How to invest in a stocks and shares Isa: The quick and easy guide

Deciding to invest is a matter of personal choice.

Some swear by it and point to decades of data showing stock market investment is the best way to make long-term inflation-beating gains; others are dead against and argue they will not gamble their money, pointing to three hefty stock market crashes since 2000 for evidence.

And for many there is a middle ground, where they stick a chunk of their wealth in an FSCS-protected but inflation-imperilled cash savings account and invest the rest.

Each to their own, I say, but once someone has decided to start investing some of their money in the tax-beating shelter of an Isa, what’s the quickest and simplest way to do it?

It’s possible to invest around the world to growth your wealth at a low cost and from the comfort of your own home, our guide explains how

There’s a vicious circle problem in writing any guide to this. You need to keep it short to hold people’s attention, but often each element you explain then mentions something else that requires further explanation.

As I’ve already wasted 154 words in that preamble, I’ve set myself the challenge of explaining the basics someone needs to know to invest in an Isa in less than 700 words from here on – and then adding some simple fund options.

You shouldn’t risk either your rainy day fund or money you need in the short-term. Keep that safely in readily accessible cash savings.

But you also don’t need to be rich to invest, you can start investing with a small lump sum or £25 per month.

You can pay a professional to do it for you but for most people the cost of a financial will feel prohibitive for their simple investing needs.

That leaves two main options: use an automated service or do it yourself.

The former involves an online wealth manager, or robo-adviser, as they are often called. These offer tools to establish your goals and risk levels and will build a portfolio they manage for you.

You pay a bit for this, but in return you get easy hands-off investing with some expert help.

If you want to pick investments yourself – perhaps with some guidance – then you need a DIY investing platform.

These let you buy shares, funds and investment trusts, and our DIY investing platform round-up will help you understand their charges and which is best for you.

Once you’ve got past the ‘how’ hurdle, the next step is what investments to choose.

Even if you forgo individual share-picking and opt for funds or investment trusts that pool investors’ money invested into a range of companies, there is a baffling array to choose from.

In my years writing about investing, I have learnt most people are not concerned with finding the absolute best investment, but are worried about picking a bad one. And I think this is why many fall down at this point.

Don’t stop here though, it doesn’t have to be difficult.

The key is to think as broad and simple as possible – and understand a bit about asset allocation. This sounds complicated but is simply about not putting all your eggs in one basket.

At the simplest level, there are two main investment assets: shares and bonds – both of which can be bought in nicely-diversified funds and trusts.

Shares are judged to be riskier but offer greater rewards, while bonds are safer but offer less opportunity for gains.

Shares involve buying a stake in a company, which can go up or down in value, while bonds involve lending a government or company money for an interest rate return and all your money back.

The safest bonds are considered to be top grade government bonds in your home currency. Fortunately for British investors the UK’s government bonds, known as gilts, make the cut here.

The traditional way of taking less risk has been to hold a greater proportion of bonds: so an adventurous portfolio might be 100 per cent shares, a middle of the road one would be 60 per cent shares and 40 per cent bonds, and a low risk one 20 per cent shares and 80 per cent bonds.

The problem at the moment is that bonds pay very little interest and are historically expensive to buy, due to super-low interest rates and central banks buying them en-masse – first to combat the financial crisis and then Covid-19 lockdowns.

If you want to keep things really simple, you could replace bonds with cash in a savings account.

Keep this separate to your rainy day pot and think of it as part of your investing portfolio, with a proportion of cash related to how much risk you want to take.

There is a choice to make over active funds, where a manager tries to cherry-pick the best investments and beat the market, or often-cheaper passive funds that just follow a stock market index.

If you want to go active, then choose a fund or investment trust that is not too expensive and has a manager who you think will add value but not too much risk.

If you choose a passive tracker fund, then aim to keep costs low.

Whichever route you take, the simplest thing to start with is a global fund or trust that can form the core of your portfolio. Then, as you gain confidence, you could add smaller satellite investments in other areas if you wish.

That’s the whistlestop tour. Below are some simple fund ideas to get started here.

How to invest around the world 

A global fund invested in shares around the world makes a good core element for your portfolio, balanced with either cash, or a simple government bond fund, depending on how much risk you wish to take.

A tracker or index fund will follow a set global index, which will be made up of different countries’ stock markets and some of the companies that they are comprised of – usually by size and holding more of the largest firms in them.

An active fund’s manager will pick what they think are the best companies, which could increase your returns but also delivers the chance they could get it wrong and fall behind the market.

Here are some ideas to consider, based on our research into funds that are low cost, have good track records and make broad based investments. Make sure you do your own research before investing and if in doubt seek professional advice.

Passive funds

Fidelity Index World Fund P

This follows the share prices of a basket of companies that make up the MSCI World Index of developed markets.

Ongoing charges: 0.12%

HSBC FTSE All World Index Fund C

This follows a global index of shares that also includes an emerging markets element.

Ongoing charges: 0.13%


This follows an index made up of both developed and emerging markets company shares. It’s an ETF, so is listed on the stock market.

Ongoing charges: 0.2%

Vanguard LifeStrategy

This hugely popular range of low cost funds invests in shares and bonds around the world in different percentages, you can choose the one that suits you.

Ongoing charges: 0.22%

Active funds

Lindsell Train Global Equity

This fund buys and holds what the well-respected managers Michael Lindsell and Nick Train see as the world’s best companies’ shares.

Ongoing charges: 0.65%

Fundsmith Equity

Terry Smith’s fund invests in shares of the world’s companies that he perceives as having an enduring advantage.

Ongoing charges: 0.97%

Baillie Gifford Managed Fund

Baillie Gifford’s Managed Fund invests around the world, predominantly in shares, with some bonds and cash. It holds about 75% in shares, split between four separate expert regional teams give the autonomy to back what they think are the best growth businesses over at least the next five years.

Ongoing charges: 0.42%


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