• Katy Stephenson

How To Invest In A Stocks and Shares ISA

I'll be the first to say I thought investing in a Stocks and Shares ISA was going to be a lot easier than it actually was. What I thought would be a half hour job quickly developed into a whole day of research which is exactly why I thought I'd sum up the process of investing in a Stocks and Shares ISA for you.

investing in stocks and shares isa

Robo-advisor vs DIY

First things first, you need to decide whether to opt for a robo-advisor or build your portfolio yourself. Obviously there are pros and cons to both but for me, it was easier to go with a robo-advisor to take care of my Stocks and Shares ISA whilst I focused on my Freetrade shares on the side. I was worried that being new to the whole stocks and shares thing meant I'd get overwhelmed and make mistakes so it put my mind at rest knowing there was an expert out there managing my investments.

Weigh up the risk

If you go down the robo-advisor route, you'll have to take a questionnaire to find out your investment goals, timescales and risk tolerance so they know what they're dealing with.

The higher your appetite for risk, the higher potential return but also the higher chance of you losing money. However, if you are looking to leave your money in the ISA for 5-10 years, then it is likely that an investment gone wrong (AKA the price has dramatically plummeted) could bounce back by the time you wish to withdraw.

If you manage your portfolio yourself, one way to spread the risk is by investing in a range of companies in different countries and industries

Find an ISA

Now you know whether you're building your portfolio yourself or relying on a robo-advisor, you need to find the right ISA. You'll need to consider:

  • What investments are available

  • How much guidance they offer

  • What fees you'll need to pay

  • Whether it's covered by the FSCS

I found Money Saving Expert and Which? helpful to narrow down my search but eventually went with Nutmeg based on their reviews and app, although, it was a close call with Wealthify. I won't lie, it took me hours to come to a conclusion as many ISAs look the same but in the end, I'm really pleased I went with Nutmeg and I've had a great experience with them so far.

Deposit your money

Remember, whenever you invest in the stock market, you risk losing your money and nothing is guaranteed. So, you need to be willing to lose however much you deposit each month (although, the chances of losing it all are extremely low but let's not jinx it).

Some accounts allow you to invest as little as £1 to get going and others require a bigger lump sum which you'll need to bear in mind when choosing which ISA you want to go for.

Check in

If you've opened a DIY Stocks and Shares ISA then it goes without saying, you'll have a lot more ongoing work to do than if you've got a robo-advisor. Keep track of your investments and the market and be prepared to make wise decisions with your end goal in mind.

My best advice for anyone in the same boat as me with a robo-advisor is to just leave it alone as much as possible. A Stocks and Shares ISA is a long term investment so refrain from having a nosey too often.

I'm really pleased I decided to invest in a Stocks and Shares ISA and a robo-advisor was definitely the right choice. Maybe in the future, I'll become more confident in managing my portfolio and take it over!

Do you have any tips on how to invest in a Stocks and Shares ISA?

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