Investing for Dummies – UK. Levene Tony

and then pick up on the investments that concern or interest you. For example, after reading Part I you may want to go straight to Part III to find out what collective investments are because, say, an advert about collective investments has caught your eye or a financial adviser has suggested one or two of them. Reading this section helps with your pension choices. But you may want to skip the chapter on buy-to-let properties because, say, being a do-it-yourself landlord is the last thought on your mind. Or the one on betting opportunities because they’re simply too scary.

Conventions Used in This Book

      I’ve tried to avoid jargon as much as I can, but know that the investment world is full of it. Like all professions and occupations, finance and investment have their own insider language that’s intended to mystify outsiders. When I do use the industry’s language in the text, I italicise the term and define it for you in an easy-to-understand way.

Foolish Assumptions

      While writing this book, I made some assumptions about you:

      ✔ You’re either completely new to investing or have limited information about it, and you want someone to help you understand what investing is really about and what types of investments are available.

      ✔ You don’t want to become an expert investor at this point in your life. You just want the basics – in informal, easy-to-understand language.

      ✔ You want to make up your own mind while using a guide through the investment jungle. You want enough pointers for you to risk only what you can afford to lose and for you to make a worthwhile return on your hard-earned cash.

Beyond This Book

      Find out more about investing by checking out the bonus content available to you at www.dummies.com. You can locate the book’s e-cheat sheet at www.dummies.com/cheatsheet/investinguk, where you’ll find handy hints and tips.

      Be sure to visit the book’s extras page at www.dummies.com/extras/investinguk for further information and articles.

Icons Used in This Book

      I’ve highlighted some information in this book with icons:

      

This icon points out useful titbits or helpful advice on the topic at hand.

      

I use this icon to highlight important information that you’ll want to keep in mind, so don’t forget this stuff!

      

This icon points out just that – a warning – so take heed. The investment world is full of sharks and other nasties. I don’t want you to lose your money to crummy schemes and criminals.

      

You’ll find this icon next to, well, technical stuff that you may want to skip. I’ve been sparing with this stuff because investment can be pretty technical anyway. (Note that even though you may want to skip this material on your first reading, and please feel free to, this info may be worthwhile coming back to later with your greater knowledge of the fundamentals.)

Where to Go from Here

      This book is set up so you can dive in wherever you want. Feel free to go straight to Chapter 1 and start reading from the beginning to the end. Or look through the Table of Contents, find your area of interest and flip right to that page. Or better yet, read Part I and then flip right to that page of interest. Your call.

      Wherever you go from here, if you find a piece of advice or a warning that you think applies especially to you, copy it down and then fix it to the fridge with a magnet, or pin it on a board.

      And as you read through this book, either in part or in whole, why not practise some dry-run investing? Buying a dummy portfolio using pretend money is always a good way of getting familiar with investment without the worry of losing money. You’ll find plenty of resources online to help you establish and plan your pretend portfolio.

Part I

      Getting Started with Investing

      

For Dummies can help you get started with lots of subjects. Visit www.dummies.com to learn more and do more with For Dummies.

       In this part ...

      ✔ Find out all the things you always wanted to know about investing.

      ✔ Discover what the term investment really means.

      ✔ Look at the five basic investment choices – the foundation of most portfolios.

      ✔ Discover how to increase the benefits and shrink the drawbacks of investment choices.

      ✔ Learn that the small print is vital in understanding what you invest in – ignore it at your peril!

Chapter 1

      First Steps on the Money Trail

       In This Chapter

      ▶ Understanding basic investment philosophy

      ▶ Discovering your own money make-up

      ▶ Looking at where you may be investing already (whether you know it or not)

      ▶ Getting familiar with five basic investment choices

      This chapter explains the first steps you must take in your investing ventures. But take heed: in this chapter (and throughout the book, for that matter) you need to think deeply about some personal matters, to understand yourself better and know where you’re going in your life and what makes you tick. In other words, you need to wear two hats – that of investor and that of self-examining philosopher. So be prepared for some tests that ask just what sort of person you are, what you want for yourself (and those around you) and what you’re prepared to do for it.

      And if you don’t run into a test, such as a risk profile from a financial adviser, that’s no bar to testing yourself. Many ‘risk profiler tools’ online can help, but no matter how you go forward, the final decisions you make are down to you and no one else.

      

Understanding the facts and mechanics of investment decisions is just a start. Knowing how to apply them to your own circumstances, and to those of your family and other dependents, is what will make your strategy succeed.

What’s Your Reason for Investing?

      This section is very basic, comprising just one simple Investing For Dummies test question: why did you buy this book? Chances are you probably did so for one of these four reasons:

      ✔ You have no money but want to make some. Most people fall into this category. You want to invest some money and accumulate funds but don’t know where to start. How you go about it depends on how well you can discipline