How I’d invest £500 right now in UK shares

first_img Rupert Hargreaves | Saturday, 7th November, 2020 Simply click below to discover how you can take advantage of this. £500 saved and want to get started with an investment portfolio? There are plenty of different investment strategies to use. However, I wouldn’t invest directly in UK shares just yet as execution costs could eat up a substantial proportion of the investment.Although some online stockbrokers now offer commission-free trading, other costs, such as stamp duty, which is usually set at 0.5% of the transaction value, and the spread between the buying and selling prices on offer, can’t be avoided.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Then there’s the problem of diversification. A lump sum of £500 isn’t really enough to build a diversified portfolio effectively. Instead, an investor might end up owning just one or two stocks, which can be quite risky. Luckily, there are plenty of other ways of investing a small lump sum in the UK shares. Building a portfolio of UK sharesThe most straightforward way to build a diversified portfolio of investments is to buy a fund. There are thousands of different funds on the market, many of which claim to follow different investment strategies. This crowded universe may seem confusing at first. To overcome the bewildering array of funds on offer I tend to focus on passive tracker funds and investment trusts. Passive tracker funds replicate the performance of a stock index, such as the FTSE 100. All the fund manager has to do is duplicate the underlying stock index. There’s almost no risk the fund manager will pick the wrong investments. What I’d keep an eye on however, is cost. The best passive tracker funds on the market charge fees of less than 0.1% a year. As they all do the same thing, there’s no need to pay any more than this basic charge. Owning a passive tracker fund is one of the best ways to invest a small lump sum. Transaction costs and fees are usually minimal, and it provides instant diversification. Investment trust optionsFocusing on investment trusts is another strategy I use. Investment trusts are different from passive tracker funds because they usually have an investment manager who picks assets to buy and sell. They can also invest in other asset classes.Two of my favourite investment trusts, Personal Assets Trust and RIT Capital Partners, invest in assets such as gold, hedge funds and private businesses, for example. It would be difficult for me to own a similar portfolio of investments without teaming up with other investors.  If one’s comfortable buying an investment trust, such as the two listed above, then this could be an attractive strategy to invest £500 right now in UK shares. If not, then I’d choose to buy a passive tracker fund as this would give access to the market with minimal fees and research, and maximum diversification.  Rupert Hargreaves owns shares in Personal Assets Trust. The Motley Fool UK has no position in any of the shares mentioned. 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. “This Stock Could Be Like Buying Amazon in 1997” I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Sharescenter_img How I’d invest £500 right now in UK shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address See all posts by Rupert Hargreaveslast_img read more

Continue reading