflation causes a rise in commodity prices. Some commodities, such as gold and silver, are considered a safe-haven investment. Geopolitical uncertainties, natural disasters, and economic crises have a negative impact on most financial assets. During such times, investors flock towards commodities like gold and silver, resulting in a rise in their prices.

Like cryptocurrencies, you can invest in commodities by buying the physical asset. However, this isn't the most practical approach for most investors due to high prices, storage concerns and more. Instead, most investors invest in and trade commodities via derivatives like CFDs.

Learn more about trading commodities in our introductory commodity trading guide.

Trade commodities

Investing in bonds for beginners

So, what are bonds? Similar to shares, companies, governments, and their agencies issue bonds to raise capital.

However, there are a few differences between bonds and shares:

  • Par value: This is the face value of a bond, and it is a fixed rate. It may be different to the market price of the bond, which can be higher or lower than the par value based on factors like interest rates and the bond's credit status.
  • Interest rate: Bonds have an interest rate, which are paid to the holder of the bond.
  • Maturity date: This is the date at which the bond becomes due, meaning the initial investment gets paid back to the investor.

The bond is bought at par value from the issuer; and the issuer periodically pays interest to those who invest in these. On the maturity date, the bond returns to the issuer and the issuer needs to pay the par value back to the investor.

The main advantage for investors is that bonds offer fixed-income payments (the interest payments). Many government bonds are also tax free, meaning that the interest income is exempt from taxes, so one enjoys a double benefit.

Bonds are used by investors for portfolio diversification, and to reduce and offset risk. Just like stocks, bonds are highly liquid.

Traders can also invest in bond CFDs, as this allows them to leverage small price movements, because of the margins involved. With CFDs, traders do not need to wait for the bond to mature, as trading is based on price fluctuations.

Among the most common types of bond CFDs are:

  • 10-year Germany Bund Futures CFD (Bund)
  • 10-year US Treasury Note Futures CFD (USTNotee)

Investing in real estate

One of the most popular types of investment is real estate. In fact, for many people the bulk of their net worth is in real estate - typically their family home.

Real estate is a popular investment because, unlike stocks and derivatives, which can be difficult to conceptualise, you know exactly what you're getting for your money - a piece of land, a house or an apartment.

As an investment, real estate can be purchased to generate income via rent, or to sell for a profit. They are also leveraged investment, meaning you can invest in a large asset with a relatively small deposit - usually between 10% and 20%, plus the expenses associated with buying a property.

Despite only paying a small percentage of a property's value upfront, though, property prices have gotten so high in many areas that real estate is quite a difficult market to break into.

A way of getting around this is by investing in real estate investment trusts, or REITs, which allow you to invest in real estate in a way that's similar to investing in shares.

A REIT is a company that invests in real estate and manages a portfolio of properties. Investors can then buy shares in the REIT, and the REIT will pay out income to the shareholders. This income depends on the property type, but may include:

  • Retail REIT: Rent from tenants in shopping centers
  • Office REIT: Rent from office buildings
  • Residential REIT: Rent from residents in apartment buildings and other residential properties

What to look for when choosing an investment broker

While you can invest directly into any of these assets (e.g. buying shares in companies you like, buying properties, buying cryptocurrency, etc.), for many beginner investors it is simpler to work with a broker, who will give them access to all the markets in which they would like to invest.

This means the choice of broker is critical in your investing journey. Here are some tips for choosing the right broker:

  • Always opt for a regulated broker: The broker should be licensed by your local regulator. In the UK, for example, the broker should be authorised by the FCA (Financial Conduct Authority), and should be qualified to hold client money and handle investments under the FCA Client Money and Assets(CASS) rules.
  • Ensure the broker offers a wide range of markets: This will provide you with ample choices for making better investment decisions. Admiral Markets, for example, offers the opportunity to trade and invest in thousands of markets.
  • Check their customer support: Since you're new to investing, you may need more assistance initially. You'd want a team that is prompt and professional, yet friendly. The broker you choose should be available via email and phone, and should also offer live chat support too.
  • Browse the broker's website for education resources: Apart from articles and blogs, does the broker organise webinars and seminars to boost your knowledge? This will not only help you to gain knowledge in terms of investing, but should also give you an idea of the broker's commitment to your long-term success.
  • Check their commissions and account fees: The profit of your investments isn't simply the sale price minus the purchase price. It's the sale price, minus the purchase price, minus any fees the broker charges. If you are investing large amounts of money this can cut into your profits. At Admiral Markets, for example, our commissions for investing in shares and ETFs start from just $0.01 per share.

If you're ready to find a broker, you're in the right place - Admiral Markets ticks all of these boxes and more! We're licensed by some of the world's leading financial regulators - the FCA, EFSA, ASIC and CySEC; we offer several thousand financial instruments for trading and investing, we have local customer support in 35 countries available via phone, email and live chat; we offer a wide range of educational resources; we have competitive trading and investment costs, and take financial security very seriously.

Ready to get started? Click the banner below to open your investing account!

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8 beginner's tips to get started with investing

You now know why you should consider investing, how much to invest, how to get started and the biggest markets you can invest in. Now that you're ready to go, here are some final tips on investing for beginners to help you get off to the best start.

1. Invest for the long-term

One of the biggest differences between trading and investing is time frames. Typically, traders look to make short-term profits - sometimes in as little as one minute! This means they either need to be actively monitoring and trading the markets, or they need some automated trading software that can do it for them.

Investors, on the other hand, invest in an asset with the goal of its value growing over years or decades. This helps take the pressure off - you don't need to worry about short-term dips in the market, because you know they'll even out over time.

2. Contribute over time

Building on the previous tip, it's also important to regularly top up your investments over time. While the power of compounding returns will see your initial deposit grow, it will grow at a far faster rate if you regularly contribute to it - even if you're just putting an extra £50 or £100 a month into your portfolio.

This also helps you get the most out of market ups and downs. When the market goes up, you continue riding the wave by buying more assets. When the market goes down, you are essentially getting those assets at a discount while prices are lower. When the market rises again, your net worth will then increase exponentially.

3. Manage your investment risks

Whether you're investing in stocks and shares, considering trading Forex, or wondering how to invest in Bitcoin CFDs, the need for appropriate risk management to keep losses at a minimum cannot be overemphasised. If you're investing in the UK, remember that the UK markets are 70% service-based, so changes in consumer credit and commodity prices can affect your trades. The UK is one of the oldest and largest financial centres in the world, and still an attractive investment destination.

Here's a look at some different ways to manage risk when investing or trading:

  • Follow the Trend: It's often said that the trend is your friend. So, one major risk management technique that traders should consider is to buy assets that are in an uptrend, and then sell them when they have risen too much (crossed their trend line support).
  • Be Consistent: It's best to invest a certain amount of money on a regular basis. This could help you to achieve better returns over time.
  • Be Patient: Avoid pulling out of assets at the slightest dips. There will be some fluctuation in prices, and you may need to wait it out and allow enough time for your strategy to work. Avoid panic selling at all costs.
  • Use a Stop Loss: This is among the most important techniques of risk management when trading. A stop loss order will automatically sell your asset if the price drops below a certain point.

4. Diversify your investments

A staple of managing your investment risk is diversifying your portfolio.

This involves purchasing different types of assets, asset classes, and instruments. For instance, only investing in shares is quite risky, because it means when the stock market goes down you could potentially lose everything. If you have a mix of investments - shares, commodities, bonds, Forex - then you will be insulated from volatility in any one market. You could also include some higher-risk and some lower-risk assets (like stocks and bonds) to diversify your portfolio.

This is probably the simplest way of reducing risk, as it works by reducing overexposure to one asset or asset class, and protects the overall value of your portfolio. This method also helps to identify assets or asset classes that have negative correlation (like two currency pairs, or stocks and commodities).

5. Balance investment risk and reward

As a general rule, the assets that generate the highest returns are also the most risky. With that in mind, it's important to balance your risk and reward based on your financial goals and your investing time frame.

As we discussed earlier, investors with a longer-term investment horizon (e.g. a 35-year-old investing for retirement) can take more risk in the short term, simply because any peaks and dips in the market even out over time. Rather than being hit by a bad year or a bad month, they can focus on decade-long trends.

By contrast, those who are investing in shorter time frames, such as trying to save money in the next five years for a property, can't take the same risks. With that in mind, it is better for them to choose markets that might not have such a high return on investment, but that are more stable in shorter time frames.

6. Regularly monitor your investments

While one of the goals of long-term investing is to be able to put your money into your investments and let them grow over time with little active management, it is important to keep an eye on things.

Sometimes significant changes happen in certain markets that can cause massive price fluctuations, like regulatory changes, natural disasters and more. When these events happen, sometimes it's a good idea to switch up your investment risk. Keeping an eye on how your investments are performing helps ensure things keep moving in the direction you want.

7. Make decisions with your head - not emotions

Finally, make investment decisions based on logic, not emotions. Sometimes the markets are volatile. Sometimes there are new, exciting trends that everyone wants to put their money in.

More often than not, trends face and short-term volatility balances out. With this in mind, don't be tempted to buy or sell just because that's what everyone else is doing. When you make investment decisions, they should be based on solid data, and should be in alignment with your investment strategy and goals.

The best way to put all of these tips into practice is to start investing. But if you're a beginner, and you're not ready to start investing your money in the live markets, one way to get started is with a free demo account

With a demo account, you can access thousands of instruments, including Forex currency pairs, stock indices, commodities, cryptocurrencies and more via CFDs. This will give you a chance to see how the markets move, and it will give you a taste for the MetaTrader 5 investing platform, risk free!

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About Admiral Markets

Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.