Right here’s how a inventory market newbie may get stepping into 2025 with £260!

May 2025 be the 12 months to start out investing within the inventory market, even when solely on a restricted funds? I anticipate many individuals will likely be asking themselves that this month – and, as occurs yearly, a few of them will find yourself doing nothing between now and the tip of December!

However it needn’t take some huge cash to turn into a inventory market investor. Right here is how somebody may begin shopping for shares with a spare £260 this week.

Beginning now versus procrastinating

There’s at all times a motive (or excuse) to place off beginning, even when it may be executed with a reasonably small amount of cash. Perhaps ready for extra data, a greater wanting market, and even worry of the market crashing.

I feel data is useful, so it undoubtedly is smart for somebody to familiarize yourself with how the stock market works earlier than they start to take a position.

However I feel there are good causes to start out sooner moderately than later. In spite of everything, I take a long-term approach to investing and assume many buyers would profit from having an extended not shorter timeframe out there to them.

Don’t attempt timing the market

However what in regards to the different potential concern I discussed, that there could also be a stock market crash across the nook? Which will at all times be true, within the sense that the market will crash once more in the end, though none of us is aware of when.

However I feel it will be extra worrying if an investor sought to ‘purchase the market‘. As my very own method focuses on shopping for a diversified choice of individual shares to buy, it bothers me much less.

Even in a broadly overvalued market there might be some bargains – and truly I feel the UK market presently affords fairly a number of such discount alternatives.

With £260, diversification could appear tough – however it’s nonetheless potential to spend money on, say, a few completely different shares.

On the point of make investments

Earlier than truly shopping for any shares, an investor wants a approach to take action. With simply £260, minimal charges and commissions may rapidly eat into the cash when shopping for and holding shares.

So I feel it is smart to take time to check completely different share-dealing accounts and Stocks and Shares ISAs. Completely different buyers every have their very own monetary state of affairs and aims.

In search of shares to purchase

When on the lookout for shares to purchase, I feel most new buyers may do worse than to attempt to hold it easy. By that, I imply sticking to massive corporations with confirmed enterprise fashions they perceive.

However discovering the suitable firm is just not sufficient for profitable investing. It’s also essential to search out it on the proper share value. One share I feel buyers ought to think about is Aviva (LSE: AV).

The FTSE 100 insurer has a robust enterprise due to excessive, resilient demand for insurance coverage companies. It has robust manufacturers and a really massive buyer base that may assist it capitalise on that.

The corporate has been elevating its annual dividend per share since a minimize in 2020 (no dividend is ever assured to final). It yields 7.3%. So half the £260 put into Aviva shares would hopefully earn round £9 a 12 months of passive income.

One danger I see is the proposed merger with Direct Line main rivals to focus on clients by reducing costs. That would harm income for Aviva.