Things to Invest in UK – Best Investments to Consider in the UK
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
- If you’re completely new to the financial markets, you might be under the impression that the only asset class that you have access to is stocks and shares. However, this couldn’t be further from the truth – as UK investors can now trade everything from ETFs, index funds, and commodities to bonds, currencies, and even Bitcoin.
In this guide, we explore the best things to invest in based on risk and potential rewards. We also discuss which UK brokers you should consider when investing money into your preferred market.
Table of Contents
#1 Broker to Invest in the UK – eToro
Best Things to Invest in UK – Overview
Our researchers spent countless hours analyzing a full host of financial assets and markets. Below, you will see an overview of the best things to invest in right now.
- Index Funds – Overall Best Thing to Invest in as a Beginner
- Stocks and Shares – Invest in Individual UK and International Companies
- Dividend Stocks – Invest in Stocks That Pay Dividends
- Bitcoin – Best Thing to Invest in for High Returns
- CopyPortfolios – Invest in Dozens of Pre-Made Portfolios
By scrolling down, you will find a full analysis of each of the above investments.
Best Things to Invest in Now – Choose a Broker
Once you have decided which things to invest in, you then need to find a suitable online broker. The best brokers in the UK for this purpose can be found below.
- eToro – Overall Best UK Broker to Make Investments
- Capital.com – Trade Thousands of Markets at 0% Commission
You will find comprehensive reviews of the above investment platforms further down.
How to Invest Today – A Quick Guide For 2021
Once you have chosen a broker and subsequently determined the best things to invest in – you will then need to go through the process of opening a brokerage account. You will also need to make a deposit and proceed to place an order for your chosen asset.
Here’s what you need to do at eToro – a leading UK broker that offers thousands of 0% commission markets.
- Step 1: Open an Account with eToro – Visit the eToro website and open an account. This takes a matter of minutes and simply requires some personal information from you.
- Step 2: Upload Your ID – eToro is an FCA broker, so it must ask you to upload some ID. Choose from a passport or driver’s license, alongside a recently issued utility bill, bank statement, or any other supported proof of address.
- Step 3: Deposit Funds – You can deposit from just $50 (about £35) at eToro with a debit/credit card or e-wallet. Bank transfers are supported too.
- Step 4: Search for Things to Invest in – Click on the ‘Discover’ button to view the many thousands of markets that eToro offers. Or, simply search for the asset that you wish to invest in.
- Step 5: Complete Invest – Once you click on the ‘Trade’ button next to your chosen market, an order box will appear. This requires you to enter the size of your investment into the ‘Amount’ box. Finally, click ‘Open Trade’ to complete the investment process!
The asset that you invested in will now be viable in your eToro portfolio. It will remain there until you decide to cash out – which you can do by supplying clicking on the ‘Sell’ button.
67% of retail investor accounts lose money when trading CFDs with this provider.
Best Things to Invest in UK – Full Analysis
By investing capital into the financial markets, you stand the chance to grow your wealth at a significantly faster pace than would otherwise be possible with a traditional savings account. But, you will also need to take on an element of risk – which will vary depending on the investments you make.
With this in mind, our researchers have compiled a list of the best things to invest in today – based on a wide spectrum of risks and potential financial rewards.
Index Funds – Overall Best Thing to Invest in as a Beginner
If you’re a newbie investor that simply wants to put some money into an asset – as opposed to having to perform lots of market research and be actively involved day-to-day, consider an index fund. In fact, we would argue that this is the overall best thing to invest in as a newbie – for several key reasons. Before we get to that, we should explain the basics of what an index fund actually is. In its most basic form, index funds are offered by large ETF providers like BlackRock, iShares, and Vanguard.
Your chosen provider will seek to track a specific marketplace. For example, let’s say that you invest in an index fund that tracks the FTSE 100. In doing so, you would indirectly be purchasing shares in all 100 companies that are listed on the FTSE 100 index. This is because the provider behind the index fund will personally invest in these companies at the correct weight. For example, at the time of writing, HSBC and BP carry an FTSE 100 weighting in the region of 4.4% and 3.4% respectively.
As a result, if you invested £4,000 into this index fund, you would effectively own shares in HSBC and BP at a proportion of £176 and £136. Now, one of the core benefits of investing in an index fund is that you will be diversifying your money across heaps of different assets. In fact, some index funds give you exposure to hundreds, if not thousands of different stocks. Another reason why we think that index funds represent one of the best things to invest in is that this asset class is 100% passive.
This is because index funds are regularly rebalanced to reflect the broader market. For example, FTSE 100 index funds are reweighted at least every three months. This will ensure that the fund is aligned with the current performance and market capitalization of each FTSE constituent. Furthermore, by investing in an index fund, you will usually be entitled to dividends. This is often distributed in one lump sum every three months straight into your brokerage account.
It is important to note that the FTSE 100 is just one option when it comes to investing in an index fund. In fact, in comparison to index funds that focus on the US markets, the FTSE 100 has outperformed in recent years. This is why it might be better to consider the Dow Jones or S&P 500. The latter is the world’s most liquid index fund – with the S&P home to 500 of the largest US-based companies. This covers everything from Amazon, Facebook, and Tesla to Apple, Microsoft, and Disney.
If you’re wondering about how to invest in funds today – you can do so at eToro. This FCA-regulated brokerage site offers over 250 funds – all of which can be invested in at 0% commission. Irrespective of how much the fund is trading at, you can invest from just $50. Plus, as all supported funds are listed on major stock exchanges, you can cash out your investment at any given time – as long as the respective market is open.
Index Funds – The Benefits
- 100% passive investment
- Hundreds of index funds to choose from – both in the UK and abroad
- Invest in a huge basket of stocks via a single trade
- No prior investment experience required
- Great way to diversify
- Cash-out any time the markets are open
- Fees are typically very low
Index Funds – The Drawbacks
- Index funds only look to track a market – not outperform it
- You don’t have a say in which stocks are bought and sold
67% of retail investor accounts lose money when trading CFDs with this provider.
Stocks and Shares – Invest in Individual UK and International Companies
To reiterate – if you’re a complete novice in the financial markets, then we would argue that index funds are one of the best things to invest in. With that said, many investors in the UK prefer to build a portfolio of stocks and shares on a DIY basis. This means performing market research and adding investing in individual companies. In this sense, you literally have thousands of options at your disposal – both in the UK and overseas. For example, an FCA-regulated broker gives you direct access to over 2,500+ from 17 markets.
This includes companies listed on the London Stock Exchange, as well as markets in the US, Europe, Hong Kong, and more. The most challenging part of the process is knowing which stocks to invest in. The best way to approach this conundrum is to build a diversified portfolio across many stock types, industries, and economies. A good starting point is to add some solid, blue-chip stocks that have a long-standing track record in their respective markets.
Some examples of leading blue-chip stocks in the UK include AstraZeneca, GlaxoSmithKline, and BP. Over in the US, you might consider the likes of Johnson & Johnson, IBM, Disney, and Microsoft. Either way, blue-chip stocks will offer your portfolio an element of stability and oftentimes – can be a great defense against times of economic uncertainty. At the other end of the spectrum, you have growth stocks. This will see you investing in up-and-coming companies with a somewhat unproven business model.
Some examples of popular growth stocks that have produced phenomenal returns in recent years include Square, Tesla, and Alibaba. If you prefer to invest in domestic growth stocks, these are usually listed on the UK’s secondary stock exchange – the AIM. Either way, be sure to consider the enhanced risks of adding growth stocks to your portfolio. This is because growth stocks are a lot more volatile than their blue-chip counterparts – so ensure you diversify well to reduce the risk.
In terms of the investment process itself, never before has it been so easy and cost-effective to build a basket of stocks and shares from the comforts of your home. This is because brokers like eToro now offer ‘fractional’ shares. If you’re new to this term, fractional shares allow you to purchase a small portion of a share – as opposed to needing to buy a full stock. For instance, instead of allocating over $3,000 into a full Amazon stock, at eToro, you can invest from just $50. Plus, all UK and international stocks at eToro can be purchased on a 0% commission basis.
Stocks and Shares – The Benefits
- Tens of thousands of shares to choose from
- Invest in UK and intentional shares with ease
- Buy fractional shares to reduce your exposure
- Build a diversified basket of shares across multiple sectors
- Earn dividends in addition to capital gains
Stocks and Shares – The Drawbacks
- Knowing which shares to buy can be challenging
- More volatile than investing in an index fund
67% of retail investor accounts lose money when trading CFDs with this provider.
Dividend Stocks – Invest in Stocks That Pay Dividends
If you’re looking for the best things to invest in for the purpose of income generation, it doesn’t get much better than dividend stocks. Put simply, this will see you create a portfolio of stocks that pay regular dividends. More specifically, your chosen stocks will not only offer an attractive dividend yield when compared to the wider markets, but have a long-standing track record of doing so. The process of knowing which dividend stocks to invest in is actually very straightforward.
In fact, you’ve got two options at your disposal. First, you might consider drawing up a list of Dividend ‘Aristocats’ or ‘Kings’. The former refers to companies that have paid dividends for at least 25 years. Even more impressively, each quarterly dividend has consecutively increased in size. Some examples of popular stocks that fall within the remit of a Dividend Aristocrat include Pepsi, McDonald’s, AT & T, ExxonMobile, and Chevron. When it comes to Dividend Kings, these stocks take things to the next level.
This is because the respective stock has increased the size of its quarterly dividend for no less than 50 consecutive years. Some of the best Dividend Kings to invest in include 3M, Coca-Cola, Johnson & Johnson, Procter & Gamble, and Dover. Although there is never any guarantee that your chosen Dividend Aristrocat or King will continue to increase the size of its payments, you do at the very least have decades’ worth of historical data to go by.
The other option you have when investing in dividend stocks is to opt for an ETF. This is a great option if you simply want to invest in a basket of leading dividend-paying companies without having to put any research in. A great example here is the iShares Core High Dividend ETF. iShares will personally invest in 75 top-rated companies – many of which fall under the umbrella of a Dividend Aristocrat or King. Plus, you invest in this particular ETF at eToro on a 0% commission basis and a minimum stake of just $50.
In terms of the drawbacks, dividend stocks do tend to be somewhat sluggish when it comes to share price growth. This is because these companies have already experienced the vast bulk of their growth – so future returns are expected to remain stable. But, this shouldn’t be an issue if you are looking for things to invest in that offer a more solid and predictable inflow of cash. And as such, dividend stocks are often considered to come with a lower level of risk.
Dividend Stocks – The Benefits
- Perfect for risk-averse investors
- Receive dividends every three months
- Dozens of companies have increased the size of their dividend for 25+ years
- Provide your portfolio with some much-needed stability
- Re-invest each dividend payment to grow your money faster
Dividend Stocks – The Drawbacks
- Capital gains will be limited
- No guarantee that a stock’s dividend payment policy will continue
67% of retail investor accounts lose money when trading CFDs with this provider.
Bitcoin – Best Thing to Invest in for High Returns
Cryptocurrencies have taken the world by storm in recent years – with thousands of digital assets now available to trade online. At the forefront of this is Bitcoin – the world’s largest cryptocurrency in terms of market capitalization. This particular investment isn’t for those that have little to no appetite for risk – as Bitcoin is still considered highly speculative. This is evident in the levels of volatility that this digital currency still experiences. On the other hand, Bitcoin is the best performing asset class of the past decade.
For example, launched in 2009, Bitcoin was trading at well below a dollar for several years. Fast forward to 2021 and Bitcoin has since surpassed a value of $66,000. In simple terms, this means had you invested just a few pounds back in 2009, you would now all but certainly, be a millionaire. In terms of how to access this asset class, there are hundreds of cryptocurrency exchanges circulating in the online arena. The key issue is that most of these exchanges are unregulated.
As such, it is much safer to invest in Bitcoin via an online broker that is regulated by the FCA. eToro is one such example, which not only lists Bitcoin but dozens of alternative digital currencies. This includes plenty of top-10 projects in terms of market capitalization, such as Ethereum, Ripple (XRP), Dogecoin, and Cardano. Best of all, you are not required to purchase a full Bitcoin token – which as noted, would cost you tens of thousands of pounds.
On the contrary, you can invest in Bitcoin via eToro from just $50. This not only allows you to keep your stakes to a minimum, but you can easily diversify across other supported cryptocurrencies. If you’re completely new to Bitcoin and don’t quite understand how an investment would actually work, the fundamentals are no different from stocks and shares. This is because the price of Bitcoin is determined by market forces. In other words, its price will go up and down based on demand and supply.
As such, to assess how much money you are making or losing, you simply need to multiply your investment against Bitcoin’s rise or fall in percentage terms. For example, if you elect to invest £1,000 into Bitcoin and the digital currency increases by 40%, that’s a profit of £400. The good news is that you can cash out your Bitcoin investment 24 hours per day – 7 days per week. If using eToro for this purpose, it’s simply a case of logging into your account and creating an instant sell order from within your portfolio.
Bitcoin – The Benefits
- Gains of over 1 million percent since Bitcoin was launched in 2009
- You can buy a small fraction of one Bitcoin
- Several FCA-regulated Bitcoin brokers now operating online
- Best performing asset class in the last 10 years
- Cash out at any time
Bitcoin – The Drawbacks
- Highly speculative
- Volatility levels are huge
- Very high risk
67% of retail investor accounts lose money when trading CFDs with this provider.
CopyPortfolios – Invest in Dozens of Pre-Made Portfolios
If you’re the type of individual that wishes to invest in hand-picked portfolios that track a specific objective, the eToro platform is well worth checking out. In a nutshell, eToro offers an innovative investment product called CopyPortfolios, of which there are dozens to choose from. Each CopyPortoflio will contain a selection of assets that have been selected by the eToro team. This means that you can invest in a wide range of financial instruments without needing to do any of the legwork.
To give you an idea of what’s on offer, one of the most popular CopyPortfolios around at the moment is called ‘FuturePayments’ As the name suggests, this focuses on leading technologies that could play a major role in how we transact in coming years. The portfolio is split between stocks and crypto – at a weighting of 72% and 27% respectively. In terms of former, this includes Paypal, Apple, Amazon, and Square. The latter includes cryptocurrencies that are focused exclusively on digital payments – such as Dash and Bitcoin.
With so many CopyPortfolios to choose from, it’s well worth having a browse on the eToro website. For instance, you can also invest in CopyPortfolios that focus on renewable energy, electric cars, oil and natural gas, cyber security, fashion brands, commodities, and more. Irrespective of which marketplace you decide to target, your CopyPotfolio is 100% managed by eToro. In turn, this means that the in-house traders at eToro will regularly rebalance your portfolio.
This might mean readjusting the weighting system for each individual asset or adding/removing certain investments. It is also notable that eToro does not charge any additional fees for using its CopyPortfolio service. On the other hand, you will need to meet a minimum investment of at least $1,000 – or about £740. Finally, we should note that there are no minimum redemptions terms attached to CopyPortfolios. This means that at any given time – you can elect to sell your investment back to cash.
CopyPortfolios – The Benefits
- More than 60+ strategies to choose from
- Create a diversified basket of investments in one click
- 100% managed by eToro
- No additional fees
- No minimum redemtpion period
CopyPortfolios – The Drawbacks
- Minimum investment starts at $1,000
67% of retail investor accounts lose money when trading CFDs with this provider.
Best Things to Invest in – Full Broker Reviews
Once you have drawn up a shortlist of the best things to invest in – it’s then time to find a suitable broker. There are several core metrics that you need to consider when searching for a broker – including:
- Supported assets and markets
- Fees and commissions charged
- Minimum investment amount
- Regulatory standing and whether the platform is covered by the FSCS
- Customer service
- Accepted payment methods
With dozens of brokers active in the UK investment scene, choosing the right provider can be time-consuming. As such, below you will find a selection of pre-vetted platforms that tick all of the right boxes.
1. eToro – Overall Best UK Broker to Make Investments
eToro was launched in 2007 and nows boasts over 20 million users on its books. The eToro platform likes to keep things simple – with an easy-to-navigate investment process alongside small account minimums. At eToro, you will have access to thousands of financial markets – not only in terms of UK-listed assets but 16 international exchanges. This covers more than 2,500+ stocks from a wide variety of sectors. Best of all, eToro allows you to buy fractional shares.
As we mentioned earlier, this allows you to purchase a small fraction of one stock – which is particularly attractive if you wish to invest in US-listed companies. All supported stocks at eToro – in addition to over 250+ ETFs, can be purchased on a 0% commission basis. Stamp duty tax is waivered too – so that’s a further saving of 0.5%. eToro is also popular with those looking to invest in cryptocurrency in a safe manner. This top-rated platform offers over 30+ digital currencies – and the minimum investment required is just $25 – or about £17.
Additional markets at eToro include forex, hard metals, energies, indices, index funds, and more. eToro also offers CopyPortfolios – which we discussed just a moment ago. This is in addition to its Copy Trading service, which allows you to invest in a seasoned eToro trader. Getting started at eToro takes minutes, and you can deposit funds with a UK debit/credit card, e-wallet, or bank account transfer. The minimum deposit required as a new client is just $50 – which is great if this is your first time investing online.
Pros
- Invest in stocks at 0% commission and ZERO stamp duty
- Minimum investment per stock investment is $50
- Supports debit/credit cards, e-wallets, and bank transfers
- Regulated by the FCA and covered by the FSCS
- Used by over 20 million people
- Perfect for beginners
- Social and copy trading tools
Cons
- Perhaps too basic for technical traders
- No support for MT4 or MT5
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Capital.com – Low-Cost Broker With 4,000+ Commission-Free Markets
Another top-rated brokerage site that you might want to consider is Capital.com. You won’t be short of options when thinking about the best things to invest in, as Capital.com is home to over 4,000 markets. With that said, Capital.com specializes in a financial product called contracts=-for-differences, or simply CFDs. For those unaware, CFDs allow you to trade assets without actually owning anything. This is because the CFD is a financial mechanism tasked with tracking asset prices.
For example, if BP shares are priced at 348p on the London Stock Exchange, so will the respective CFD instrument. By trading in this way, you will be able to apply leverage to your positions. This means amplifying the size of your trade by a certain factor. This is in line with UK regulations. As such, the maximum amount of leverage available for UK retail clients is 1:30 when trading major currencies, 1:20 on gold and leading indices, and less on other assets.
Additionally, Capital.com allows you to enter a trade with either a buy or sell order. In other words, you can place a buy order if you think the price of the asset will rise. Or, a sell order if you think the opposite. Regardless of which asset you are trading at Capital.com and the respective exchange that it is listed on, you won’t be charged any commissions. Instead, it’s simply the spread that you need to cover, which in most instances, is very competitive.
Furthermore, we like the fact that Capital.com allows you to test out your trading strategies via a free demo account. This is a risk-free way of getting used to CFDs, leverage, and the Capital.com platform itself. When you are ready to start trading with real capital, a deposit of £20 or more is needed when using a debit/credit card or e-wallet. Bank transfers require no less than £250. In terms of regulation, Capital.com is licensed by the FCA, as well as ASIC, CySEC, and NBRB.
Pros
- Top-rated spread betting and CFD broker
- Licensed by the FCA, ASIC, CySEC, and NBRB
- £20 minimum deposit (debit/credit cards and e-wallets)
- 0% commission on all markets
- Tight spreads and no fee on deposits or withdrawals
- Supports thousands of financial markets
- Convenient for newbies
Cons
- Experienced traders might consider the broker too basic
- £250 minimum deposit on bank transfers
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.77% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.
Best Things to Invest in Right Now – Detailed Walkthrough
This guide has not only discussed the best things to invest in right now – but which brokers should be considered for the job. If you’re ready to start making some low-cost and diversified investments today, this section of our guide will walk you through the process every step of the way.
Step 1: Open a Broker Account
For this tutorial, we will show you how to invest through eToro – which came out as our number one broker pick. To recap. the platform is FCA regulated and FSCS covered, and all stock and ETF investments are free of commission and stamp duty tax.
So, the get the ball rolling, visit the eToro website and open an account. This will require you to tell eToro who you are by providing some personal information and contact details.
Next, upload a copy of your ID to complete the KYC (Know Your Customer) process. You can, however, do this later if your initial deposit will not exceed $2,250 – or about £1,600.
67% of retail investor accounts lose money when trading CFDs with this provider.
Step 2: Deposit Investment Funds
In order to invest, you need to deposit some money into your eToro account. Unlike age-old brokers – which only support traditional bank transfers, eToro accepts a full range of convenient and instantly-processed payment methods.
This includes debit and credit cards, as well as e-wallets like Paypal. The minimum first-time deposit at eToro is just $50.
Step 3: Search for Investments
If you already know which investments you wish to make, use the search box at the top of the page. For instance, in our example below, we are looking to invest in the FTSE 100 index via an iShares ETF.
You can also click on the ‘Discover’ button to browse the many assets and markets available on the eToro platform. Either way, once you have chosen an investment, click on the ‘Trade’ button displayed next to the respective asset.
Step 4: Make Investment
The final part of the process is to create an order. The only thing that needs to be done in this respect is to specify your chosen investment amount. For this, simply enter your stake into the ‘Amount’ box.
And finally – once you click on the ‘Open Trade’ button, eToro will execute your investment immediately.
Things to Invest in Right Now UK – Conclusion
The online investment arena is now home to thousands of markets. On the one hand, this is great for risk-mitigation purposes, as you can create a highly diverse portfolio of assets. This does, however, also make it challenging to know which investments to pick. This is why when searching for things to invest in – you might be best focusing on index funds.
After all, this will allow you to indirectly invest in hundreds, if not thousands of stocks via a single trade. Irrespective of which assets you decide to purchase, eToro is the best FCA-regulated broker in the UK to facilitate this for you. Not only can you invest in thousands of assets at 0% commission, but stamp duty tax is waived on UK-listed markets.
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