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With December already upon us, many people may be thinking about spending money rather than investing it. Even some people who might want to start investing in shares could decide that that may be a resolution for the new year rather than something to do in December.
But it can be easy to keep procrastinating when it comes to investing – perhaps forever. In reality, getting started in the stock market does not necessarily take a lot of money.
So, even with a few hundred pounds, someone who has no stock market experience could start investing before the end of 2025.
Getting ready to be an investor
A first move is to prepare.
Although someone may lack stock market experience, that does not mean they ought to start buying shares knowing nothing about the market.
In fact, I think it is important to do some research and get to grips with key concepts like how to value shares before putting a single penny into the market.
It also makes sense to figure out a basic strategy. Each investor has their own goals and risk tolerance. Thinking about that can help someone decide what to do as they start buying shares.
Another preparatory step is having a way to buy shares. With a few hundred pounds to invest, minimum fees and commissions could potentially take quite a big bite out of the money being invested.
So a new investor ought to take time and compare available share-dealing accounts, Stocks and Shares ISAs, and trading apps.
Applying the right principles from day one
Even with just a few hundred pounds to invest I think it makes sense to start buying shares as one means to continue.
For example, a simple but important risk management strategy is diversification. It is possible to diversify even with just a few hundred pounds.
Instead of buying shares simply in the hope their price will go up (for example, because the price recently fell dramatically), I think it is helpful to adopt a long-term approach to investing.
That involves asking whether a share represents good value given the future prospects of the business.
One share to consider
As an example, one share I think investors ought to consider is JD Sports (LSE: JD).
The share has been performing poorly lately, as it happens. Over the past year, the share price has fallen by a quarter.
But the price fall alone is not what I like about the share. I like the fact that its current price, in pennies, seems cheap to me for a business like JD Sports.
Demand for sportswear and footwear is high and likely to stay that way. Through organic growth and acquisitions, the company has built a strong position around the globe.
Its thousands of shops and digital operations have helped it build a strong brand and large customer base. The business model is proven and JD Sports is solidly profitable.
A weak economy could mean people think twice about splashing out on costly trainers, perhaps hurting revenues and profits. But as a long-term investor, I continue to see lots to like in the investment case.
