investing in stocks and shares

[rja211077]

With the markets very low, I guess it's a good time to invest if one has a bit of spare cash? Can anybody recommend a 'minimum' amount that you need to make paying the commission, etc, worthwhile? Also, can anybody recommend the best way of starting up for a novice (what type of broker is best, what sector should i invest in to start with) or is it just better to invest in market-linked things like ISAs rather than in shares directly? I have maybe �1000 max to spare - but possibly don't want this locked up in an ISA for five years or whatever the min period is

[moonacre]

Investing in the stock market is risky - as many people will be able to tell you from bitter experience! The best minimum amount will depend on the charges; for example if you invest �100 and it costs you �20 in dealing charges and spread differences then the shares will have to increase by 20% + inflation before you break even (not counting dividends) and that's only the paper value - you then have to sell them at more cost. Unless you're an expert AND are feeling lucky, don't invest in one sector. Are you a 40% tax payer? If so then ISAs have some advantages. You are not locked into ISAs for any period. You can sell at any time but may then be liable to tax. �1000 may be better spent on reducing any debts you have (including mortgage) or spending it on your house if you have one to increase its value. If you really want to invest then consider unit trusts which spread your money around. Buy online to keep costs low and rather than buying all at once (sad if you get your timing wrong) buy with a set amount each month. This takes advantage of what is called average pricing and protects you against some effects of a changing market. If you're interested in this stuff then I'd recommend looking at www.motleyfool.co.uk for expert free advice and opinion.