How to start investing

Heard about the benefits of investing, but don’t know how to start investing yourself? We’re taking investing back to basics to explain what it is, why you should do it, and how to start investing in stocks, shares and funds in the UK.


What is investing?

Investing is when you buy assets like stocks, shares and funds with the hope that they increase in value over time. The goal is to sell whatever you bought for more than you bought it for – which means you’ll earn a profit. For example, if you bought shares worth £100 and later sold them for £200, your profit would be £100.


Why should you invest?

The main reason to start investing is because over the long term, investing returns have typically beaten the returns of cash savings. So, while investing might seem intimidating at first, seeing the returns over time will help to build your confidence – and you might even wonder why you didn’t start investing sooner.

For example, if you’d invested £1,000 in the Moneybox ‘Balanced’ Starting Option at the end of 2013 and left it alone for 10 years, it would’ve been worth over £2,300 by the end of 2022 – an average annual return of 8.9%.* Saving your money in cash over the same period of time would’ve returned just £1,145 by comparison. 

And remember, while we can use historic performance to show how markets have performed in the past, this data is not always a reliable guide to future gains.


How to start investing in stocks, shares and funds in the UK

The great news is that there’s no need to restrict yourself to UK-based companies – you can also invest in US companies from the UK. Different websites will tell you that they know the best thing to invest in right now – but remember, it’s difficult to predict how markets will behave in the future. For example, no one predicted that inflation would rise above 10% in 2022, or that Russia would invade Ukraine and how the markets reacted.

A much more effective investing technique – especially if you’re debating how to start investing – is to invest small amounts of money regularly, which is more commonly known as ‘pound cost averaging’. And, you’ll want to make sure that your money is spread over a variety of different investments, including stocks, shares and funds. This is called diversification.

Learn more about investing with a Moneybox Stocks & Shares ISA


How to start investing

If you’re wondering how to start investing, the first step is to decide what you want to invest in. Some of the most common investments include stocks, shares and funds. Stocks and shares let you invest in a single company at a time, while funds let you invest in a collection of different companies with a single investment.

If you invest with a Moneybox Stocks & Shares ISA, you’ll get exclusive access to our full range of US stocks, plus all of our funds. This means you can invest in companies like Amazon, Apple and Tesla, as well as funds that track the healthcare sector, the US economy and the UK economy. And, the great thing about investing with a Stocks & Shares ISA is that you won’t pay any tax on any of your gains! 

Open a Moneybox Stocks & Shares ISA


*Returns are based on the Moneybox Balanced Starting Option and don’t include fees. Remember, investing carries risk, and you might get back less than you initially invested. 

All investing should be long term (min. 5 years). The value of your investments can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and is subject to change.