Getting Started with Investing: Lessons from Our First WIN* Event

The idea behind our Widening Investor Network (WIN) events is simple: investing can feel intimidating, jargon-heavy, and exclusive, and it should not be any of those things. Our first WIN event brought together a financial planner, a senior figure from one of the UK's largest investment platforms, and a professional fund manager to help people take their first steps. Here is what they had to say.

Investing Is Not the First Thing on the List

One of the most reassuring messages of the evening was that investing does not have to come first. Before you think about building a portfolio, there are more pressing financial foundations to get in place.

Think of it as a hierarchy of priorities. At the base is managing debt, particularly high-interest debt that threatens your financial stability. Not all debt is bad, mortgages and student loans can both be thought of as investments in your future, but personal debt should be understood and kept under control.

Next comes protection. Insurance is boring right up until the moment you need it. A burglary, an accident, a health crisis: these events can derail finances that were otherwise on track.

Then comes a cash buffer. Three months of essential expenditure (not your gross income, just what you need to cover the bills) is a reasonable target. This sits in a bank account and is there for the boiler that breaks, the car that needs replacing, or the job that does not work out.

After that, workplace pension contributions. This is where the compounding magic starts, and it is genuinely the closest thing to free money that exists in personal finance. Your employer contributes, the government contributes through tax relief, and all of it starts growing.

Only once those foundations are in place does investing in a stocks and shares ISA or broader portfolio really make sense. The point is not that investing has to wait forever, it is that investing without a financial buffer underneath it can force you to sell at exactly the wrong moment.

Define Your Goals Before You Start

The most common mistake new investors make is not thinking about why they are investing before they begin. If you do not know what you are saving for, you do not know when you will need the money, and that makes it far too easy to panic and pull out during a downturn.

Are you saving for a house deposit in three years? That money should not be in equities. Are you saving for retirement in thirty years? Equities are almost certainly where you should be. The timeline changes everything.

A good rule of thumb: if you will need the money within five years, do not invest it in the stock market. The short-term risk outweighs the potential return.

Invest. Do Not Speculate.

There is a significant difference between investing and speculating, even though they can look similar from the outside.

Speculating is hearing that a particular company's shares have risen dramatically and putting money in hoping they will keep going. Investing is putting money to work for the long term in a diversified way, accepting that the path will not be linear, and letting time do the heavy lifting.

The question to ask yourself before buying any individual company is not "do I think this is a good company?" It is: "do I have information or insight that the entire collective intelligence of the stock market has missed?" In most cases, the honest answer is no. That is not a weakness, it is just the nature of markets.

The more productive approach is to stop trying to pick winners and simply buy the whole market cheaply.

Active vs Passive: What the Jargon Actually Means

You will hear these two terms constantly once you start reading about investing.

A passive fund tracks an index, meaning it automatically holds all the companies in something like the FTSE 100 or the S&P 500 in proportion to their size. There is no human making decisions. It is cheap to run and ensures you will never miss out on a big winner in that index, because you already own a slice of everything in it.

An active fund is run by a professional investor who makes decisions about which companies to hold and in what quantity. This can either outperform the index (great) or underperform it (less great), and you typically pay higher fees for the human expertise.

Neither is inherently better. Both can serve a purpose. A passive fund is an excellent starting point for most investors. An active fund might be worth considering if you have a specific goal in mind, want exposure to less mainstream asset classes such as smaller companies, or want a certain level of income from your investments.

Why Boring Companies Can Make Great Investments

UK companies are often overlooked in favour of the more glamorous names from the US. But some of the best long-term investment stories are deeply unglamorous businesses doing simple things exceptionally well.

Galvanising street furniture (dipping it in a zinc bath to stop it rusting), or processing pork and chicken for supermarkets: not exactly the stuff of financial thrillers. But well-run, consistently reinvesting businesses like these can generate extraordinary returns over twenty years precisely because they are boring, dependable, and overlooked by investors chasing the next big thing.

The lesson: returns are not reserved for the companies with the best stories. They belong to the businesses that keep reinvesting and compounding year after year.

Things Go Wrong Too

No honest discussion of investing is complete without acknowledging this. Even excellent companies can lose most of their value because of factors entirely outside their control: a change in the interest rate environment, a war, a global pandemic, regulatory shifts.

The answer to that risk is not to avoid investing. It is diversification and patience. Do not put all your eggs in one basket, and do not check your portfolio every day.

Perhaps the most striking statistic of the evening: research suggests that some of the best-performing self-managed portfolios on retail investment platforms belong to people who have died, or who have simply forgotten their password. They are not making reactive decisions. They are not selling in a panic. They are just letting their investments sit and compound.

Valuations Matter More Than You Might Think

For those ready to go a little deeper, valuation is worth understanding. The price-to-earnings ratio (PE) tells you how much you are paying for every pound of company earnings. Lower generally means better value.

At the time of the event, the UK market was trading at a PE of around 11. The US market was at around 20. History suggests that starting at a lower valuation significantly improves the returns you are likely to achieve over the following decade. That does not guarantee anything, but it stacks the odds in your favour.

The UK market also offers a dividend yield of around 3.5%, compared to closer to 2% in the US. That income, reinvested over time, compounds meaningfully.

Who Actually Invests? More People Than You Think

One of the more striking themes of the evening was the number of myths around who investing is for.

It is not just for older men in the City. Women who do invest tend to hold more in their ISA on average than men, not because they contribute more but because they tend to trade less and let their money grow. Younger people in their 20s are already practising better financial habits than their reputation suggests, with meaningful proportions of them building savings. And strong investment activity is not confined to London and the South East, even if the data does show higher concentrations there.

The barriers are real: the gender pay gap, childcare costs, and lower salaries all make it harder for some groups to build investment wealth. But the barriers are not about capability.

Where to Actually Start

If all of this has been useful but you are still not sure what to do next, here is the practical summary:

Check you are enrolled in your workplace pension and contributing enough to get the full employer match. That is the single highest-return action available to most people.

Build a cash buffer of around three months of essential spending before committing to anything else.

When you are ready to invest, a low-cost tracker fund covering the global market (such as an MSCI World ETF) is an excellent starting point. Set up a regular monthly contribution, even a small one, and let it run. You do not need to time the market. You need to be in the market.

If you want to add something more specific over time, a satellite holding in a particular region or theme you feel strongly about can sit alongside that core position.

And if things start to feel complex, that is the point at which a regulated financial planner is worth considering. The value of good advice is not just in picking investments. It is in building a plan that fits your actual life.

Law Debenture's WIN (Widening Investor Network) events are designed to provide a welcoming space for those at the start of their investing journey. 

Legal disclaimer: We are not authorised to give financial advice. We recommend that you speak to a stockbroker or independent financial adviser before investing. To find out more about these professionals you can visit the Association of Investment Companies website where they have a detailed guide. 

Please remember that past performance is not a guide to future performance and that the value of an investment and the income derived from it can fall as well as rise and that you may not get back the amount originally invested. Nothing on this website should be construed as an investment recommendation or investment advice.