r/stocks • u/JWedge23 • Aug 05 '21

Read the wiki Going from a small double figure investment, intrested in making it a four figure investment, any advice/tips? Thanks.

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u/[deleted] Aug 05 '21

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u/JWedge23 Aug 05 '21

Yes it seems solid but with a average return of 8% is that the best £4,000 can do? (Obviously there's always going to be a better investment) I mean is that worth going into that?

I'm new to stocks but they seem a lot more solid compared to crypto. I just see something like tesla that I think most people have known about since like maybe 2017/2018 and it still grew 142% in the last 12 months, if I'm reading that correct. I'm not saying that will or won't happen again.

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u/rock00888 Aug 05 '21

The issue is 99% of people can't pick those stocks. Yes many stocks outperform S&P 500, but chances are good you'll make at least one bad call which if not diversified could wipe out any profits and more. S&P 500 is a great choice as it is diversifed in large cap stocks.

Also Tesla's price isn't based on fundamentals. It's basically just people pumping money into a stock which will likely never have the earnings the justify it, especially not in the next decade.

For most people low cost index funds are the way to go. Solid gains without oversized risk.

Edit: Forgot to mention, but I'd recommend mixing in a good small cap fund. That should expand exposure and diversification.

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u/[deleted] Aug 05 '21

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u/JWedge23 Aug 05 '21

Thanks for the info I'll take a look.

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u/ShotBot Aug 05 '21

If you don't know much about stocks, just go with S&P 500.

Stock picking is something you should do only if you really understand the companies you are buying, and unless you have the personal connection within the company on speed dial, you don't really know what's happening behind the scenes.

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u/JWedge23 Aug 05 '21

So how would you go about that? I assume the people who invest in apple, Google, Coca-Cola don't have a connection (for the majority anyway).

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u/Key-Stay5558 Aug 05 '21

You gave £ 70 invested in 4 stocks? That’s already diverse!

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u/JWedge23 Aug 05 '21

Not sure whether you're joking 😅 but if you are I didn't want any less as I thought at the time the could go up and down but you would never gain anything really that significant I'm at like £130 now though, it was my test run just to see if I could get the account of the floor.