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Learn to invest in 6 steps

If you’re considering investing but don't know where to start, you've come to the right place.

Here’s a guide to help you get started:

1. Spread your money across different pots

Having a mix of savings and investments could help you reach your goals.  

Saving is a way of storing your money until you need it while earning some interest. While investing is about putting your money to work for you by taking calculated risks to try to make it grow. Although there are no guarantees, the value of investments can go down as well as up. 

Ideally, you should save for what's around the corner and consider investing for your long-term financial goals. 

Here are some examples: 

Save for unexpected costs

Before setting aside money for anything else, you should build up an emergency fund (3 to 6 months’ worth of living costs) as a safety net. Keep this in an easy-access savings account that you can dip into.

Save for things you plan to do in the next 5 years

Once you have your pot for unexpected costs, you could start saving towards your short-term goals, like a car or a big holiday.

Invest for things you plan to do in the long-term

For longer-term financial goals, such as a nest egg or holiday home, investing could help you get more from your money. 

Think of investing in the same way as buying a home. In the short term, the value of the property could fall, and you could lose money by selling before the housing market has a chance to recover. However, if you plan to stay put for many years, you hope the property will go up in value by the time you’re ready to sell.

Likewise, plan to invest for as long as possible – ideally for at least 5 years. This way, you’ll give your money the chance to recover from any dips in the market and give it a better chance to grow. Although there are no guarantees as the value of investments can go down as well as up.

2. Get the facts about investing

When you understand the facts about investing, you may feel more comfortable getting started.

You don’t need to be rich to invest

You can now start investing with £50 – whether you put down a lump sum and/or make regular payments. 

Investing doesn't lock your money away

You can withdraw some or all of your investment at any time, and the money will be in your account within a few days (depending on the provider). However, you should see investing as a medium to long-term commitment and invest for at least 5 years. 

Investing always comes with a degree of risk

The higher the level of risk, the more your money could grow over time – but also the more you could lose. You can decide on the level of risk you are comfortable with. 

Investing can be as simple or as complex as you make it

New to investing? Our ready-made portfolios could be an ideal place to start – where you choose the level of risk, and our investment specialists will take care of the rest. 

More experienced with investing? You might enjoy choosing from a wide range of funds or shares. Keep in mind, this can come with some risk and you would need to manage your investments yourself.

3. Decide how much risk you are comfortable with

There will always be some risk with investing, and you may not get back what you invest. Before you invest, you need to decide the level you feel comfortable with. 

Our ready-made portfolios each have their own level of risk, from 1 (the lowest) to 5 (the highest). This shows the investment's potential risk and reward. The higher the risk, the greater the potential reward (and a potentially bumpier ride).  

While you can never be certain of the return on an investment, here are a few things to consider: 

Be in it for the long-term

Market volatility doesn't always affect the long-term growth of your investment. So, look towards the future and focus on your long-term goals when markets are rough.

Stay invested if you can

It’s tempting to sell to avoid further loss when there’s uncertainty. But remember, the loss only becomes real if you sell your investment.

You should try to stay invested for at least 5 years to give your money the chance to recover from any dips in the market to potentially grow. Make sure you still have some money saved in an emergency fund to handle any unexpected costs.

Stay diversified to help spread your risk

Diversification means putting your money into a range of different investments. The idea is if one loses value, it could potentially be balanced out by other investments gaining in value.

Some investors like to pick and choose their own shares and funds. But if you’d prefer to leave that to the specialists, choose one of our portfolios which contain a ready-made mix of global investments.

Investment calculator

See how the value of an investment could change over time under different market conditions and with various levels of risk.

4. Keep calm and become a smart investor

When investing, our emotions and circumstances can influence our behaviour and decision-making.

For example, if the market suddenly drops, it can make you feel nervous. After all, it’s natural to want to keep your hard-earned money. At this point, you might want to sell your investment at once to take back control. But this is when you should make a smart investment decision instead of acting on impulse. 

6 ways to be a smart investor

  1. Focus on your long-term goals
    Think about your future goals and when you want to achieve these. Aim to invest for the long term and keep focused on your investment plan.
  2. Understand what you're investing in
    Take time to understand what you're investing in before you commit so that you're aware of how your investment could perform over time.
  3. Get more comfortable with the idea of risk
    Understand that your investment will go up and down in value over time. But, by having an emergency fund, you might not need to dip into your investment for anything unexpected.
  4. Invest regularly
    Try investing little and often instead of a lump sum. You'll average the price you buy, so you won't need to worry about finding the best time to invest.
  5. Don’t react to market news
    Seeing what's happening in the media can be scary, but it's normal for markets to have short-term reactions to global events.
  6. Check your investments – but not too often
    Resist the temptation to check your portfolio on a daily or weekly basis. Aim to check it once a quarter and, if necessary, make changes based on your plan.

5. Get familiar with portfolios

What is a ready-made portfolio?

A portfolio is a collection of funds that hold a mix of assets (such as shares, property, government bonds, and cash). If certain assets dip in value, others may increase – helping you spread your risk. 

Lots of people decide to invest in portfolios as they don’t have to choose individual funds themselves. They're also managed for you by a team of investment specialists. 

Portfolios spread your money across a wide range of investments so that if one or more goes down in value, it could potentially be balanced out by others gaining in value.

HSBC offers a range of ready-made portfolios, each with a different level of risk and potential reward. Consider how you feel about risk, then choose the portfolio with the risk level that you’re most comfortable with.

Choose your investment account

When you’re ready to invest, you can use a stocks & shares ISA or a general investment account (GIA) as your investment account. Eligibility criteria and fees apply.

A stocks & shares ISA is a tax-efficient way to build your portfolio.

You can invest up to £20,000 each tax year without paying any UK income tax or capital gains tax on any income or growth.

A general investment account is a basic account with no tax benefits.

The value of tax benefits will depend on your circumstances, and tax rules may change.

What are the fees?

There's an annual HSBC account fee of 0.25% to invest in one of our portfolios. Our fund manager, HSBC Asset Management, also applies an annual fee and other expenses that are deducted directly from the fund. The cost will vary depending on the portfolio and the risk level you choose, but it’s typically around 0.25%.

So, if you invest £1000 over a year and the HSBC service fee and the fund manager's annual fee are 0.25% each, your ongoing cost for the first year will be around £5.

You’ll find a breakdown of all the charges in the relevant ‘Costs & charges’ PDF when you apply.

6. Get started via our mobile app or online

Many customers find it easier to invest using the HSBC UK Mobile Banking app

Just log on and scroll down your account screen to select 'Investments'. You can start with a £50 lump sum and choose to set up regular investments.

Not quite ready to start? Learn more about portfolios and apply online.