For some investors, the thrill of investing in individual stocks is appealing, fun and potentially profitable.
There are even ‘fun’ games where you play with fantasy money and see if you can beat the market. ‘The Other Adam’, regular reader and frequent commenter sent me a link to the Telegraph’s ‘Fantasy Fund Manager’ page today, and a few years ago I played around with investing £100,000 at Bullbearings, a fantasy stock market site.
However, I’m not really a fan.
I’d rather spend my time reading, writing, cycling or singing rather than buying and selling shares and pouring over earnings reports and industry press releases.
In fact, one of the reasons I wanted to set up Magical Penny was to evangelise that you too can take advantage of the power of compounding investment returns without having to dedicate hours and hours to researching companies.
Whilst it’s definitely worth learning the basics of investing you don’t have to spend hours and hours researching, creating and managing your investment portfolio. As long as you are consistently saving for the long term you can get to a point pretty quickly where your road to wealth is set on auto-pilot and, barring unfortunate events, and the destination inevitable!
The ‘Set it and Forget it’ strategy
Once you have set up your investments it doesn’t take too much time to maintain. Certainly you shouldn’t be ignoring the performance of your investments completely but it really does not take much time to start building a nest-egg for your future.
Here’s one simple way to grow your pennies in a nutshell:
- Find a small consistent amount you can save each month.
- Make it automatic so you don’t need will-power to maintain or make excuses why this month is not a month for investing.
- Do a little reading about unit trusts.
- Choose a few with low fees.
- Check how you’re doing every so often.
- Get on with your life.
If you’ve been reading Magical Penny for a while I hope you’re at least around step 3 and preparing for the next steps to grow your pennies.
If you are more interested in the fun of individual share investing then I can certainly recommend the brilliant Monevator blog.
You may have noticed there are lots of links in this post. You can click on them all apart this one.