I’d start buying shares with this pair!

Our writer uses his stock market experience to consider how he’d start buying shares for the first time if he had his time over again.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young Caucasian woman with pink her studying from her laptop screen

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

One thing that can be daunting about trying to start buying shares is simply deciding exactly where to begin.

With thousands of different companies listed on the British and American stock markets alone, the options can sometimes seem bewildering.

But if I was about to start investing for the first time, here are a couple of shares that would be on my shopping list.

Should you invest £1,000 in Ishares Public Limited Company - Ishares Core Ftse 100 Ucits Etf right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Ishares Public Limited Company - Ishares Core Ftse 100 Ucits Etf made the list?

See the 6 stocks

Unilever

Consumer goods company Unilever (LSE: ULVR) has products in the homes of most people in Britain – and far beyond.

Focused on everyday products like shampoo and laundry detergent, the business benefits from strong ongoing demand from customers. Even when there is a recession, people wash their hair.

But lots of other companies also compete in these areas. How does Unilever set itself apart?

One way is by building premium brands such as Dove, often using proprietary technology and compelling advertising. That helps build consumer loyalty, meaning Unilever can charge a price premium even for mundane products.

Created with Highcharts 11.4.3Unilever PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

That does not mean Unilever is risk-free: no share is.

It faces challenges such as ingredient inflation, spinning off its ice cream division without disruption to the rest of the business and shifting consumer tastes. All could hurt revenues and profits.

But overall I see this FTSE 100 member as a comparatively low-risk business.

It pays a quarterly dividend and yields 3.9%. So if I started buying shares by putting £1,000 into Unilever, I ought to earn £39 in dividends each year, if it maintains the payout.

That is never guaranteed: dividends can be cut. Then again, if the business does well, I actually expect Unilever to increase its dividend.

City of London Investment Trust

But while I might start buying shares by investing in Unilever, I would not only do that.

Why? A simple but powerful risk management technique for investors large and small is diversification.

That basically means not putting all my eggs in one basket.

After all, even the most promising looking business can run into unforeseen difficulties that hurt its business performance and its ishare price.

Diversifying can seem tricky if investing a fairly small amount of money. One solution can be buying shares in an investment trust. That is a pooled investment vehicle, meaning its managers buy different shares and I can effectively get exposure to them by buying a share in the trust.

Blue-chip focus

An example is City of London Investment Trust (LSE: CTY). This trust invests in dozens of mostly British blue-chip companies.

There are risks to a trust like this. Management fees eat into returns over time. If managers make the wrong calls, the trust may fare poorly.

In fact, in the past five years, City of London shares have lost 4%.

Created with Highcharts 11.4.3City Of London Investment Trust Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Set against that, though, is a 5% dividend yield – and a track record of dividend increases stretching back to the year England lifted the World Cup! Remember, though, that past performance is not necessarily a guide to what happens next, in the stock market as well as at Wembley.

The reason I would start buying shares by investing in a trust like this is because I feel following its progress with flesh in the game ought to help me learn about how the stock market works, while maintaining a risk profile I am comfortable with.

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Ishares Public Limited Company - Ishares Core Ftse 100 Ucits Etf right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Ishares Public Limited Company - Ishares Core Ftse 100 Ucits Etf made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Man smiling and working on laptop
Investing Articles

3 FTSE 250 shares with low P/E ratios and sky-high dividend yields!

Searching for the best bargains that London has to offer? Here's a handful from the FTSE 250 I think are…

Read more »

Investing Articles

Why is Apple stock lagging the S&P 500 in 2025?

Our writer is wondering whether now might be an opportune time to snap up shares of the largest company in…

Read more »

Investing Articles

Here’s how an ISA investor could build a £20k passive income with UK shares

Looking to make a five-figure passive income in retirement? Here's how a blend of UK shares and cash savings could…

Read more »

Investing Articles

£10,000 in savings? Here’s how an investor can target £3,560 in annual passive income

Paul Summers explains how an investor could target making thousands of pounds in passive income by holding great dividend stocks…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Up 490%, Lion Finance Group is a new name on the FTSE 250… but what is it?

Many investors won’t be familiar with Lion Finance Group, but the FTSE 250 stock has surged 490% over five years.…

Read more »

Growth Shares

I think this is the most punished FTSE stock in the market right now

Jon Smith talks through a FTSE company that has endured problems but is one he believes has a brighter future…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

Stock market correction! 1 growth share down 53% to consider buying now

This writer highlights a growth stock that has hit a rough patch in recent weeks. Here's why it might be…

Read more »

Investing Articles

Here’s why the Tesco share price has dropped 18% in a month!

Tesco's share price has lost nearly a fifth of its value since mid-February. Is this FTSE 100 dividend stock now…

Read more »