Key Takeaways

  • Using an Investing platform involves building and managing your own investment portfolio without a financial adviser's assistance.
  • Understand your comfort level with investment risks, as it influences your investment choices.
  • Spread investments across different assets, sectors, and regions to reduce overall risk.
  • Regularly monitor and Invest. Stay informed about your portfolio's performance and contribute consistently to achieve your investment goals.

Investing Platforms

An investing platform, also known as an investment platform or online brokerage platform, is a digital service or website that allows individuals and institutions to buy, sell, and manage a wide range of financial assets, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), options, and more.

These platforms provide a user-friendly interface that enables investors to access financial markets, execute trades, and monitor their investment portfolios.

Investing can be confusing, especially for those who are new to the concept. However, with the right guidance you can take control of your financial future and build an investment portfolio that works for you.

Sunny Avenue explores the steps to becoming an investor, including understanding your risk tolerance, choosing the right platforms, and managing your portfolio effectively.

What is DIY Investing?

DIY investing, or do-it-yourself investing, refers to the process of building and managing your own investment portfolio without relying on the services of a professional financial adviser. At Sunny Avenue, we promote face-to-face advice, but it's not right for everyone. That's why, with this guide, we want to help those of you who want to go out there alone, and DIY investing does exactly that. By taking charge of your own investments, you can potentially benefit from the profits that companies make and the dividends they pay to their shareholders, growing your wealth and learning as you do.

Remember, an investment strategy should be seen as a medium to long-term commitment. There is risk involved in investing, and you may not get back what you put in. However, with careful planning and research, DIY investing can be a rewarding endeavour.

How Does DIY Investing Work?

With DIY investing, you get to choose your own platform, choose how much to invest, choose your own stocks, choose when to buy, when to sell, when to place orders, and when to cash out. DIY investing allows you to invest in stocks and shares in the palm of your hand.

Investing in stocks and shares can be a smart way to grow your money and achieve your financial goals. Whether you want to save for retirement, buy a house, or have a dream wedding, stocks can help your money grow over time.

Studies show that stocks usually provide better returns than keeping money in a regular bank account. On average, investments in stocks may grow by 3-12% per year, although there are no guarantees. 

Best DIY Investing Platform

DIY investing platforms now allow you to control your portfolio in the palm of your hand, by that, we mean using apps. Choosing the right platform shouldn't be a challenge, but there are a few factors to be aware of, such as fees, minimum deposit amounts, and the assets you can buy.

Hargreaves Lansdown - Best DIY Investing Platform

★★★★ 4

Hargreaves Lansdown is a FTSE 100 company and one of the most popular ISA providers in the UK.
Their user-friendly platform allows you to select shares and execute with ease. Their award-winning service simplifies investing, with personalised advice available.
  • Trading on the go
  • Simple platform which is easy for beginners to use.
  • They offer ISA's as well as basic share dealing accounts.
  • Free to open.
  • Ongoing portfolio charge of 0.45% is quite high in comparison with some providers.
  • Cost per trade as opposed to a monthly fee.

What is ROBO Investing?

ROBO investing, short for robotic investing or automated investing, is a modern approach to managing your investments using automated algorithms and technology. Instead of making investment decisions manually, ROBO investing relies on computer programs and algorithms to make investment choices on your behalf. This method is designed to streamline the investment process and make it more accessible to a wide range of investors.

ROBO investing platforms, often provided by online financial services, use data analysis, risk assessment, and your financial goals to create and manage a diversified portfolio of assets such as stocks, bonds, and exchange-traded funds (ETFs). The goal is to optimise your investments for your specific financial objectives while minimising costs and human biases.

How Does ROBO Investing Work?

ROBO investing begins with you providing information about your financial goals, risk tolerance, and investment preferences through an online platform or app. Based on this information, the automated system generates a personalised investment portfolio designed to help you achieve your objectives.

The ROBO advisor continuously monitors your portfolio and makes adjustments as needed to keep it in line with your goals and risk tolerance. This may involve buying or selling assets, rebalancing the portfolio, or adjusting the asset allocation. These decisions are made using predefined algorithms that take into account market conditions and your individual circumstances.

ROBO investing offers several advantages, including convenience, lower fees compared to traditional financial advisors, and the ability to access professional investment management without the need for extensive financial knowledge. However, it's essential to understand that, like DIY investing, there are inherent risks involved, and there are no guarantees of returns in the financial markets.ROBO advisors can be a suitable option for investors looking for a more hands-off approach to managing their investments while benefiting from automated strategies and technology.

Best ROBO Adviser Platform

Choosing the right Robo platform shouldn't be a challenge, but there are a few factors to be aware of, such as fees, minimum deposit amounts, and the assets you can buy.

Moneyfarm - Best ROBO Adviser

★★★★ 3.6moneyfarm

Moneyfarm is a robo-adviser – founded in Italy in 2012 and launched in the UK in 2016.
Unlike a DIY investment platform, which lets you select your own investments, Moneyfarm will place you in a portfolio tailored to your risk appetite. They offer a complete hands-off approach with charges maxing at 0.75% annually. However, the more invested, the lower the fee.
  • Invest in ISA's, Pensions and general investment accounts.
  • Simple platform which is easy for beginners to use.
  • Free to open.
  • Ongoing portfolio charge of 0.75% is quite high in comparison with some providers.
  • Minimum Investment of £500.

What is an Investment App?

An investment app is a software application designed to facilitate and simplify the process of investing in various financial assets, such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs). These apps are typically available for smartphones, tablets, or web platforms, making it convenient for users to manage their investments on the go.

Investment apps offer a range of features and services, including portfolio tracking, real-time market data, research tools, educational resources, and the ability to execute buy and sell orders. They cater to both experienced investors who want to actively trade and beginners looking for an easy and accessible way to start investing.

How Do Investment Apps Work?

Investment apps work by providing users with a user-friendly interface to access financial markets and manage their investments. Here's how the process generally works:

  • Registration: Users download the investment app, create an account, and provide personal information. They may also need to complete identity verification processes to comply with regulatory requirements.

  • Funding: Users link their bank accounts to the app, allowing them to transfer funds for investment purposes. Some apps may have minimum deposit requirements.

  • Investment Selection: Users can browse and choose from a variety of investment options, including stocks, bonds, ETFs, and more. Many apps offer educational resources and research tools to help users make informed decisions.

  • Portfolio Management: Once investments are made, users can track the performance of their portfolio within the app. Some apps offer automated portfolio management features that help users maintain a diversified and balanced investment portfolio.

  • Trading: Users can execute buy and sell orders for their chosen investments directly through the app. Some apps offer commission-free or low-cost trading.

  • Monitoring and Analysis: Investment apps provide real-time market data, charts, and analytics to help users assess their investments' performance and make adjustments as needed.

Investment apps are designed to cater to a wide range of investors, from beginners seeking simplicity and guidance to experienced traders who want advanced tools and features. The choice of an investment app often depends on an individual's investment goals, preferences, and level of expertise. It's important to review the fees, features, and security measures of different apps before selecting one that aligns with your financial needs.

Best Investment App For Beginners

If you're inexperienced and looking for a way to ease your way in, an investment app is a good way to start. 

FreeTrade - Best Beginner Investing App

★★★★ 4best investing app for beginners

Freetrade is an excellent platform for beginners who want to start investing in stocks and exchange-traded funds (ETFs).
The platform is easy to use, and its simple design makes it perfect for those just starting out. 
  • Trading on the go, via mobile app.
  • Simple platform which is easy for beginners to use.
  • ISA's as well as basic share dealing accounts available.
  • Free to open, including a free monthly plan.
  • A free share worth up to £100 if you use the below link to open.
  • Ongoing portfolio charge of 0.45% is quite high in comparison with some providers.
  • Not available on web browser.
  • A limited number of shares available. 
  • To open an ISA, you must pay the £5.99 monthly Plus plan.

Tips for Investing

We aren't going to send you out to the big bad world without at least a few pointers and considerations. Before you get started deciding how much you should invest and by what method think carefully about the following:

Your Finances

Review your current financial situation. Start by analysing your income and expenses to determine how much money you can realistically afford to invest. It's recommended to have an emergency fund of at least three to six months' worth of living expenses, so you won't be forced to sell your investments early in case of unexpected expenses or a reduction in income.

Your Investment Goals

One of the keys to successful DIY investing is having a clear understanding of your investment goals. Are you investing to grow your wealth, save for retirement, or fund a specific financial goal like a child's education? By assigning a specific objective to your investment strategy, it can help you stay focused and make you less likely to dip into your investments.

The time needed to reach your goal will also affect the level of risk you can take. For example, if you're saving for a short-term goal, you may want to be more cautious with your investments, while a long-term goal like retirement may allow for a higher risk tolerance.

Assess Your Risk Tolerance

Risk and reward go hand in hand when it comes to investing. Higher returns may sound appealing, but they often come with a higher risk. It's essential to consider your goals, timeframes, and the balance between your need for returns and your ability to withstand potential losses.

Think about how you would feel if your investment decreased in value. If this would cause anxiety, you may be more comfortable with less risky investments and accepting lower returns. Understanding your risk tolerance is crucial for selecting the right investments for your portfolio.

Diversify Your Investments

Diversification is a key principle in investing, as it helps to reduce the overall risk in your portfolio. By spreading your money across different investments, sectors, and regions, you can minimise the impact of any single investment performing poorly. Diversifying your portfolio can help to smooth out returns and maximise your potential for growth.

Understand Investment Fees

With DIY investing in the UK, it's important to consider the fees involved. These may include account or platform fees for using the investment platform, trading fees for buying or selling securities, ongoing charges for holding investment funds, and stamp duty on stock purchases. Comparing these fees across different providers and platforms helps you choose the most cost-effective option, ensuring that you get the best value for your investments.

Utilise Tax-Efficient Investment Options

When investing, consider the tax implications of your investments. A popular tax-efficient investment option is a stocks & shares ISA. This account allows you to hold your funds or shares without incurring UK income tax or capital gains tax on any income or capital gains. The annual subscription allowance for the 2022 to 2023 tax year is £20,000, which covers investments made to stocks & shares ISAs and other types of ISAs.

When choosing your DIY investing platform, you will be able to choose Stocks and Shares ISAs as an option, all you need is your National Insurance number.

It's important to remember that the value of any tax benefits depends on your individual circumstances, and tax rules may change in the future.

Choosing Your Investing Strategy

There are several ways to invest in the markets, and your choice of strategy will depend on your personal preferences and risk tolerance. Some of the common investment strategies include:

Investing in Individual Stocks

If you enjoy researching companies and analysing financial reports, investing in individual stocks may be a suitable option for you. When you buy a share, you're buying a stake in a company, and the value of your investment can rise or fall depending on the company's performance and market conditions. While investing in stocks can offer higher returns, it also carries a higher risk than other strategies. Common advice says not to put all your eggs in one basket, if you invest in individual stocks, this is effectively what you will be doing.

Investing in Funds

Funds can be an attractive option for beginners or those who prefer a more hands-off approach. You can buy units in a ready-made basket of investments, spreading your risk across multiple assets. There are two main types of funds: active funds managed by a professional fund manager and passive funds that track a given index. Both types of funds are assigned to different risk profiles, allowing you to choose funds that align with your risk tolerance.

Invest Regularly and Monitor Your Portfolio

Investing consistently and regularly can help to build your investment portfolio over time. Setting up a direct debit or automatic investment plan can ensure that you're continually contributing to your investments, even if it's just a small amount each month.

Embrace the DIY Investing Journey

Monitoring your investments is important for making necessary adjustments and potentially increasing your investments to meet your goals. Keep an eye on your portfolio's performance. However, try not to overreact to short-term market fluctuations. Long-term investors often succeed by staying patient and focused on their overall objectives, allowing them to navigate through market ups and downs.

And, if you're unsure about which investment strategy is best for you, consider seeking personalised investment advice from a professional. While this option may come with additional fees, it can provide valuable guidance and help you build a solid foundation for your investing journey. If you're not sure where to get started with investment planning, consider using the Sunny Fact Find. We will find the best-suited adviser for your needs. Your adviser will contact you to discuss how they can help, you decide how to proceed.

Looking For Financial Advice?

If you're planning on investing to make your money work harder for you, you may be wondering how to best manage it... Now is a good time to seek financial advice. Financial advice helps you to review your retirement, tax, and investment needs.
We can help you find a financial adviser to offer you the very best financial advice. Complete our Sunny Fact Find form to provide us a bit more detail about your circumstances and we'll find the best-suited adviser for your needs.
Your appointed adviser will contact you to discuss how they can help, you decide how to proceed. This service is free.

Now that you have a better understanding of investing and the steps involved, it's time to embark on your investment journey. Whether you choose to invest in individual stocks, funds, or seek professional advice, the key is to remain focused on your goals, diversify your investments, and stay patient as your portfolio grows over time.

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